Open Source Essentials

September 1, 2016

One of the main roles of management accountants is to provide insights and information to facilitate important economic decisions for their companies. To deliver on these expectations, they must understand the difference between open source accounting applications and proprietary closed source systems.

Software such as accounting applications and server operating systems can be categorized by technology, ownership, licensing, and usage, among other characteristics. Source code is the underlying programming language for developing a functional operating system or software.

Most source code is covered by copyright, which, along with contract law, patents, and trade secrets, provides the legal basis for its owner to establish exclusive rights. The source code can be available for either an open source or a proprietary closed source system.

An open source system is an environment where the source code is available to the general public for use and/or modification from its original design. Open source code is typically created as a collaborative effort in which programmers improve upon the code and share the changes with the community.

The general rationale for this open source movement is that freeing programmers from concerns over proprietary ownership or financial gain will result in a more useful, bug-free product for everyone to use license-free. The concept also relies on peer review to find and eliminate bugs in the program source code.

There’s a fair amount of confusion over the term “open source.” To be considered a true open source initiative, the code must gain a certification standard issued by the Open Source Initiative (OSI).

This certification affirms that the source code of a computer program is made available to the public and is generally available for free. In order to be considered OSI certified, a product must meet the following criteria:


  • The programmers or holder of the license of the source code can’t collect royalties on the distribution of the program.


  • The distributed program must make the source code accessible to the user.


  • The author must allow modifications and derivations of the work under the program’s original name.


  • No person, group, or field of endeavor can be denied access to the program.


  • The rights attached to the program must not depend on the program’s being part of a particular software distribution.


  • The licensed software can’t place restrictions on other software that’s distributed with it.


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