Accounting Information Systems Overview

Accounting Information Systems (AIS)

• An AIS is a system used by businesses to collect, store, manage, process, retrieve, and report financial data.
• It's used by various professionals, including accountants, consultants, managers, CFOs, auditors, and regulators.
• AIS helps different departments within a company collaborate.
• AIS utilizes hardware and software to efficiently store and retrieve data.
• Internal and external controls are crucial for protecting sensitive data.

Functions of an AIS

• Data Collection & Storage: Collects financial transaction data from source documents, records in journals, and posts to ledgers.
• Information Provision: Generates reports and financial statements for decision-making.
• Data Accuracy & Controls: Ensures accurate data recording and processing via established controls.

Parts of an AIS

• People: Accountants, managers, business analysts.
• Procedures: Methods for collecting, storing, retrieving, and processing data.
• Data: All information within the system.
• Software: Computer programs for data processing.
• IT Infrastructure: Hardware for operating the system.
• Internal Controls: Security measures to protect data.

How an AIS is Used

• Contains data on revenue, expenses, customer/employee information, and taxes.
• Includes specific data like sales orders, purchase orders, invoices, inventory, payroll, and financial statements.
• Requires a database structure with query language for data manipulation.
• Often has high security measures against cyber threats.

Outputs of an AIS

• Generates reports like accounts receivable aging, depreciation schedules, and trial balances.
• Also includes customer lists, taxation calculations, and inventory levels.
• Does not include general correspondences, memos, or presentations.

Benefits of an AIS

• Interdepartmental Interfacing: Information shared across departments (e.g., sales budget to inventory management).