ACCOUNTING INFORMATION SYSTEM; WHAT IT IS AND WHAT IT IS NOT
Accounting information system (AIS) is one aspect of accounting that has been greatly misunderstood and misinterpreted. I am writing this article because of the experience I had in one of the seminars I attended recently. I won’t mention the name of the organizers of the seminar so that they won’t feel hurt (egotistically). But, I have e-mailed them the link to this post so that such misinformation will not come from them again.
The theme of the seminar is “Computer: the solid rock of AIS”. All what they were saying there was that AIS MUST be a computerized system. This is not true; AIS can either be computerized or manual.
WHAT IS ACCOUNTING INFORMATION SYSTEM?
AIS is a specialized subsystem of the IS (information system) as a whole whose primary aim is to convert data from internal and external sources into information related to the financial aspects of business events, in an integrated IS, and to communicate that information, in a suitable format, to managers at all levels in all functions and capacities to enable them make timely and effective decision for planning, directing and controlling the activities that they are made accountable for.
Notice that the medium (computerized or manual) of collecting, processing and storing the information is not emphasized. Rather, emphases were laid on the use of information.
CHARACTERISTICS OF ACCOUNTING INFORMATION SYSTEM
Because an accounting information system is a subsystem in the information system, its characteristics will be the same with that of information system which are:
effectiveness, efficiency, confidentiality, integrity, availability, compliance, completeness, relevancy, reliability of information, neutrality/freedom from bias, comparability, timeliness, predictive value, sufficiency of content, detailed, confidence in source, understandability and simplicity.
Note however that good AIS should have the ability to resolve conflicts that sometimes exist among information qualities.
WORKING TOOLS OF AIS
For an accounting information system to achieve its objectives which is to provide management with well filtered information to assist in decision making, AIS must incorporate the following components as its working tools:
Technology, database, reporting criteria, control, business operation, management decision making, events processing, security, systems development and & operation, communications, accounting & auditing principles, and tax laws.
The above elements reveal that for you to be successful in the design, use and audit of AIS as an accountant, your skills must transcend the processing of financial data.
Again, I want to repeat that AIS is not a computer processing system like the organizers of that seminar told us.
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