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Directions in optical storage.

Many benefits will accrue from the advances being made in mass storage technology, particularly in the optical arena. The high capacity and low cost per unit of data stored make optical media an effective storage solution. Accountants need to be aware of the implications of this technolog on the accounting profession as well as on the delivery of services.

Ever-increasing volumes of data must be stored and retrieved. Once measured by the number of punched cards in a file, today's data are sometimes measured in trillions of bytes. Rapid storage, retrieval and access to large volumes of information have become central concerns to management, users and information systems managers in all sizes of firms.


Data storage media have evolved from punched cards, punched paper tapes, magnetic drums, magnetic tapes and disks to today's technology--optical storage. Adoption of this technology is expected to increase dramatically as standards are resolved, new applications are developed and the price/performance ratio of the media continues to improve.

An optical disk provides greater storage capacities than do magnetic tapes or disks. Optical disks are available in 5 1/4-, 12-, and 14-inch formats. Storage capacities range from 115 million bytes or megabytes (megs) to over 700 megs of digital data per side. Optical disks such as write once, read many (WORM) drives and erasable optical disks are portable and could somebday displace magnetic tape due to their greater storage capacities, smaller space requirements, removability, transportability and longer guaranteed media life.

Examples of some of the more commonly used optical technologies follow.

* CD-ROM (compact disk--read only memory). CD-ROM is the medium of the publishing industry for the recording of reference data on disks. Data once written to disk by the publisher cannot be erased or overwritten but can be read many times. CD-ROMs currently have a storage capacity of up to 650 megs. Their read-only characteristic provides security for publishers of distributed information. CD-ROMs often are used in the distribution of reference data that changes infrequently. Growing numbers of catalogs, specialized databases, digitized data and software programs are being delivered on CD-ROM as personal computer users realize the advantages of having megs of data that can be accessed randomly and loaded into the computer within seconds. According to Dataquest Inc. (San Jose, California), more than 1,300,000 CD-ROMs will be delivered during 1991.

* WORM disks. WORM drives offer more flexibility than the CD-ROM devices because users are capable of writing data while online to the computer. In addition to keyboard input, information from video scanners, optical character recognition equipment and other devices also can be recorded on disk.

Data on WORM disks cannot be erased, making them ideal for a variety of applications requiring audit trails, such as in CAD/CAM (computer-aided design--computer-aided manufacturing), program development and financial and business applications.

WORM disks have the potential for replacing other methods of mass storage such as microfiche, microfilm and tape. WORM technology takes an image of documents and allows for random access retrieval of data. WORM drives are gaining popularity among data-intensive applications such as graphics and imaging systems. For these applications storage capacity, permanence of data and media removability are important considerations.

* Erasable optical disks. Some view this relative newcomer in optical storage as the ultimate in mass storage technology since erasable optical disks combine the storage capacities of optical technology with the reusability of magnetic storage. High-volume data users increasingly will find erasable optical disks an acceptable alternative to large magnetic storage devices. The advantages of erasable optical technology are clear: The media are rewritable and removable, and provide for the storage of large volumes of data.

At this early stage, some drawbacks are obvious:

1. The drives and media are roughly twice the cost of WORM drives and media.

2. The technology is just becoming available.

3. The technology has not yet been widely proven in actual applications.



Some accounting applications using optical disk technology include the following:

* Analytical review. CD-ROM technology, when combined with the power of PCs, will provide the practitioner access to many published databases from a desktop PC. Some currently available databases allow the user to access investor information services and information on corporate, private, banking and international businesses.

* Tax research. Several vendors have CD-ROMs that include source materials such as the Internal Revenue Service Codes and regulations, the Tax Reform Act of 1986, tax court cases and revenue rulings and procedures. Updates generally are issued on additional disks and/or links to the vendor's on-line CD-ROM update section.

* Reference database. CPAs often require information found in reference libraries. Reference databases are now distributed routinely on optical disk.

* Document image storage and retrieval. Depending on the auditor's application, optical disk storage may offer certain advantages over microfilm or microfiche. The cost of microfilm media is currently only one-half to one-quarter the cost of optical disk media.

With this technology, documents can be digitized, indexed and stored on disk. Further references to the stored information are made using a high-resolution display screen. Paper copies can be generated on a laser printer.

Note: Optical technology is being accepted in some legal circles as original information, in the same way microfiche and paper are considered original documents. For this reason, WORM disk technology is becoming more widely accepted for audit, archive and imaging applications.

Organizations best suited for imaging applications requiring long-term storage and retrieval are those that need to maintain file cabinets of frequently or infrequently accessed printed matter, such as government organizations, insurance companies, banks, credit card companies, hospitals and large manufacturing companies. For them, WORM technology can result in large savings as thousands of square feet of floor space can be returned to productive use.

* Archiving records. With its data permanence, low cost per unit of stored data and extremely efficient space requirements, WORM storage is a cost-effective replacement for manual filing systems. Appropriate candidates for this technology include the previously mentioned organizations as well as legal, accounting and tax preparation firms.

* In-house applications. An optical disk attached to a local area network can provide an ideal medium to store a CPA firm's policies, procedures and practice aids for reference by network users. Several large firms have already placed their manuals on CD-ROM or WORM disks.



The use of optical technology raises a number of issues that must be considered by the accountant.

* Effect on internal control. Optical technology promises billions and even trillions of bytes of on-line storage. Coupled with the use of networking systems, this technology places a lot of computing power in the hands of the user. Years of data are available in a portable form. The effectiveness of the internal controls of systems employing optical devices must be carefully evaluated.

* Security. The advantages of optical technology in providing portable and removable storage capabilities have a downside in the area of security. Organizations using this technology must develop protective methods that address data accessibility, its strategic importance and the cost of protection.

* Media standardization. The optical industry has been mired in controversy concerning standards over data format, sizes of disk and accompanying retrieval software. Most of these standards are still in the process of being confirmed.
COPYRIGHT 1990 American Institute of CPA's
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Copyright 1990, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Spitzer, Suzanne M.
Publication:Journal of Accountancy
Date:Sep 1, 1990
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