ACCOUNTING INFORMATION SYSTEM PDF

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1. AIS stands for Accounting Information System. An accounting information

system (AIS) is a structure that a business uses to collect, store, manage, process, retrieve, and report its financial data so it can be used by accountants, consultants, business analysts, managers, chief financial officers (CFOs), auditors, regulators, and tax agencies. Also, accounting information system is generally a computer-based method for tracking accounting activity in conjunction with information technology resources. The resulting financial reports can be used internally by management or externally by other interested parties including investors, creditors and tax authorities. Accounting information systems are designed to support all accounting functions and activities including auditing, financial accounting & reporting, -managerial/ management accounting and tax. 2. Accounting Information System (AIS) uses financial data, but Management Information System (MIS) uses non-financial data besides the financial data. The accounting information system processes the information’s which have financial implication on users while the management information system processes those financial information’s which are important for business functions. Accounting information system pertains to finances while the management information system is a much broader concept. The information obtained through accounting information system is critical for management information system. The aim of both systems is to provide information to improve decision making and increase the effectiveness and efficiency. 3. Data is a raw and unorganized fact that required to be processed to make it meaningful while information is a set of data which is processed in a meaningful way according to the given requirement. Data is always interpreted, by a human or machine, to derive meaning. So, data is meaningless. Data contains numbers, statements, and characters in a raw form. On the other side, information is processed by data which includes data that possess context, relevance, and purpose. It also involves manipulation of raw data. Information assigns meaning and improves the reliability of the data. It helps to ensure undesirability and reduces uncertainty. So, when the data is transformed into information, it never has any useless details.

4. Discretionary reporting refers to such reports provided to the internal management of an organization that are non-legal and non-mandatory in nature. These reports help the management in taking decisions related to business operations. At discretion, a firm can select the information which has to report and also the manner in which information should be recorded. The organization is not legally bound to generate these reports or comply with specific formats. These reports are created to provide added information to the decision makers of the organization to help them do their jobs better. It helps the management in planning, analysing and controlling the operations better. 5. The Accounting information system is composed of three major subsystems. First, the transaction processing system (TPS), which supports daily business operations with numerous reports, documents, and messages for users throughout the organization. Also, the transaction processing system or TPS is the lifeblood of all the Accounting Information System. Second, the general ledger/financial reporting system (GL/FRS), which produces the traditional financial statements, such as the income statement, balance sheet, statement of cash flows, tax returns, and other reports required by law. Lastly, the management reporting system (MRS), which provides internal management with special-purpose financial reports and information needed for decision making such as budgets, variance reports, and responsibility reports. 6. Data redundancy refers to the duplication of data. For example, professors managing the data of a college where a student is enrolled for two courses, the same student details in such case will be stored twice, which will take more storage than needed. Sometimes data redundancy happens by accident while other times it is intentional. So, accidental data redundancy can cause a problem that it can result to a complex process or inefficient coding. Also, it is a problem in flat file system because it can leads to higher storage costs and poor access time. 7. The accountants may be called upon to assist a company in developing its

Accounting information system. The knowledge of an accountant in accounting and auditing methods and procedures is important in helping a

company choose or design the best software and overall system. Also, because computers play such an important role in modern accounting, the accountant will benefit from a background in information systems. Accountants will also access the data in the company's AIS in order to perform their job functions, including preparing and analyzing budgets and financial statements, preparing tax returns and examining records for accuracy. 8. In accounting, ERP is the acronym for enterprise resource planning. ERP

could be described as a database software package that supports all of a business's processes and operations including manufacturing, marketing, financial, human resources, and so on. In other words, the goal of ERP is to have one integrated system for the entire company. The integration of all of a company's information from all departments, processes, operations, etc. requires that an ERP system be very sophisticated. This in turn requires a company to commit considerable resources for planning, training, and implementing an ERP system. 9. For me, the processes in the supply chain that can be made more efficient using the AIS is when it comes in operational and financial planning. It may mean making it faster, making it more reliable, providing something in limited supply, providing enhanced features, or customizing it. It is important for an organization to synchronize their operational and financial planning on a real time updates. Also, operation and financial planning because it helps to determine the short and long-term goals and create a balanced plan to meet those goals of an organization. Better service is one of the results that organization can benefit from it. 10. My expectations to this course are, this course would help me as an accounting student to understand how information systems are designed, implemented and used. Also, help me to learn how financial information is reported. And how that information is used to make decisions. Though there is an expectation in this course that it would be quite hard because there is “accounting” word in the subject itself but with the help of our professor in AIS, I believed that we can pass in this subject. I believed that this course would help me in many aspects that I can use in the future as an accountant.

Financial planning helps you determine your short and long-term financial goals and

create a balanced plan to meet those goals...