Name: Cydilyn Lovitos

BIT102-5.2W
Role of Accounting Information Systems
and
its Potential contribution in Tax Computations

Introduction
The rise of the worldwide economic situation portrayed by the advancement and
development of information technology, quick changes in production procedures, aggressive
market competition, increased consumer sophistication, and unethical skimming actions by
producers has highlighted the importance of accounting information in economics and business
discussion, particularly regarding administrative efficiency (Davoren, 2019). Accounting is the
language of business because it documents and records every transaction that may be stated in
monetary terms of an entity. It is a technique and art of gathering, classifying, summarizing, and
conveying financial information essential to making economic decisions. Accounting's
performance has improved over a long period of time (Samer, 2016). The primary goal of an
accounting system is to deliver financial information such as sales, purchases, income and
expenses to an organization, but in today's modern world, accounting is beneficial in a variety of
ways. Before, accounts were kept to track a company's profit or loss, but nowadays, using an
accounting information system, may also be used to boost a company's profitability.
An accounting information system is a delivery system for accounting, just
like businesses consolidate transactions that provide information for improved analysis of
business performance. According to El Louadi stated in the paper of Soudani 2012, it is a tool
that, when integrated into the field of information and technology systems (IT), was created to
aid in the management and control of topics pertaining to a company's economic and financial
area. However, technological advancements have made it possible to generate and use
accounting data from a strategic standpoint. As a component of a business's information systems
(IS), Accounting Information Systems (AIS) are thought to aid decision-making inside
organizations and should be suited to the environment, task requirements, and structure of the
organization. A structure that a company employs to gather, keep, manage, organize, process,
access, retrieve, and report financial data is called an accounting information system. The
accountants, business analysts, consultants, managers, CFOs, auditors, and regulatory and tax
agencies may use it (Ganyam, 2019). AIS collaborates with specially trained accountants to
guarantee high accuracy in a company's recordkeeping and financial transactions, as well as to
make financial information easily accessible to those authorized or legitimate users, all while
keeping data intact and secure. It boosts the organization's efficiency and productivity indirectly.
The Accounting Information System is regarded as one of the most critical systems in
any business. Its goal is to deliver valuable information to managers at various levels. This
information aids them in carrying out their responsibilities and obligations in the areas of
planning, resource management, performance evaluation, and decision-making in an effective
and efficient manner. Accounting information systems have an important role and have potential
contribution in computation of taxes.
Discussion
The goal of an accounting information system (AIS) is to gather, store, process, and
report financial and accounting information so that managers and other interested parties may
make good business decisions. It is also a faster, easier way to access data and information. The
study Effect of Accounting Information System on Financial Performance of Firms demonstrated
the benefits of using AIS, including lower operational expenses, enhanced efficiency, increased
functionality, better external reporting and accuracy, and faster data processing. The study found
that the effects of accounting information systems on executives of government departments, or
agencies were limited to the accounting framework and operating procedures in the public sector
(Ganyam, 2019). Computer systems that can swiftly present individual transactions into financial
reports have replaced paper ledgers, manual spreadsheets, and handwritten financial statements.
This enables businesses to rapidly and simply develop specific reports for management decision-
making. It enables accountants to easily and efficiently process enormous amounts of financial
data through the accounting system. Computerized accounting methods have increased the
quality of reports sent to outside investors and stakeholders. Investors can use improved
reporting to identify whether a firm is a suitable growth investment and has the potential to be a
large company (Hla and Teru, 2015). Accounting software today, as a result of automation,
makes accounting job processes easier and faster, as well as allowing accountants to fulfill the
information demands of management. It aids in the compilation of reports by documenting and
processing business events, calculating tax, and producing tax returns (Toth, 2012). According to
the study, building an internal control system necessitates a full grasp of IT capabilities and
dangers, as well as how to apply IT to achieve an organizational control goal. Accountants, as
well as systems developers, assist management in achieving their control objectives by designing
effective control systems that take a proactive approach to eliminate, detecting, correcting, and
recovering from threats when they occur; and making it easier to build controls into systems
during the initial design stage rather than after the fact.
In addition, accounting information systems may have a potential contribution to tax
computation. It could be used to solve tax computation problems and to prevent tax evasion. The
goal of Al- Khasawneh 's study (2020) was to emphasize the critical significance of accounting
information systems in resolving tax calculation issues. The study was conducted in Egypt, and it
was discovered that the usage of accounting information systems in the Egyptian tax authority
has led to the accomplishment of high technical and administrative performance in the Egyptian
tax authority. Furthermore, the study found that applying the principle of accounting information
systems has resulted in the rise of taxpayers who have faith in the Egyptian tax authority's
performance. As a response, taxpayers pay taxes cheerfully. The study advised that more
research should be done on this topic, as well as the necessary training for assessing the
accounting information system environment in which tax authorities operate. The study titled
“The Role of Accounting Information Systems (AIS) in Combating Tax Evasion” investigates
the function of accounting information system in battling tax evasion and to provide prevention
strategies. The goal of the research is to see how an integrated accounting information system
(AIS) might help reduce tax evasion (the modern approach to accounting systems that includes
effective integration of accounting information systems and management information systems
with the following components: management AIS, central database, modern information
technology, and qualified personnel). (Al Ebbini and Al-Moumany, 2013).
Summary and Conclusion
Many entities have been using accounting information systems to automate and integrate
their company operations, efficiency, productivity, and competitive advantages. This paper
focuses on the role of accounting information systems (AIS) and their potential contribution to
tax computation. The role of an accounting information system (AIS) is to gather, store, process,
and report financial and accounting information so that managers and other interested parties
may make good business decisions. It is a faster, easier way to access data and information.
Moreover, it is also said that accounting information systems may have a potential contribution
to tax computation. It could be used to solve tax computation problems and to prevent tax
evasion. Based on the facts states above, it is given that accounting information systems have
many contributions to an organization. To fully realize these, it is important to use accounting
systems properly. Sales managers and departments in the income are expected to help their
staff/employees enhance their abilities by organizing training courses mostly in the fields of
accounting and information technology (IT). The department's AIS operating system should be
enhanced or improved and updated to expand file storage, speed up data retrieval, and eliminate
system errors. Also, it is important to emphasize that to conduct more research and study about
this topic to fully understand its use and possible contribution not only in tax computation but
also in the whole economy.
Davoren, J. (2019). The Three Fundamental Roles of Information Systems in Business.
Retrieved from Hearst Newspapers, LLC:
Retrieved April 9, 2019, from https://smallbusiness.chron.com/three-fundamental-roles-
information-systems-business-23681.html.

