accounting information system-nikita puri, pooja sardana

Accounting Information System – AIS {Nikita puri}

Introduction-

An accounting information systems that combines traditional accounting practices such as the Generally Accepted Accounting Principles (GAAP) with modern information technology resources. Six elements compose the typical accounting information system:

• People - the system users.
• Procedure and Instructions - methods for retrieving and processing data.
• Data - information pertinent to the organization's business practices.
  
• Software - computer programs used to process data.
  
• Information Technology Infrastructure - hardware used to operate the system.
• Internal Controls - security measures to protect sensitive dat

Discussion

· Software architecture of a modern AIS

· A modern AIS typically follows a multiplier separating the presentation to the user, application processing and data management in distinct layers. The presentation layer manages how the information is displayed to and viewed by functional users of the system (through mobile devices, web browsers or client application). The entire system is backed by a centralized database that stores all of the data. This can include transactional data generated from the core business processes (purchasing, inventory, accounting) or static, master data that is referenced when processing data (employee and customer account records and configuration settings). As transaction occur, the data is collected from the business events and stored into the system’s database where it can be retrieved and processed into information that is useful for making decisions. The application layer retrieves the raw data held in the database layer, processes it based on the configured business logic and passes it onto the presentation layer to display to the users. For example, consider the accounts payable department when processing an invoice. With an accounting information system, an accounts payable clerk clerk enters the invoice, provided by a vendor , into the system where it is then stored in the database. When goods from the vendor are received, a receipt is created and also entered into the AIS. Before the accounts payable department pays the vendor, the system’s application processing tier performs a three-way matching where it automatically matches the amounts on the invoice against the amounts on the receipt and the initial purchase order. Once the match is complete, an email is sent to an accounts payable manager for approval. From here a voucher can be created and the vendor can ultimately be pai

Advantages and implications of AIS

A big advantage of computer-based accounting information systems is that they automate and streamline reporting. Reporting is major tool for organizations to accurately see summarized, timely information used for decision-making and financial reporting. The accounting information system pulls data from the centralized database, processes and transforms it and ultimately generates a summary of that data as information that can now be easily consumed and analyzed by business analysts, managers or other decision makers. These systems must ensure that the reports are timely so that decision-makers are not acting on old, irrelevant information and, rather, able to act quickly and effectively based on report results. Consolidation is one of the greatest hallmarks of reporting as people do not have to look through an enormous number of transactions. For instance, at the end of the month, a financial accountant consolidates all the paid vouchers by running a report on the system. The system’s application layer retrieves the data from the database and provides a report with the total amount paid to its vendors for that particular month. With large corporations that generate large volumes of transactional data, running reports with even an AIS can take days or even weeks.

After the wave of corporate scandals from large companies such as tycoon international , worldcom , major emphasis was put on enforcing public companies to implement strong internal controls into their transaction-based systems. This was made into law with the passage of the sarbans oxley of 2002 which stipulated that companies must generate an internal control report stating who is responsible for an organization’s internal control structure and outlines the overall effectiveness of these controls. Since most of these scandals were rooted in the companies' accounting practices, much of the emphasis of was put on computer-based accounting information systems. Today, AIS vendors tout their governance, risk management etc features to ensure business processes are robust and protected and the organization's assets (including data) are secured.

How to effectively implement AIS {Pooja sardana}

As stated above,accounting information systems are composed of six main component^;

1. People: users who operate on the systems
2. Procedures and instructions: processes involved in collecting, managing and storing the data
3. Data: data that is related to the organization and its business processes
4. Software: application that processes the data
5. Information technology infrastructure: the actual physical devices and systems that allows the AIS to operate and perform its functions
6. Internal controls and security measures: what is implemented to safeguard the data.

Conclusion

In this report, an information system’s development has been presented. It wasemphasized on the basic steps, consequently taken during the project’s developmentcourse as a particular attention was turned to the basic operative functions performedupon the data into the database.The report’s content comprises the whole task solution, starting from the programmingenvironments have been selected, going through the database, the application’s analyzeand construction, and finishing with the code-implementation and test-samples, shownseparately in Appendix chapters.As a future work, some additional stuff could be implemented and integrated into theapplication code making it much more reliable and flexible; especially what concerns apay-roll module, for instance.Apparently, the role of such systems is basic and essential within each company thatwants to keep a really good control and record concerning its personnel data,functionality and performance on all levels in its structure. Every organization, innowadays, has the necessity of managing its staff on a really good level as the staff hasdefinitely the greatest merit of building up a company as such as it is. The well-managed staff means giving the appropriate financial award-ness and all kind of benefits as such as they have been deserved. That’s why the development of suchsystems is not just a programming business – a lot of people are ordinarily involved insuch projects and one of the basic requirements is the reliability of the system,especially what concerns the storage of data .