Question

There are some regulations that can play a factor in REA models. What are some ways the laws impact how companies handle this type of modeling?

Answer 1

REA can be considered as an upgradation in the accounting field to cope up with the computer age. It is a form of accounting where the ideas ofresources, events amd agents are incorporated. This make the process of accounting more easy and precise. Although the REA models are very accurate there are certain regulations that make them difficult to handle. It does not follow the traditional double entry method only single entry is allowed this makes many companies to resist its use. The data can be viewed only through singel window, s a result any corrections to be made as per the customer requirement make take more time. In order to overcome these hurdles the companies incorporate the traditional as well as the REA technique. The viewing rights are given to multiple authorities so that the corrections can be done as per the customer requirement as soon as possible. The entry is also made double entry so that the working tradition is not altered. There are certain restrictions made on the accesibility of the data so that the revelant data is not misused. The data is stored in disaggregated manner so that only the authorised person can aggregate it and interpret the data.