An accounting information systems (AIS) is a structure that a business/ organization uses to collect, manage, retrieve, report, and store its financial data so that it can be used by professionals like accountants, managers, business analyst, consultants, auditors, tax agencies, regulators and chief financial officers.
Exceptionally coached accountants work extensively with Accounting information systems to secure that the highest level of accuracy is a company/organization’s financial transactions and record-keeping, as well as make a financial detail readily available to those who lawfully need to access it all while keeping data intact and secure.
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An accounting information system is designed to support all the accounting functions and activities, including auditing, managerial accounting, financial accounting, and reporting and taxation.
Roles of an Accounting Information System
Roles of an Accounting Information System are as follows:-
- Systematic and Practical Data Collection– Earlier, it is done through the manual process of accounting by the managers, and they record every transition in the book. Since the establishment of the accounting information system, accountants do not need to keep their financial records’ tone. They need only a system to record all their financial data.
- Supply Information– The essential function of the account information software is to make decisions. Financial statements and reports are presented through an accounting information system, which helps the organization in the future course of action.
- Adequate Control- Accounting information software secures that the AIS data is authentic and ensures that the organization’s performed activity is according to the project objectives. It is also used in safeguarding management assets.
Features of an Accounting Information System are mentioned below:-
- Automation– Since the software handles the calculation, it reduces many time-consuming processes in the manual process.
- Efficient– AIS is a fluent way to save time and resources, while in the manual process, accountants need to manage heavy files that take much time and resources.
- Accuracy- Accounting data and calculations are done by the software only, so mathematical errors are less likely to happen in the AIS.
- Speed- By storing data in your AIS, it can reuse again and again. Even a correction case can be done in just a few seconds, and reports can be generated at an impossible speed in the manual accounting.
- Safety– Stored data in the AIS is safe. The chances of loosening data are significantly less if you regularly do a backup, while in manual accounting, data can be easily manipulated or lost.
Reliability of Accounting Information Software
The five principles which are essential to the AIS credibility are as follows:-
- Privacy– It helps in the collection and storage of data rightfully.
- Processing Integrity- This helps in completely processing the data timely, accurately with proper authorization.
- Availability– AIS systems meet the contractual ad operational obligations.
- Security- It can program so that limited no people can access the financial records.
- Confidentiality– Any unauthorized person cannot access the restricted data.
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