Accounting information system

ACCOUNTING INFORMATION SYSTEMAN OVERVIEW

PRESENTED BY:Saket Kashyap

CONTENT

• DATA AND INFORMATION

• WHAT IS AIS

• HISTORY OF AIS

• EFFECT OF MODERN TECHNOLOGY ON AIS

• COMPONENT

• MODEL OF AIS

• STEPS IN AIS

• OBJECTIVE ,PURPOSE AND USE OF AIS

• LIMITATION OF AIS

• CAREER OPPORTUNITIES IN AIS

Difference Between Data and Information

• Data means facts maybe numeric,

Texts, pictures, graphs etc…

• It may be represented by symbols

• Data is input

• Information is processed data

• More meaningful for users

• Information is output

AIS: At the Intersection of Accounting and IS

AccountingFinancial Accounting, Managerial accounting, and Taxation

Accounting

Information

Systems

Information

SystemsCollect,

Process,

Store,

Transform

and

Distribute

AIS

• Collection of data and processing procedures

• Creates needed information for users.

• AIS don’t just support accounting and finance business processes. Theyoften create information that is useful to non-Accountants

Finance: cash forecasts and actual payment and receipt information

Marketing: Sales, summary analyses, cost information, and sales forecasts

Human Resources: payroll analyses( including employee benefitinformation) and projections of future personnel costs

Production: inventory summaries and product cost analyses

History of Accounting Information Systems

Accounting information systems were predominantly developed “in-house” aslegacy systems. Such solutions were difficult to develop and expensive to maintain.

Today, accounting information systems are more commonly sold as prebuilt softwarepackages from vendors such as Microsoft, Sage Group, SAP and Oracle where it isconfigured and customized to match the organization’s business processes. As theneed for connectivity and consolidation between other business systems increased,accounting information systems were merged with larger, more centralized systemsknown as enterprise resource planning

The Effect of Modern Technology in Accounting

Technology has greatly improved the accounting industry over the past several

decades. As personal computers have become standard office equipment, companies

have utilized accounting software as replacements for standard paper ledgers and

loose-leaf binders. Companies have also been able to customize their technology

needs to their business operations, eliminating unnecessary tasks in their accounting

processes. In addition to increased productivity, companies have developed faster

financial reporting and centralized accounting operations.

MAIN COMPONENTS OF AIS

• Accounting information systems are composed of six main components:

• People: users who operate on the systems

• Procedures and instructions: processes involved in collecting, managingand storing the data

• Data: data that is related to the organization and its business processes

• Software: application that processes the data

• Information technology infrastructure: the actual physical devices andsystems that allows the AIS to operate and perform its functions

• Internal controls and security measures: what is implemented to safeguardthe data

Model of AIS

MANAGEMENT

DATA PROCESSING SOFTWARE

DATABASE

INPUT PHYSICAL RESOURCES TRANSFORM

OUTPUT PHYSICAL RESOURCE

DATA INFORMATION …………………………………….

Accounting data processing consist of four major task

Data collection

Data manipulation

Data storageDocument

preparation

Steps of AIS

INPUT PROCESS

OUTPUTCONTROL

NEXT

• Transaction data

• Status information regarding different entities such as customers,

vendors, employees etc..

Back

Classification ComparisonAggregation

and Summation

Calculation

BACK

FINANCIAL STATEMENTS

• Income statement

• Balance sheet

• Statement of change in financial position

MANAGEMENT REPORTS

OTHER OUTPUT DOUCUMENTS

• Customer invoice

• Material purchase order

• Pay chequesBACK

External Control Factors

• To follow generally accepted accounting principles

• To follow accounting standards

• Follow rules and laws by the government and the statutory bodies

INTERNAL CONTROL FACTORS(MANAGEMENT)

• To ensure quality and security of information

• To analyze the variances between actual and standard performance

• To take corrective action for variances

BACK

Objective of AIS

• To provide reliable accounting information to different users.

• Supporting routine activities

• To meet statutory reporting needs of an enterprise.

• To protect the enterprise from the possible risk of misuse of accounting data.

PURPOSES OF AIS

• Inventory control

• Sales order processing

• Accounts receivable

• Accounts payable

• Payroll

• General ledger

USE OF AIS BY

• Various customers

• Manager

• Consultant

• Evaluator

• Provider of accounting and tax services

Limitation of Accounting Information System

• COST

• RELIABILITY OF COMPUTERS

• FRAUD

• ADDITIONAL SOFTWARE

• HUMAN ERROR

• TRAINING

Careers in Accounting Information Systems

Systems consultants

provide help with information systems in

Designing information systems,

Selecting hardware and software, or

Re-engineering business processes.

Value-added resellers (VARs)

Sell a certain software program and

Provide consulting services to companies ain software program and

provide consulting services to companies.