ACCOUNTING INFORMATION SYSTEM

 COLLECTS AND PROCESSES TRANSACTION DATA

 COMMUNICATES FINANCIAL INFORMATION TO DECISION MAKERS
 INCLUDES EACH OF THE STEPS IN THE ACCOUNTING CYLCE
COMPONENTS OF AIS

 PEOPLE
 PROCEDURES
 DATA
 SOFTWARE
 INFORMATION TECHNOLOGY
AIS CYCLE

INPUT - PROCESS – OUTPUT –

Source Double entry Financial
documents bookkeeping Statements
BASIC CONCEPTS OF AIS
COMPUTERIZED
• Large business organization use
this
• Works are done with the help
software
• Chances of mistakes are less
MANUAL
• Generally used in small
organizations
• Works are done manually
• More chances of doing mistakes
BASIC FUNCTIONS OF AIS

 It collects and stores data about activities and transactions

 It processes data into information that is useful for making
decisions
 It provides adequate controls to safeguard the organization’s
assets
BASIC FUNCTIONS

 DATA PROCESSING CONSIST OF:

I. DATA INPUT
II. DATA STORAGE
III. DATA PROCESSING
IV. INFORMATION OUTPUT
BASIC FUNCTIONS

 OUTPUT CAN BE
I. FINANCIAL STATEMENTS
II. MANAGERIAL REPORTS
III. OTHER REPORTS
BASIC FUNCTIONS

 PROVIDE ADEQUATE INTERNAL CONTROLS

I. ENSURE THAT THE INFORMATION IS RELIABLE
II. ENSURE THAT BUSINESS ACTIVITIES ARE PERFORMED EFFICIENTLY
III. SAFEGUARD ORGANIZATIONAL ASSETS
SUBSYSTEMS IN THE AIS

FINANCING EXPENDITURE HUMAN

CYCLE CYCLE RESOURCES

PRODUCTION
REVENUE CYCLE
CYCLE

General Ledger & Reporting System

FACTORS INFLUENCING DESIGN OF THE
AIS
 ORGANIZATION STRUCTURE
 STRATEGY
 INFORMATION TECHNOLOGY
 REGULATORY
 OTHER EXTERNAL FACTORS
THE ACCOUNTING PROCESS
 The accounting process starts when an economic event is recognized by AIS,
which records this event as an accounting transaction.
BENEFITS OF AIS

 Businesses use accounting information systems to make their accounting

activities easier, quicker, and more accurate
 Allows to save time of employees and avoid mistakes
 Implementation of such system requires investment and time to be spent on
the implementation, however future benefits are much higher that the
expenditures incurred.
 Helps the company forecast sales, profits and loss
 Make it easier to compile financial data for use in taxes, payroll, and other
bookkeeping requirements