Q.State the limitations of a Computerised Accounting System.

Computerisation is not without drawbacks, and a balanced answer should acknowledge them honestly.

A Computerised Accounting System, despite its advantages, has real limitations that a business must plan for.

1. Cost. Hardware, software licences and staff training all require an upfront investment that a very small business may find hard to justify.
2. Dependence on power and technical skill. The system cannot function during a power failure or hardware breakdown, and staff need at least basic computer literacy to operate it correctly.
3. Risk of data loss or corruption. A virus, a hardware failure or a software crash can damage or destroy data if regular backups are not taken.
4. Risk of fraud or unauthorised access. Weak passwords or poorly defined access rights can allow data to be altered or deleted without an audit trail to trace it.
5. Resistance to change. Staff accustomed to manual methods may resist adopting a new system, at least in the initial period.
6. Need for periodic updates. Tax rules and reporting formats change from time to time, and the software must be kept updated to remain compliant. …

Students sometimes state expense as the only limitation — a complete answer needs to cover the technical, security …