Impact of Information Technology

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Impactof Information Technology


Impactof Information Technology

Ordinarily,businesses purchase various goods and services to facilitate theirday to day operations (Goldstein, 2015). In this regard, expenditurecycle plays a critical role from the period when the goods arepurchased until the final payment is made. Therefore, the essay seeksto demonstrate how Information technology can be used to changeexpenditure cycle activities. Also, the paper will discuss how thenew procedure changes the threats as well as the appropriate controlmethods for mitigating those risks.

a.Explains how IT can be used to change expenditure cycleactivities.

Firstly,the main of objective of an expenditure cycle is to maintain the flowof information throughout the inventory process. For that reason,use of IT can change expenditure cycle activities by minimizing riskssuch as security breaches and errors associated with the manualsystem. On top of that, information technology facilitates innovationand improves the rate at which daily transactions and reports areproduced (Goldstein, 2015).

Similarly,it enables business activities to be analyzed more efficiently.Moreover, use of IT is helpful in evaluating business needs as wellas providing the most accurate results on the goods that should bepurchased. Information technology is also used to monitor themovement of ordered items, supplied materials as well the storage ofthose products. In addition, IT helps the suppliers to improve theiroutbound logistics. In this case, the shipping process is enhancedthus improving business operations. Moreover, information technologyis crucial in determining the validity of recorded transactions thusminimizing issues of theft (Goldstein, 2015).

b.Control implications.

Thenew system ensures that any sensitive information is safeguarded.Here, information technology must make use of proper encryptiontechniques for all transactions. It will also back up all files in asecure way to prevent unauthorized individuals from accessing them(Goldstein, 2015).

Lossof inventory due to stealing. Information technology facilitates theinstallation of CCTV surveillance system and alarms to curb theft. It will also ensure that documentation is properly done when movinggoods from one place to another.

Theoccurrence of errors associated with the received good count. Use ofIT will help in the counting of inventory items in the database thuskeeping track on the purchased products.

Receivingunordered items. The system will play a crucial role in acceptingonly those items or goods that have been approved.

ElectronicData Interchange-related threat. Information technology ensures thatunauthorized users do not access electronic data interchange. It willalso be used in the processes of identifying and verifying EDItransactions (Goldstein, 2015).

Buyingitems from unauthorized personnel.Thesystem is beneficial in analyzing and reviewing all purchase orders.Additionally, it validates the lists of suppliers that have not beenapproved to provide their goods or services.

Purchaseof goods having the inflated prices. Information technology will beused to review all purchase records. On top of that, it will alsoperform other activities such as analyzing and identifying items withexaggerated prices.

Outof stock or excess inventory. The system will provide a moresophisticated mechanism to control the stock and keep all changes inthe inventory (Goldstein, 2015).


Asit has been established, IT plays a critical role in improvingexpenditure cycle activities. The report demonstrated how the use ofinformation technology minimizes security breaches and errors. Italso enhances the processing of various transactions and productionof reports. Additionally, IT controls the movement of orderedproducts, their supply, and storage. The essay also discussed how thesystem solves various threats such as out of stock or excessinventory, purchasing items from unauthorized personnel, and loss ofstocks as well as disclosure of confidential information.


GoldsteinMurray (2015). HowTechnology Drives Business. RetrievedMarch, 25, 2017, from: