An accounting information system (AIS) is a system for collecting, storing and processing financial and accounting data used by decision makers. Accounting information systems are generally computer-based methods for tracking accounting activities along with information technology resources. The resulting financial statements may be used internally by management or externally by other interested parties including investors, creditors and tax authorities. The accounting information system is designed to support all accounting functions and activities including auditing, financial accounting & amp; reporting, managerial/management accounting and taxes. The most widely used accounting information system is audit module and financial reporting.
Video Accounting information system
History
Traditionally, pure accounting is based on a manual approach. The experience and skills of an individual accountant are very important in the accounting process. Even using a manual approach can be ineffective and inefficient. The accounting information system solves many of the above problems. AIS can support the automation of processing large amounts of data and result in timeliness and accuracy of information.
Initial accounting information systems were designed for payroll functions in the 1970s. Initially, accounting information systems dominated "in-house" as a legacy system. Such solutions are expensive to develop and difficult to maintain. Therefore, many accounting practitioners prefer manual approaches rather than computer-based. Currently, accounting information systems are more often sold as prebuilt software packages from major vendors such as Microsoft, Sage Group, SAP AG | SAP and Oracle Corporation | Oracle where configured and customized to fit the business process of the organization. Small businesses often use low cost accounting software packages such as MYOB and Quickbooks. Large organizations often choose ERP systems. As the need for connectivity and consolidation between other business systems increases, the accounting information system is combined with a larger and more centralized system known as enterprise resource planning (ERP). Previously, with separate applications to manage different business functions, organizations had to develop complex interfaces to allow the system to communicate with each other. In ERP, systems such as accounting information systems are built as modules integrated into a set of applications that can include manufacturing, supply chains, human resources. These modules are integrated together and can access the same data and run complex business processes. Currently, cloud-based accounting information systems are increasingly popular for SMEs and large organizations at lower costs. With the adoption of accounting information systems, many businesses have eliminated low skills, transactional and operational accounting roles.
Maps Accounting information system
Sample architecture
An AIS usually follows a multitiered architecture that separates presentation to users, processing applications and data management in different layers. The presentation layer governs how information is displayed and viewed by a functional user of the system (via a mobile device, web browser or client application). The entire system is supported by a centralized database that stores all data. This may include transactional data generated from core business processes (purchases, inventories, accounting) or static, referenced master data when processing data (records of employee and customer accounts and configuration settings). When a transaction occurs, data is collected from a business event and stored into a system database where it can be retrieved and processed into useful information for making decisions. The application layer retrieves the raw data stored in the log database layer, processes it based on configured business logic and passes it to the presentation layer to be displayed to the user. For example, consider the debt department when processing invoices. With an accounting information system, a paymill payable enters the invoice, provided by the vendor, into the system where it is then stored in the database. When goods from vendors are received, receipts are made and also entered into SIA. Before the vendor pays the vendor's debt department, the system application processing rate performs a three-way match in which it automatically matches the amount on the invoice against the amount on the receipt and the original purchase order. After the game is over, the email is sent to the accounts payable manager for approval. From here, vouchers can be made and vendors can eventually be paid.
Advantages and implications
The great advantage of computer-based accounting information systems is that they automate and streamline reporting, develop sophisticated modeling and support data mining. Reporting is a key tool for organizations to accurately view summary, timely information used for decision making and financial reporting. The accounting information system pulls data from a centralized database, processes and modifies it, and ultimately produces a summary of the data as information that can now be easily consumed and analyzed by business analysts, managers or other decision makers. These systems should ensure that reports are timely so that decision makers do not act on irrelevant old information and, instead, can act quickly and effectively on the basis of report results. Consolidation is one of the benefits of reporting because people do not have to look through a large number of transactions. For example, at the end of a month, a financial accountant consolidates all paid vouchers by running a report on the system. The system application layer provides a report with the total amount paid to the vendor for that month. With large companies that generate large volumes of transactional data, running reports even with an AIS can take days or even weeks.
After a wave of corporate scandals from large corporations such as Tyco International, Enron and WorldCom, the main emphasis was placed on enforcing public companies to apply strong internal controls into their transaction-based systems. This was made into law with the issuance of the Sarbanes-Oxley Act of 2002 which stipulates that companies should produce internal control reports stating who is responsible for the organization's internal control structure and outlines the overall effectiveness of this control. Since most of these scandals are rooted in corporate accounting practices, Sarbanes Oxley's emphasis is placed on computer-based accounting information systems. Currently, AIS vendors praise their governance, risk management, and compliance features to ensure robust and secure business processes and organizational assets (including data) are guaranteed.
Implementation
Many large companies and SMEs are now adopting cost-effective cloud-based accounting information systems in recent years.
Looking back last year, most organizations, even larger ones, hire outside consultants, either from software publishers or consultants who understand the organization and who work to help choose and apply the ideal configuration, considering all the components.
Many AIS professionals work for consulting firms, large corporations, insurance companies, financial companies, government agencies and public accounting firms, among other types of companies. With advances in technology, traditional accounting practices will shift to the practice of accounting information systems. Both professional accounting and information technology bodies work on a new direction of accounting programs and industry practices. The System Auditor is one of the top choices in the last two decades, they see control, data processing, data integrity, common operations, maintenance, security and other aspects of all types of information systems used by businesses. Many companies will deal with software and find the right software for the company, or maintain software for the company. If you are interested in a career, you may have the option of working in the finance department of any type of business, or working with a financially oriented company or program oriented company specializing in SIA. Some job titles in this field of work include financial managers, financial auditors, and heads of finance. You can also be a computer system analyst, computer information system manager or computer software engineer or programmer specializing in financial software.
If you work with a finance-oriented company, your work tasks can range from analyzing the SIA to data integrity to managing the entire AIS. In a program-oriented company, your focus may be directed towards developing new software in AIS or fixing bugs in AIS. In either case, you may also have consultation options, which require traveling to various companies to provide analytics and advice on the company's AIS.
There are industry associations that offer certificates related to the AIS area including CISA, AIS, CISSP, CIA, AFE, CFE, and CITP.
See also
- Accounting software
- List of ERP software packages
References
Source of the article : Wikipedia
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