Accounting information system

From Wikipedia, the free encyclopedia An accounting information system (AIS) is a system of collection, storage and processing of financial and accounting data that is used by decision makers. An accounting information system is generally a computer-based method for tracking accounting activity in conjunction with information technology resources. The resulting statistical reports can be used internally by management or externally by other interested parties including investors, creditors and tax authorities. The actual physical devices and systems that allows the AIS to operate and perform its functions 1. 2. Internal controls and security measures: what is implemented to safeguard the data Model Base Management

Initially, accounting information systems were predominantly developed in-house as legacy systems. Such solutions were difficult to develop and expensive to maintain. Today, accounting information systems are more commonly sold as prebuilt software packages from vendors such as Microsoft, Sage Group, SAP and Oracle where it is configured and customized to match the organizations business processes. As the need for connectivity and consolidation between other business systems increased, accounting information systems were merged with larger, more centralized systems known as enterprise resource planning (ERP). Before, with separate applications to manage different business functions, organizations had to develop complex interfaces for the systems to communicate with each other. In ERP, a system such as accounting information system is built as a module integrated into a suite of applications that can include manufacturing, supply chain, human resources. These modules are integrated together and are able to access the same data and execute complex business processes. With the ubiquity of ERP for businesses, the term accounting information system has become much less about pure accounting (financial or managerial) and more about tracking processes across all domains of business. Software architecture of a modern AIS A modern AIS typically follows a multitier architecture separating the presentation to the user, application processing and data management in distinct layers. The presentation layer manages how the information is displayed to and viewed by functional users of the system (through mobile devices, web browsers or client application). The entire system is backed by a centralized database that stores all of the data. This can include transactional data generated from the core business processes (purchasing, inventory, accounting) or static, master data that is referenced when processing data (employee and customer account records and configuration settings). As transaction occur, the data is collected from the business events and stored into the systems database where it can be retrieved and processed into information that is useful for making decisions. The application layer retrieves the raw data held in the database layer, processes it based on the configured business logic and passes it onto the presentation layer to display to the users. For example, consider the accounts payable department when processing an invoice. With an accounting information system, an accounts payable clerk enters the invoice, provided by a vendor, into the system where it is then stored in the database. When goods from the vendor are received, a receipt is created and also entered into the AIS.

Before the accounts payable department pays the vendor, the systems application processing tier performs a three-way matching where it automatically matches the amounts on the invoice against the amounts on the receipt and the initial purchase order. Once the match is complete, an email is sent to an accounts payable manager for approval. From here a voucher can be created and the vendor can ultimately be paid.aa [edit]Advantages and implications of AIS A big advantage of computer-based accounting information systems is that they automate and streamline reporting.[1] Reporting is major tool for organizations to accurately see summarized, timely information used for decision-making and financial reporting. The accounting information system pulls data from the centralized database, processes and transforms it and ultimately generates a summary of that data as information that can now be easily consumed and analyzed by business analysts, managers or other decision makers. These systems must ensure that the reports are timely so that decision-makers are not acting on old, irrelevant information and, rather, able to act quickly and effectively based on report results. Consolidation is one of the hallmarks of reporting as people do not have to look through an enormous number of transactions. For instance, at the end of the month, a financial accountant consolidates all the paid vouchers by running a report on the system. The systems application layer provides a report with the total amount paid to its vendors for that particular month. With large corporations that generate large volumes of transactional data, running reports with even an AIS can take days or even weeks. After the wave of corporate scandals from large companies such as Tyco International, Enron and WorldCom, major emphasis was put on enforcing public companies to implement strong internal controls into their transaction-based systems. This was made into law with the passage of the Sarbanes Oxley Act of 2002 which stipulated that companies must generate an internal control report stating who is responsible for an organizations internal control structure and outlines the overall effectiveness of these controls.[2] Since most of these scandals were rooted in the companies' accounting practices, much of the emphasis of Sarbanes Oxley was put on computer-based accounting information systems. Today, AIS vendors tout their governance, risk management, and compliance features to ensure business processes are robust and protected and the organization's assets (including data) are secured. References 1. 2. ^ http://www.allbusiness.com/accounting/3504565-1.html ^ http://www.coso.org/

Sample Questions on Oral Defense Sample of Individual Questions This is only sample question on your oral defenseon your documentation. This will help you to predict further question about your documentation that your panelist will ask. This will help you to build self confidence and answer the panelist question easily. Abstract. Whats it about? Contents listing. Are all the pieces there? Is the argument clear? Review of literature. To what extent is thereview relevant to the research study? Has the candidate slipped into Here is all I know about x? Is there evidence of critical appraisal of other work, or is the review just

