Topics: Accounting software, Management, Information systems Pages: 25 (8141 words) Published: May 1, 2013
Accounting Information System (AIS) is vital to all organizations according to (Borthick and Clark, 1990; Curtis, 1995; Rahman et al., 1988; Wilkinson, 1993; Wilkinson et al., 2000) and perhaps, every organizations Either profit or nonprofit-oriented need to maintain the AISs (Wilkinson, 2000: 3-4) to better Understand the term ‘Accounting Information System’, the three words constitute AIS would be Elaborate separately. Firstly, literature documented that accounting could be identified into three Components, namely information system, “language of business” and source of financial information (Wilkinson, 1993: 6-7) Secondly, information is a valuable data processing that provides a basis for Making decisions, taking action and fulfilling legal obligation. Finally, system is an integrated entity; Accounting information systems are a decades-old business function. These traditional systems often included various paper ledgers, journals and other reports for recording and maintaining financial transactions. Business owners or managers reviewed their company's financial information to ensure its accuracy and validity. Further analysis would provide additional insight on trends or other operational issues needing attention. While this system worked well for its time period, companies cost only develop new techniques for improving financial information reporting. Modern day accounting information systems are usually an automated function using computers, servers and intranets for electronically processing financial information. These systems allow companies to collect and gather financial information in a real-time format. This process ensures managers have the most up-to-date information for business decisions. Companies can also implement this system into multiple domestic or international business locations. The accounting information systems usually include several different modules. Modules include general accounting, fixed assets, accounts payable, accounts receivable and other financial functions. Each system module collects information from specific business departments based on the setup of the system. Accountants review the information to ensure all information relates to the proper accounting period and does not contain any operational or functional errors. Companies often consider implementing internal controls to safeguard the integrity of their accounting information system. Internal controls limit the number of individuals accessing information system, number of responsibility each accountant completes and the review process used by accounting managers or supervisors to verify accounting information. Internal controls also ensure external business stakeholders that companies have properly accounted for financial transactions and taken the necessary steps for protecting the information. Public accounting firms can provide companies with a professional opinion on developing a proper accounting information system. Public accountants may also have specific experience or expertise in computerized information systems. This insight helps companies decide which computerized accounting information system will work best for their company and estimate the cost for implementing this system. Small businesses may struggle to implement these systems due to their complexity and cost. An accounting information system (AIS) provides financial information about a business. This information helps managers plan and control operations and provides reports to outside parities such as stockholders, creditors, and government agencies. Parts of an accounting information system might include financial reporting, cost accounting, management accounting and enterprise resource planning (ERP). Well-designed AIS gives a business a reliable way to view and analyze financial information. An accounting information system that combines traditional accounting practices such as the Generally Accepted Accounting...
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