Samer, M. (2016). The Impact of The Effectiveness of Accounting Information Systems on Operational
Performance in Public Listed Industrial Companies in Jordan. Journal of Social Sciences, 5(3), 263-276.

Toth, Z. (2012). The current role of accounting information systems. Theory, Methodology,
Practice, 8(1), 91.
http://www.epa.hu/02600/02695/00009/pdf/EPA02695_tmp_2012_08_01_091-095.pdf
Soudani, S. N. (2012). The usefulness of an accounting information system for effective
organizational performance. International Journal of Economics and Finance, 4(5), 136-145.
https://www.researchgate.net/profile/Susan-
Teru/publication/316878475_International_Journal_of_Multidisciplinary_and_Current_Research
_Efficiency_of_Accounting_Information_System_and_Performance_Measures_-
_Literature_Review/links/59157f48aca27200fe4f0bbe/International-Journal-of-
Multidisciplinary-and-Current-Research-Efficiency-of-Accounting-Information-System-and-
Performance-Measures-Literature-Review.pdf

amos ganyam 2019 Effect of Accounting Information System on Financial Performance of

Firms: A Review of Literature
https://www.academia.edu/39835140/Effect_of_Accounting_Information_System_on_Financial
_Performance_of_Firms_A_Review_of_Literature

International Journal of Multidisciplinary and Current Research Efficiency of Accounting

Information System and Performance Measures – Literature Review Dr. Daw Hla1
and Susan Peter Teru
Article · January 2015
https://www.researchgate.net/profile/Susan-
Teru/publication/316878475_International_Journal_of_Multidisciplinary_and_Current_Research
_Efficiency_of_Accounting_Information_System_and_Performance_Measures_-
_Literature_Review/links/59157f48aca27200fe4f0bbe/International-Journal-of-
Multidisciplinary-and-Current-Research-Efficiency-of-Accounting-Information-System-and-
Performance-Measures-Literature-Review.pdf

Dr. Salam Nawaf Al-Moumany

Dr. Mohannad Mohammad Al Ebbini,
OCTOBER 2013 The Role of Accounting Information Systems (AIS) in Combating Tax
Evasion file:///C:/Users/admin/Downloads/Tax%20evasion.pdf

Reem Oqab Al- Khasawneh April 24, 2020

Al-Balqa' Applied University Role of Electronic Accounting Information Systems in Reducing
the Phenomenon of Tax Evasion in Facilities Subject to Income and Sales Tax in the Hashemite
Kingdom of Jordan
https://www.researchgate.net/publication/342660845_Role_of_Electronic_Accounting_Informati
on_Systems_in_Reducing_the_Phenomenon_of_Tax_Evasion_in_Facilities_Subject_to_Income
_and_Sales_Tax_in_the_Hashemite_Kingdom_of_Jordan