Accounting
Information System (AIS) provides a tool for finance department to enhance organizational
effectiveness especially in this era of global technology advancement. As
information technologies grow more progressive, the manual accounting systems
have become gradually inadequate for decision needs. Consequently, public and
private sector firms in both developing and developed economies view
computerized accounting information system as a vehicle to ensure effective and
efficient information flow in the recording, processing, and analysis of
financial data. Effective and efficient information flow enhances managerial
decision-making, thereby increasing the firm’s ability to achieve corporate and
business strategy objectives. This in turn, may increase the prospects of the
firm’s survival.
DEFINITION
An accounting
information system is a unified
structure within an
entity, such as a business firm,
that employs physical
resources and other
components to transform economic data into accounting
information, with the purpose of satisfying the information needs of a variety of users (Dey, 2007).
An
accounting information system is a collection of data and processing procedures
that creates needed information for its users.
An
accounting information system is a computerized system using computers designed
to collect data, enter, process, store, and provide users with the information
they need to plan, control and operate their businesses.
An accounting
information system (AIS)
is a structure that a business uses to collect, store, manage, process,
retrieve and report its financial data so that it can be used by accountants,
consultants, business analysts, managers, chief
financial officers (CFOs),
auditors and regulatory and tax agencies. In particular, specially trained
accountants work with AIS to ensure the highest level of accuracy in a
company's financial transactions and recordkeeping and to make financial data
easily available to those who legitimately need access to it, all while keeping
data intact and secure. This article will describe the primary components of an
AIS and some of its real-life applications.
An information system is a
formal process for collecting data, processing the data into information, and
distributing that information to users. The purpose of an accounting
information system (AIS) is to collect, store, and process financial and
accounting data and produce informational reports that managers or other
interested parties can use to make business decisions. Although an AIS can be a
manual system, today most accounting information systems are computer-based.
COMPONENT OF ACCOUNTING INFORMATION SYSTEM
An accounting
information system typically has six basic parts:
1.
People who use the system, including accountants, managers, and
business analysts
2.
Procedure and instructions are the ways that data are collected,
stored, retrieved, and processed
3.
Data including all the information that goes into an AIS
4.
Software consists of computer programs used for processing data
5.
Information technology infrastructure includes all the
hardware used to operate the AIS
6.
Internal controls are the security measures used to protect
data