20 Nov Accounting Information Systems Overview (AIS)
Accounting Information Systems (AIS) is for the benefit of accountants, consultants, business analysts, managers, chief financial officers (CFOs), auditors, regulators, and tax agencies, a company uses an accounting information system (AIS) to gather, store, manage, process, retrieve, and report its financial data.
To assure the highest level of accuracy in a company’s financial transactions and record-keeping, as well as to make financial data easily accessible to those who legitimately need access to it—all while keeping data intact and secure—specially trained accountants work closely with AIS.
Typically, accounting information systems are made up of six main parts
Accounting Information Systems (AIS) People
The users of an AIS are the users of the system. An AIS facilitates communication between a company’s many departments. Accountants, consultants, business analysts, managers, chief financial officers, and auditors are among the professionals who may require access to an organization’s AIS.
Everyone inside an organization can access the same system and retrieve the same information with the help of a well-designed AIS. When appropriate, an AIS makes it easier to report information to others outside of the business.
The needs of the users of the AIS should be taken into consideration during design. Additionally, the system must be simple to use and should boost productivity rather than reduce it.
2.Procedures and Instructions
The ways an AIS employs for gathering, storing, retrieving, and processing data are described in its procedure and instructions. Both manual and automatic techniques are used here. The information may come from both internal (such as employees) and external (such as online orders from customers) sources. The AIS software will be programmed with instructions and procedures. Through documentation and training, staff should also be “programmed” with the procedures and directives. To be effective, the guidelines and directions must be constantly followed.
AIS Data
To store information, an AIS needs a database structure, such as one that uses structured query language (SQL), a computer language frequently used for databases. The AIS’s data can be modified and retrieved using SQL for reporting needs.
All of the financial data relevant to the company’s operational procedures is contained in an AIS. An AIS should contain any business information that has an effect on the company’s finances.
Accounting Information Systems Software
The computer programmes used to store, retrieve, process, and analyze the company’s financial data are considered the software component of an AIS.
Effective AIS software must focus on quality, dependability, and security. Managers must have access to high-quality information if they are to make decisions that are best for the organization. AIS software applications can be modified to fit the particular requirements of various business types.
IT Infrastructure
The hardware that powers the accounting information system is simply referred to by the fancy name “information technology infrastructure.” The majority of these hardware items, which can include the following, are necessities for any business:
- Computers
- Mobile gadgets
- Servers
- Printers
- Surge guards
- Routers
- Storage devices
- An additional power source
The hardware used for an AIS must be compatible with the specified software, which is perhaps the most significant requirement. In an ideal world, it would not only be compatible but also optimal, as a slow system will be considerably less useful than one that is quick.
Internal Controls
The security precautions an AIS has in place to safeguard sensitive data are called internal controls. These might range from straightforward passwords to intricate biometric identification. Fingerprints, voice, and facial recognition are a few examples of non-changing human features that may be stored as part of biometric security systems.
Internal controls are necessary for an AIS to guard against unwanted computer access and to restrict access to authorized users, which may include some internal users. Additionally, it must stop users who are only permitted access to certain sections of the system from accessing unlawful files.
These six parts of an AIS all work together to assist important personnel in gathering, managing, processing, retrieving, and reporting their financial data. A successful business requires an effective and accurate accounting information system that is well-developed and maintained.