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Journal of Information Systems, Vol. 13, No. 2, Fall 1999
pp. 105–116
The Impact of the Euro on Information Systems
Daniel E. O’Leary, University of Southern California
Accounting Information System Requirements Brought About by the Euro The
introduction of the euro will have a wide range of changes in
requirements for accounting information systems (e.g., Dekker [1997] and
others).
1. Legacy systems will require multiple updates. Unlike present day
relational database systems, many legacy systems redundantly store data
items (e.g., currency figures). In these systems, all instances of each
redundantly stored currency data item will need to be updated to the
same euro figure.
2. Systems must do triangulation. All those systems using processes
related to currency exchanges, will have to be updated to reflect
changes in the way conversion is done, using triangulation, rather than
traditional inversion conversion.
3. Multiple currencies. Since both euro and local currencies can be used
during the transition period, systems will need to allow recording and
display of both home currency and the euro for each transaction.
Inventories of both currencies will need to be kept as long as both are
used. The existence of multiple currencies potentially exposes a company
to the risk that payments are made in the wrong amounts of a currency.
For example, as in Table 3, a bill for 302,706 euros incorrectly might
be paid as 4,211,213 euros if clerks use the wrong currency amount.
4. Minor payment differences. Systems will need to be changed to
accommodate minor differences in payments. Since customers can pay their
bills in either euros or the home country currency, triangulation
rounding can create a situation where there are differences in the
equivalent between what is billed and what is paid when different
currencies are involved. Few systems have been built to accommodate
differences in payments and what is billed. Further, few systems
currently accommodate billing in one currency and payment in another
(Software Echo 1997). In addition, such differences will carry forward
to the general ledger, which will also have to accommodate minor
differences.
5. Restatement of financial reports. Firms must restate previous
financial statements in euros, which raises other questions including
the following: Who determines whether historical numbers will need to be
restated? How much of the historical data will be restated? Will firms
have the restated historical numbers attested to?
6. Inconsistent use of decimals. In some monetary systems, e.g., Belgium
and Italy, decimal places are not used. As a result, systems designed
for these currencies will need to be updated to accommodate the euro’s
decimal places.
7. Number of decimal places. Not only is the existence of decimal places
an issue, but also the number of decimal places is an issue. In order to
assure that rounding is done at the appropriate level, six decimal
places are required to accommodate the euro.
8. Input validation will need to accommodate multiple currencies. Input
validation will need to change to accommodate the existence of a new
currency and multiple currencies. Reconciliation tests will need to
allow for and accommodate differences due to rounding.
9. Internal documents. Typically, most of a firm’s documents, input, and
output will need to be changed to accommodate the multiple currencies.
10. Reporting capabilities. Reporting capabilities will need to be
examined closely. For example, reports are often based on currency
values exceeding some “threshold” amount. In some cases firms will need
to change the bases of those thresholds to accommodate the euro. In
addition, reports will often need to have the ability to display two or
three currencies simultaneously.
11. Currency fonts will need updating. Finally, currency fonts will need
to be updated to include the new symbol for the euro. Apparently,
Microsoft has announced that it will accommodate the euro symbol in its
32 bit applications, but not in legacy applications, such as Windows 3.1
(http://www.microsoft.com/windows/euro.asp). Similariti
full:
https://msbfile03.usc.edu/digitalmeasures/doleary/intellcont/Impact%20of%20Euro-1.pdf
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