Accounting Information System

Accounting Information System

Overview of the Accounting Information Systems

Accounting Information System or AIS is a collective resource that is made out of a collection of processed financial and accounting data. This processed data is then come into use for making prompt decisions. It is in general a perfectly computerized methodology to track an y accounting action or transaction in the context of maintaining information technology resources. The end product is the statistical report that businesses can use internally to ensure accountability. Therefore, all the issues related to Accounting Information System will be discussed in detail.

Background of Accounting Information Systems

AIS tend to combine conventional practices of accounting like in the form of GAAP (Generally Accepted Accounting Principle) with modern and advanced technological implications of resources. In olden days, companies used to develop in-house accounting system and considered is a legitimate system. It appeared to be expensive and difficult. The computer programs giants stepped in and developed software to facilitate the accounting activities. Software making has helped businesses to maintain their transparency and accountability in order to communicate with the outside and inside world including every stakeholder. Today, most of the companies are using ERP (Enterprise Resource Planning) which is a kind of accounting system. It tends to store and update the information regarding many heads including accounting. As for accounting information system, there are six elements that constitute it thoroughly. The first element is people as they are the ones to use AIS and make wise decisions. The second element is procedures and their instruction. This tends to establish the needed methodologies to retrieve and process the acquired data. This is one of the crucial elements as the right method is important to further interpret the data. The third element is data which is in raw form. The organizations have to separate the data relevant to them or they just need to implement some filter to hold onto the most needed data. Fourth element is software and that companies have to decide to incorporate which kind of software to maintain their integrity as well as their privacy. There are so many software's prevailing in the market today that suits the major requirements for the companies. The fifth element is information technology structure that is comprised of hardware to operate the recommended system. The sixth and the last element is internal control that opts for security measures to help guard the sensitive and top priority information about the organizations (Bromwich, 1990).

Benefits of Accounting Information System

There are several advantages of the AIS adaptation as it facilitates the process of reporting and compiling financial reports. This eventually helps in arriving at appropriate decisions imperative for the success of the business. Consolidation is considered to be one of the hallmarks of generating reports since people or the users do not possess to see through the system and interpret the implications of massive number of transactions at the same time. On the other hand, it is also a fact that whenever the companies ...