ACCOUNTING AS AN INFORMATION SYSTEM

Importance of Accounting as an Information System

Importance of Accounting as an Information System

Introduction

The purpose of this study is to expand the boundaries of our knowledge by exploring some relevant and factual information relating to the analysis of accounting as information system. Accounting is a system adapted to classify economic events that occur in a business. Internal control is a function that aims to safeguard and preserve the assets of the company, prevent improper expenditure of funds and offer the assurance that no obligations shall be incurred without authorization. An information system is a set of interrelated elements that collects data, processes it and becomes information, which stores and later disclosed to users (Vandament, 1993, pp. 167-169).

The Accounting is an information system, as it captures, processes, stores and distributes vital information for sound decision-making in the company. The key role played by accounting to control and organize the various activities of the company in order to meet the situation where this is located, in a flexible, timely and useful to carry out the purposes you want to perform and thus meet the objectives. The challenge posed to the environment has forced managers to rely increasingly on the basis of objective information to perform a vital function i.e. making decisions. But what usually happens is that information flows from and within the company and is produced by a number of information centers spread across the organization. Lack of coordination between these information centers can cause unwarranted duplication of effort (Revsine, 1999, pp. 144-149).

Financial information is mostly the only source available for an outside analyst; hence the importance of having detailed information reflects economic reality of the company. The essential elements of financial information are: the account of income, balance sheet, the schedule and the cash flow or financing. Research says that financial accounting information is greatly helpful in managing a company. Proper analyzing and interpreting the financial information is the basis for good decision making. Financial information is essentially used by internal stakeholders for various purposes (Harrison, 2001, pp. 9-11).

In this paper, the author will discuss the importance of accounting as an information system.

Discussion

The focus of this business report will be based upon our own organization i.e. Bohoo. The company conducts majority of its business transactions online. Boohoo.com offers a wide range of trendy apparels to its customers. The company has a diversified product line ranged from clothes and shoes to fashionable jewellery products. The company's products are specifically targeted towards female, of all ages. Through the website, the customers can not only order the product but also can keep themselves up to date with the latest trends in the fashion industry.

The main focus of this research must be an analysis of the relevant models and concepts studies in this module in the context of chosen organization. Actual choice of what to research for business report will depend on the access to internal and external sources of information within chosen ...