This aspect covers how the Systems Accounting actually works. This can be made up of both automated and manual components, compiling data from internal sources (like information directly entered by employees) and external sources (like data from customer billing records). Some employees might have full access to accounting systems, while others can only get to certain areas. Often the accounting team will set a policy that determines each employees permissions. Show This part of the system refers to the way financial information is collected, stored, processed, and distributed. It also has to do with direction and instruction given to the people who use it by means of employee training and development of skills, interface design, and system function.
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Introduction to Accounting Information SystemAccounting Information System is a combination of technology and accounting principles that helps in the collection of data, proper storage of data, processing of data and to create a readable output of the data which helps in the preparation of financial statements. The AIS is very crucial for an organization as it is being used by several stakeholders of the company in order to make an estimate of the company’s performance. Tax Authorities pull data from AIS in order to calculate tax liability. Every organization generates a huge amount of financial information in their day to day operations. Earlier the information was stored manually by writing them down in journals. As the economy became global and organizations started to expand. It became impossible to store data manually. So Accounting Information System helps in the secure storage of financial information that is generated at several stages of operation by a firm. Objectives of Accounting Information System
Example of Accounting Information SystemCompany ABC is a small business engaged in the manufacturing of textile. They are planning to opt for a cheap and effective Accounting Information System. The main criteria of an Accounting Information System are storage, which is costly. So if there is an accounting system that will run on the cloud, then the company can save storage cost. FreshBooks is an Accounting Information System that is built on cloud infrastructure. There are several built in tools in the system which will help the organization to effectively manage its receipts, payments, invoices, etc. Components and Functions of AISComponents and functions of AIS are given below: Components
Functions
How Accounting Information System is Used?AIS is used to store data that is related to the business. Important data like revenue, purchases, employee, customer, tax, etc are stored in AIS. All the storage requires a database to perform. There are computer languages that are used to input data in the database and also to generate output as and when required. After all the inputs, the main challenge is security. So several measures are taken for cyber-security in order to protect sensitive data. Advantages and Disadvantages of AISSome of the advantages and disadvantages are given below: AdvantagesBelow are the advantages mentioned:
DisadvantagesBelow are the disadvantages mentioned:
ConclusionAccounting Information System is a modernized form of record keeping that merges hardware and software in order to provide an error free form of record keeping and processing. Almost all the business use AIS. The main concern of AIS is security. One should keep the security factor in mind before choosing an effective AIS. Recommended ArticlesThis is a guide to the Accounting Information System. Here we also discuss the introduction to Accounting Information System with Components of AIS, advantages and disadvantages. You may also have a look at the following articles to learn more – |