The area of accounting information system Essay

1. Purpose: –

The purpose of this study is to better the cognition in the country of accounting information system. Furthermore, seek to understand, how its work in an administration and give competitory advantages as comparison to those who are utilizing manually accounting information system.

2. Introduction: –

Davies ( 2002, p.4 ) describes that Information System is set of interrelated constituents that collect, procedure, analyse, shop and present seasonably and appropriate information for determination devising. Information system is distinguishable from information engineering because IT is besides a constituent of Information system.

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Information engineering is related with hardware and package used in computerized information system and that has important impact in determining our concern universe ( Davies 2002, p.5 ) .

This study is divided into four subdivisions. First subdivision high spots what is AIS? How its work? Second subdivision provides the information about the countries screen by AIS. Third subdivision emphasizes how AIS works in an administration? It provides the information sing histories receivable system, histories collectible system, general leger, paysheet, budgetary system and stock control system. The 4th subdivision of the study indicates the benefits of accounting information system in accounting and administration as a whole.

3. AISaa‚¬ ” information Systems

Harmonizing to Ezinearticles “Accounting information system is a system of records, normally computing machine based, which combines accounting rules and constructs with the benefits of an information system and which is used to analyse and record concern minutess for the intent to fix fiscal statements and supply accounting informations to its users. Some accounting information systems are still manual, i.e. accounting records are made with a pen, paper and manual entries into accounting books.” ( Bagranoff, Simkin and Strand 2005, p.4 )

Beginning: Bagranoff, Simkin and Strand ( 2005, p.7 )

3.1 Software used in Accounting Procedure: –

Software performs the basic accounting maps like input, processing and end product. Software is divided into two classs such as low terminal and high terminal. In low terminal all of the map is perform within one package and it is called all in one package. On the other manus, in high terminal, each and every map performs separate. Low terminal package is used by little companies and high terminal package is used by big companies ( Dalci and Tanis 2000 ) .

4. Business Areas screen under AIS: –

AIS screen all concern accounting countries from aggregation of informations to analysing of fiscal studies. That helps for the directors to take appropriate timely determinations at greater truth.

Beginning: Bagranoff, Simkin and Strand ( 2005, p.15 )

4.1 Financial Reporting System: –

Bagranoff, Simkin & A ; Strand ( 2005, p.165 ) provides the information that fiscal coverage is related with operation degree, where buying, merchandising and production activities perform by the company. Each and every company utilize different dealing treating systems harmonizing to their demand. For illustration: – Sage, SAP, TELLY, GAAP. With the aid of different package every company prepare Net income and Loss A/C and Balance sheet. After fixing fiscal histories, company take appropriate determinations related with buying, merchandising, net incomes, debt, portion capital, working capital and assets direction. Furthermore, fiscal study is besides issued for the external stakeholders. These stakeholders besides, take determinations on the footing of fiscal studies ( Laudon & A ; Laudon, 2006, p.49 ) .

4.2 Cost Accounting System: –

Cost accounting systems are used to track the costs associated with the industry of goods and the bringing of service. In this criterion costing, fringy costing, activity based costing, soaking up bing perform by utilizing different accounting package. The chief intent of this accounting system is to better resource allotment and public presentation ( Bagranoff, Simkin & A ; Strand 2005, p 17 ) .

4.3 Management Accounting System: –

Management accounting system is used for planning, commanding and supervising the different activities with in an organisation. In this budget, discrepancy analysis, strategic planning, gross revenues and fiscal prediction, monetary value volume analysis, monetary value patterning perform and this helpful for the director to take appropriate determinations sing monetary value, cost, budgets, future net incomes, gross revenues etc ( Bagranoff, Simkin & A ; Strand 2005, p 16 ) .

4.4 Budgeting: –

Bagranoff, Simkin and Strand ( 2005, p.18 ) describe that budgeting is an of import fiscal tool that is used for future anticipation. Company formulate long and short term budgets. Long term budget is made for five or more old ages and short term budget is for 12 month period.

If a company has good budgetary system so the company can foretell future fiscal outlook, accurately. Furthermore, if there is any fluctuation between existent and budgeted so the directors can take appropriate action to get the better of these fluctuations in future.

4.5 Auditing: –

Information system plays an of import function in scrutinizing the histories of the company. Now, hearers get equal and appropriate information whenever they want ( Bagranoff, Simkin and Strand 2005, p.18 ) .

4.6 Tax: –

Through effectual AIS, revenue enhancement professional calculate the sum of revenue enhancement return really rapidly. There is some package, with which they adjust their income in different classs.

Now yearss, a big figure of population complete their income revenue enhancement return through computing machine based plan such as turbo revenue enhancement. There is some package ( Tax return package ) that creates and shop transcripts of revenue enhancement return ( Bagranoff, Simkin and Strand 2005, p.19 ) .

Beginning: Bagranoff, Simkin & A ; Strand ( 2005, p.15 )

5. Accounting System: –

Beginning: Gelinas & A ; Dull ( 2009 )

In general, accounting system is divided into 3 major subsystems. These are history receivable, account collectible and general leger. The information record by history receivable system is related with gross revenues of goods and services ( clients ‘ payment, clients invoice, etc. ) . Account collectible system record informations related with the purchase of natural stuff and assets. Therefore, purchase leger prepare for entering the information in history collectible system. Third accounting system is general leger system ; in this all fiscal minutess related with administration are recorded in different histories. For illustration: – assets, income and outgo. This system receive informations from history receivable, account collectible and stock control system.

