Accounting Information SystemPosted by Kelli Rose on January 5th, 2021 Accounting Information System (AIS) is a structure used by businesses to collect, store, manage, process, retrieve and report their financial data for accountants, consultants, business analysts, managers, chief financial officers (chief financial officers), audit institutions, and Regulatory agencies and tax authorities. In particular, trained accountants work with AIS to ensure that the accuracy of the company’s financial transactions and accounting reaches the highest level, and to make the financial data that legal principles need to be accessed more easily available while maintaining the integrity and security of the data. This article will describe the main components of AIS and some of its real-world applications. Components of the Accounting Information System The accounting information system consists of six main parts: personnel, procedures and instructions, data, software, information technology infrastructure, and internal control. Let's take a look at the details of each component People People in AIS are only system users. Professionals who may need to use the organization's AIS include accountants, consultants, business analysts, managers, chief financial officers, and auditors. (Learn more about what a CFO does? AIS helps different departments within the company work together. For example, management can establish operational goals, and employees can then order an appropriate amount of inventory. The inventory slip informs the accounting department of the new payables. When selling, sales staff can enter customer orders, accounts for customers who can invoice, warehouses can assemble orders, transportation departments can deliver goods, and accounting departments receive new receivables. The customer service department can track customer shipments, and the system can create sales reports for management. Managers can also view inventory costs, transportation costs, manufacturing costs, etc. Through a well-designed AIS, authorized personnel in the organization can access the same system and obtain the same information. AIS can also simplify the provision of information to people outside the organization when necessary. For example, a consultant may use the information in AIS to analyze the effectiveness of the company's pricing structure by looking at cost data, sales data, and revenue. In addition, auditors can use the data to assess the company’s internal controls, financial status and compliance with the Sarbanes-Oxley Act (SOX (learn more about accounting regulations; view financial history: the rise of modern accounting). AIS should be designed to meet the needs of the people who will use it. The system should also be easy to use and should be improved without hindering efficiency. Procedures and instructions The rules and instructions of AIS are the methods of using, collecting, retrieving, and processing data. These methods will be two-handed and automated, and data can come from internal sources (such as employees) and external sources (such as online orders from customers). Procedures and instructions will be coded into AIS software; they should also be "coded" to employees through documents and training. For storing information, AIS must have a database structure, such as the classically structured query language (SQL) of computers commonly used in databases. AIS will also provide various input screens and different output formats for different types of system users and different types of data input to meet the needs of different users and different types of information. (Is your job as a financial scammer interested in you? Learn more about uncovering a career in forensic accounting. Data The data contained in AIS is financial information related to the organization's business practices. Any business data that affects the company's financial status should be included in AIS. The data contained in AIS will depend on the nature of the business, but may include the following:
Tax information This data can be used to prepare accounting statements and accounts receivable aging, depreciation/amortization schedules, trial balances, income statements, and other accounting statements. Putting all this data in one place-in AIS-facilitates business record keeping, reporting, analysis, auditing, and decision-making activities. In order for the data to be useful, it must be complete, correct, and relevant. On the other hand, examples of data that will not enter AIS include memos, correspondence, presentations, and manuals. These documents may be relevant to the company's finances, but do not include standard footnotes, they are not the true part of the company's financial records Software The software component of AIS is a computer program used to store, retrieve, process, and analyze company financial data. Before computers, AIS was a manual, paper-based system, but now most companies are using computer software as a basis. Small and medium enterprises may use SAP Business One. Medium and large enterprises may use Microsoft's "power GP, including Sage Group's MAS 90 or MAS 200, Oracle's Peoplesoft, or Epicor Financial Management. Quality, reliability, and safety are the key components of effective AIS software. Managers rely on information to make decisions for the company, and they need high-quality information to make the right decisions. AIS software programs can be customized to meet the unique needs of different types of businesses. If the existing program does not meet the company's needs, the software can also be developed internally with substantial input provided by the end-user, or it can be developed by a third-party system specifically for the organization. The system can even be outsourced to specialized companies. For publicly listed companies, no matter what software programs and customization options the company chooses, the Sarbanes-Oxley Act will regulate the structure of AIS to a certain extent. This is because SOX regulations establish internal control and audit procedures that must be followed by listed companies Assignment Writing Help. Like it? Share it! |