Accounting Information Systems

Accounting Information Systems

Accounting Information Systems (AIS) collect, record, store, and process data to produce information for decision makers. Accounting information systems are a set of interrelated components, that interact, to achieve a goal.

Most accounting information systems are composed of smaller subsystems and vice-versa, every organization has goals. Accounting Information Systems can use advanced technology, be a simple paper-and-pencil system or be something in between. Technology is simply a tool to create, maintain, or improve a system.  An accounting information systems topics impact corporate strategy and culture.

Accounting information systems offers value and is a very important part of the value chain. Although “adding value” is a commonly used buzzword, in its genuine sense, it means making the value of the finished component greater than the sum of its parts. It can mean, making it faster, making it more reliable, providing better service or advice, providing something in limited supply, providing enhanced features or customizing it. Value is provided by performing a series of activities referred to as the value chain which includes primary activities and support activities. These activities are sometimes referred to as “line” and “staff” activities respectively.

Information technology can significantly impact the efficiency and effectiveness with which the preceding activities are carried out. An organization’s value chain can be connected with the value chains of its customers, suppliers, and distributors.

The functions of Accounting Information Systems are to:

  • Collect and store data about events, resources, and agents.
  • Transform that data into information that management can use to make decisions about events, resources, and agents.
  • Provide adequate controls to ensure that the entity’s resources (including data) are:
    • Available when needed
    • Accurate and reliable

Accounting information systems are the structures and architecture on which accounting information is captured, processed and reported. They happen to be computer-oriented in this day and age. To understand and create useful systems you must understand business, business processes, accounting, and a bit of technology.