Accounting information system
An accounting information system (AIS) is a system that first collects and stores data and then processes it into information used by decision makers (investors, creditors, and managers). This information generated from an AIS can ultimately help decision makers manage organizations more efficiently and strategically. Though an accounting information system can simply be a paper-and-pencil-based manual accounting system, today, the term AIS is most commonly referred to as a complex computer-based system combining the resources and capability of information technology with traditional accounting methods and controls.
Accounting information systems are composed of six main components:
1. People: users who operate on the systems
2. Procedures and instructions: processes involved in collecting, managing and storing the data
3. Data: data that is related to the organization and its business processes
4. Software: application that processes the data
5. Information technology infrastructure: the actual physical devices and systems that allows the AIS to operate and perform its functions
6. Internal controls and security measures: what is implemented to safeguard the data
Initially, accounting information systems were predominantly developed “in-house” as legacy systems. Such solutions were difficult to develop and expensive to maintain. Today, accounting information systems are more commonly sold as prebuilt software packages from vendors such as Microsoft, Sage Group, SAP and Oracle where it is configured and customized to match the organization’s business processes. As the need for connectivity and consolidation between other business systems increased, accounting information systems were merged with larger, more centralized systems known as enterprise resource planning (ERP). Before, with separate applications to manage different business functions,... [continues]
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