An Introduction To Accounting

An Introduction To Accounting AIS is a system that collects and store accounting data, after that process the data into useful information used by the decision makers (internal and external users). The information produced by AIS can help decision maker to manage their business more efficiently strategically. However, accounting information system can be manual using the traditional way of recording business transactions manually using paper-and-pen. Today the term AIS referred to as compound computer base system that merges the ability of information technology together with traditional accounting principles and practices. Accounting information systems consist of six components: People: users who work on the systems Procedures and instructions: the process of collecting, managing and storing the data Data: data which is related to the company and its business. Software: application that processes the business data Information technology infrastructure: the physical devices like personal computer and systems In ternal controls and security measures: which is employed to secure the data In the beginning, AISs were mainly developed â€Å"in-house† as legacy systems. These kinds of solutions are difficult to develop and require a high cost to maintain. In the present day, AIS are sold as prebuilt software packages from vendors. The most popular vendors for AIS are Microsoft, Sage, Group, SAP and Oracle where they customize the software to mach organizations’ business processes. Modern AIS follows a multitier architecture, which separate the application processing and data management in different layer from the presentation to the user. The presentation layer manages how the information is displayed and used by functional users of the system (through client application, web browser or mobile device). All the data in the system is stored and packed by a centralized database. this includes transactional data generated from the core business processes such as inventory, purchases et c. when a transaction occur from business event the data is collected and stored into the system database where it can be processed into useful information used by decision makers. A big benefit from computerize accounting information system is that they automate and make financial reporting more efficient. Accurate and summarized, timely information is a major tool for organizations decision making and financial reporting. The accounting information system pull imports data from the system database, process and transform it and eventually produces information and reports which can be easily consumed and analyzed by the users, managers and decision makers. These systems are required to ensure that the reports are timely and relevant so that decision makers are able to quickly and efficiently base on the information provided in the reports. Consolidation is one of the greatest characteristic of reporting as user does not have to go through a massive number of transactions. For exampl e, at the end of the accounting period an accountant consolidates all payments by running a report on the system. The system application layer reclaims the data stored in the system database and produces a report with the total payments made to the vendors for that particular period. With large corporations which have huge volume of transactional data, generating a report without AIS can take day or even weeks.