Information Accounting
Accounting Information System (AIS) involves collection, recording and processing financial or accounting information. This information collected and stored are used by the management for their decision making process. Unlike the traditional accounting, AIS follows a computer-based method that tracks the accounting activities in a company with the usage and support of information technology.
Accounting Information System (AIS) involves collection, recording and processing financial or accounting information. This information collected and stored are used by the management for their decision making process. Unlike the traditional accounting, AIS follows a computer-based method that tracks the accounting activities in a company with the usage and support of information technology.
Once the information is collected and recorded in the computer system, as and when required, the results of the accounting activities are generated in the form of a report. Managers use these statistical reports for planning and decision making purposes. Statistical reports generated from accounting information system are useful for both internal and external stakeholders. The internal stakeholders like managers can take decision on how to carry out business operations. The external stakeholders like customers, investors, suppliers etc evaluate the financial reports to make their purchase or investment decisions. The major benefit of accounting information system and its computer based tracking method is that it is automatic. There is no manual entry involved in tracking accounting activities in this accounting system. Thus, there will be no possibilities of any errors. AIS help in advanced data modeling and data mining. The process of accounting information system involves the extraction of data from the database, process the data, and then convert the data summary as information. The internal and external stakeholders to analyse the information access this information. This will enable them to make appropriate decisions.
However, it is required that these reports are generated on time so that the data accessed by the decision makers or managers are relevant, accurate and not outdated. Thus, the analysis made based on the report will be effective. AIS reports ensure consolidation of data so that the managers are not required to go through numerous transactions to interpret the actual financial position of the company. However, for larger organizations, due to large number of daily transactions, the statistical reports generated through AIS may take several numbers of days or couple of weeks. This will be a time consuming process for larger companies. Still, the reports will be accurate and relevant.