5.1 Accounts Receivable System: –

Hall ( 2008, p.45 ) describes that histories receivable system manages the hard currency flow of the administration in an appropriate manner. When finished goods present to clients so amount owed by client is recorded in history receivable system and when the compa ny get payments from client so the recognition balance of the client cut down. The information about client recognition and sum receive is on a regular basis used to update the general leger system.

5.2 Accounts Collectible System: –

The history collectible system is besides really of import in pull offing the hard currency flow of administration. When natural stuffs are ordered to providers so sum owed to providers is recorded in history collectible system and when the company paid to providers so the recognition balance owed to providers cut down by an appropriate sum. The informations about recognition owed to providers and sum paid is on a regular basis used to update the general leger system ( Hall 2008, p.45 ) .

5.3 General Ledger Function: –

The general leger system besides gets information from stock control system and paysheet system. Stock control system provides information sing the current fiscal place of the company and paysheet system provides information sing the cost incurred in paying staff ( Hall 2008, p.45 ) .

6. Benefits: –

In this competitory universe, each and every concern demand quick, dependable, appropriate, and equal information for monitoring, analyzing, commanding different activities those have important consequence on company ‘s public presentation. Through AIS, Company can better its public presentation and command its resources really good.

Accounting records are analysed and studies are prepared with the aid of accounting information system. This increases the truth and dependability of the studies because AIS are good capable of supplying error free information.

Now this study will foreground the benefits of AIS for Accounting country and an administration as a whole.

6.1 Accounting: –

The comptrollers get accurate and timely information sing cost, net incomes, gross, gross revenues, stocks, assets, liabilities etc. It generates accounting paperss ( leger, bills and statement of histories ) automatically. Furthermore, it is cheaper as comparison to manual accounting system. Different types of studies generate through AIS for doing determination ( Gelinas & A ; Dull 2009 ) .

6.2 Administration: –

Gelinas & A ; Dull ( 2009 ) describe that with the aid of accounting information system, the top degree direction take appropriate and speedy determinations whenever they need. For illustration: – If company is looking to buy plus so with AIS, top degree directors knows how much financess are available with in the company to purchase this peculiarly assets.

On day-to-day footing each and every section knows what their public presentation is and what is the cardinal refering factors? On that footing, refering section can better their public presentation effetely.

If the AIS is appropriate so it reduces the spread between fiscal and non fiscal directors.

6.3 Disadvantages: –

There are some disadvantages of AIS as good. First, there is higher opportunity of informations loss if any virus and hacker, chop the system. Second, if company non install proper security and control system so there is a higher opportunity of fraud as good. Third, if the accounting system non decently meets the demand of the concern so it is merely give concern to the company.

7. Decision: –

These yearss, AIS play an of import function for the success of an administration. Quick, dependable, appropriate and equal information go through between underside to exceed and exceed to bottom through AIS. On that footing directors take suitably and timely determinations harmonizing to demand. It helps in bettering the public presentation of the administration by foregrounding the concern countries of concern. Therefore, AIS is an of import tool these yearss but if company non following proper security and control system so there will be a higher opportunity of fraud and loss of informations. So, the company has to set up AIS harmonizing to their demand and that company can update in future.

8. Mention: –

Bagranoff, N. A. , Simkin, M. G. & A ; Norman, C.S. ( 2005 ) Core Concepts of Accounting Information System. 9th edn. Hoboken: John Wiley & A ; Sons, Inc.

Boczko, T. ( 2007 ) Corporate Accounting Information Systems. Google Books [ Online ] . Available at:

hypertext transfer protocol: // id=DAyvNWb7704C & A ; printsec=frontcover & A ; dq=accounting+information+system & A ; lr= # v=onepage & A ; q=benefits % 20of % 20accounting % 20information % 20system & A ; f=false ( Accessed: 2 December 2009 ) .

Dalci, I. & A ; Tanis, V. N. ( 2000 ) Benefits of Computerized Accounting Information Systems on the JIT Production System, [ Online ] . Available at: hypertext transfer protocol: // ( Accessed: 2 December 2009 ) .

Davies, P. B. ( 2002 ) Information Systems An Introduction to Informatics in Organisations. Nottingham: Palgrave.

Gelinas, U. J. & A ; Dull, R. B. ( 2009 ) Accounting Information System. Google Books [ Online ] . Available at: hypertext transfer protocol: // id=_AnCDf-9ZfgC & A ; pg=PT641 & A ; dq=benifits+of+accounting+information+system & A ; lr= # v=onepage & A ; q=benefits % 20of % 20accounting % 20information % 20system & A ; f=false ( Accessed: 2 December 2009 ) .

Hall, J. A. ( 2008 ) Accounting Information Systems. Google Books [ Online ] . Available at:

hypertext transfer protocol: // id=khm_JkedGz4C & A ; printsec=frontcover & A ; dq=accounting+information+system # v=onepage & A ; q=accounting % 20system & A ; f=false ( Accessed: 2 December 2009 ) .

Laudon, K. C. & A ; Laudon, J. P. ( 2006 ) Necessities of Business Information Systems. 7th edn. New Jersey: Pearson Education.


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