Review of Applications of Accounting Information System of Petroleum

Topics: Decision making, Information systems, Accounting information system Pages: 8 (2598 words) Published: December 9, 2010
Review of Applications of Accounting Information System of Petroleum


Today the competitive world has thrown more challenges to the corporate world. More transparent and clear information to the corporate management and its customers also has been the trick of success in today’s market. A company can gain confidence and attract more customers if it is very transparent, clear substantial and subjective in its information it provides to its investors and managers. Keeping this in view Accounting Information System has been the talk of the corporate world. The petroleum producing countries are also forced to follow certain technologies in their accounting systems so as to get more information regarding distribution and sharing of profits among its investors. This article is a study on the importance and also applications of AIS in petroleum companies with special reference to Yemen.

Concept and definition of AIS
The definition of AIS has evolved over the years from one focusing on the provision of more formal, financially quantifiable information to assist in decision-making processes to one that embraces a much broader scope of information. The dimensions used to reflect the design of AIS include focus, orientation, time horizon, aggregation, integration, timeliness, financial and non-financial, and quantitative and qualitative. Defining AIS has been difficult today and research in this area is quite diverse. It includes behavioral studies of audit decision – making tools, field studies of organizational systems, design, development of general ledger systems, and development of accounting models that effectively utilize advancement in computer technology, application of different technology solutions to AIS situations, and many other types of studies. In general, an information system is used to represent the real world phenomena with a set of symbols which are captured and implemented within a computerized environment (McCarthy, 1979). Therefore, an accounting information system is one that translates representations of economic activities into a format that is valuable to accountants and to their customers i.e., business decision makers, who need information about economic activities. Accountants are being pressured to redefine their contribution to organizations and to expand the scope of their activities beyond financial statement preparation and analysis. They are being called upon to become active enterprise-wide team members who provide information and guidance in strategic decision- making salutations. Similarly, day-to-day operations managers demand a wide range of financial and non-financial performance measures. Therefore, if AIS is going to allow today’s accountants to provide the information, business decision makers, should meet the following definition: “An accounting information system is one that captures, stores, manipulates, and presents data, about an organization’s value-adding activities to aid decision makers in planning, monitoring, and controlling the organization.” This definition certainly includes financial accounting systems, which have the primary purpose of generating financial statements in accordance with Generally Accepted Accounting Principles (GAAP). However; this definition recognizes that businesses must perform a wide range of value-adding activities (such as production, distribution, sales, etc.) to be successful, and that the types of information needed to mange such activities will be extensive. Therefore, the scope of corporate systems that are included under the AIS umbrella is much broader than the general ledger system and the programs that prepare journal entries to feed it. Actually, AIS is a system that aids in processing transactions and in tracking the data that result from such transactions. These systems also must provide performance measurements (financial and non- financial) and...
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