An accounting information system (AIS) is the structure through which business keep

their financial records in order. It involves the collection, storage, processing,

and management of a company’s finances.

An AIS is a key part in streamlining the distribution financial information to

shareholders and executives without compromising security. It increases fraud
detection and can help businesses make sure their finances are running smoothly.
It’s a vital tool in guiding managers to make the best decisions regarding the
overall health of their business.

In today’s technology driven economy, most accounting information systems are

computer based, though the process can be done manually by smaller businesses.

Functions
Every accounting information system has three basic functions that it must be able
to perform.

An AIS must be able to collect and store data about a company’s business
transactions. This should include capturing financial data from source information,
recording transactional activities, and converting financial data into records and
ledgers.An AIS should be able to provide accurate and useful financial information
to employees, executive, and stakeholders for the purpose of making prudent
business decisions.An AIS should make sure to have a system in place to effectively
collect and convert financial data into actionable information.
These functions provide a framework for businesses to make sure their information
systems are up to par. An AIS that doesn’t work effectively can be an even larger
threat to the overall security of a company and its customers than having no
accounting information system at all.