descriptive? How well has the candidate mastered the technical or theoretical literature? Does the candidate make the links between thereview and his or her methodology explicit? Is there a summary of the essential features of other work as it relates to this study? Methodology. What precautions were taken against likely sources of bias? What are the limitations in the methodology? Is the candidate aware of them? Is the methodology for data collection appropriate? Are the techniques used for analysis appropriate? In the circumstances, has the best methodology been chosen? Has the candidate given an adequate justification to the methodology? Presentation of results. Have the hypotheses in fact been tested? Do the solutions obtained relate to the questions posed? Is the level and form of analysis appropriate for the data? Could the presentation of the results been made clearer? Are patterns and trends in the results accurately identified and summarized? Does the software appear to work satisfactorily? Discussion and Conclusions. What was achieved? Do I believe it? Is the candidate aware of possible limits to confidence/reliability/validity of the work? Have the main points to emerge from the results been picked up for discussion? Are there links made to the literature? Is there evidence of attempts at theory building or reconceptualisation of problems? Are there speculations? Are they well grounded in the results? Bibliography. Does it cite the right things? Has it been published already? Most examiners scan your list of references looking for the important works in the field. Truth be known, most examiners also look for their own publications if they are in the topic area of the thesis. http://thesisworks.com/2011/thesis-guide/sample-questions-oral-defense/ A business (also known as enterprise or firm) is an organization engaged in the trade of goods, services, or both to consumers.[1] Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-forprofit or state-owned. A business owned by multiple individuals may be referred to as a company, although that term also has a more precise meaning. The etymology of "business" relates to the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. The term "business" has at least three usages, depending on the scope the singular usage to mean a particular organization; the generalized usage to refer to a particular market sector, "the music business" and compound forms such as agribusiness; and the broadest meaning, which encompasses all activity by the community of suppliers of goods and services. However, the exact definition of business, like much else in the philosophy of business, is a matter of debate and complexity of meanings. ^ Sullivan, arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. p. 29. ISBN 0-13-063085-3. Types of Business Enterprise There are several types of business enterprises an investor can choose from in establishing operations in the Philippines. Organized under Philippine Laws 1. Sole Proprietorship - is a business structure owned by an individual who has full control/authority of its own and owns all the assets, personally owes answers all liabilities or suffers all losses but enjoys all the profits to the exclusion of others. A sole proprietorship must apply for a business name and be registered with the DTI-National Capital Region (NCR). In the provinces, application may be filed with the DTI regional/provincial offices. 2. Partnership - Under the Civil Code of the Philippines, a partnership is treated as juridical person, having a separate legal personality from that of its members. Partnerships may either be general partnerships, where the partners have unlimited liability for the debts and obligation of the partnership, or limited partnerships, where one or more general partners have unlimited liability and the limited partners have liability only up to the amount of their capital contributions. It consists of two or more partners. A partnership with more than P3,000 capital must register with the Securities and Exchange Commission (SEC).

3. Corporation - is composed of juridical persons established under the Corporation Code and regulated by the SEC with a personality separate and distinct from that of its stockholders. The liability of the shareholders of a corporation is limited to the amount of their share capital. It consists of at least five to 15 incorporators, each of whom must hold at least one share and must be registered with the SEC. Minimum paid up capital is P5,000. A corporation can either be stock or non-stock company regardless of nationality. Such company, if 60% Filipino-40% foreign-owned, is considered a Filipino corporation; If more than 40% foreignowned, it is considered a domestic foreign-owned corporation.

Introduction To Accounting Information Systems July 28 2011| Filed Under Accounting, Business, Professional Education An accounting information system (AIS) is a structure that a business uses to collect, store, manage, process, retrieve and report its financial data so that it can be used by accountants, consultants, business analysts, managers, chief financial officers (CFOs), auditors and regulatory and tax agencies. In particular, specially trained accountants work wit AIS to ensure the highest level of accuracy in a company's financial transactions and recordkeeping and to make financ data easily available to those who legitimately need access to it, all while keeping data intact and secure. This article w describe the primary components of an AIS and some of its real-life applications. TUTORIAL: Financial Statements

Components of an Accounting Information System Accounting information systems generally consist of six main parts: people, procedures and instructions, data, software information technology infrastructure and internal controls. Let's look at each component in detail.

People The people in an AIS are simply the system users. Professionals who may need to use an organization's AIS include accountants, consultants, business analysts, managers, chief financial officers and auditors. (Learn more in What does chief financial officer Do?) An AIS helps the different departments within a company work together. For example, management can establish sales goals for which staff can then order the appropriate amount of inventory. The inventory order notifies the accounting department of a new payable. When sales are made, sales people can enter customer orders, accounting can invoice customers, the warehouse can assemble the order, the shipping department can send it off, and the accounting department gets notified of a new receivable. The customer service department can then track customer shipments and the system can create sales reports for management. Managers can also see inventory costs, shipping costs, manufacturing costs and so on.

With a well-designed AIS, everyone within an organization who is authorized to do so can access the same system and get the same information. An AIS also simplifies getting information to people outside of the organization when necessa For example, consultants might use the information in an AIS to analyze the effectiveness of the company's pricing structure by looking at cost data, sales data and revenue. Also, auditors can use the data to assess a company's intern controls, financial condition and compliance with the Sarbanes-Oxley Act (SOX). (Find out more on accounting regulations; check out Financial History: The Rise of Modern Accounting.)

The AIS should be designed to meet the needs of the people who will be using it. The system should also be easy to us and should improve, not hinder, efficiency.

Procedure and Instructions The procedure and instructions of an AIS are the methods it uses for collecting, storing, retrieving and processing data. These methods will be both manual and automated, and the data can come from both internal sources (e.g., employee and external sources (e.g., customers' online orders). Procedures and instructions will be coded into AIS software; they should also be "coded" into employees through documentation and training. Procedures and instructions must be follow consistently to be effective. To store information, an AIS must have a database structure such as structured query language (SQL), a computer language commonly used for databases. The AIS will also need various input screens for the different types of system users and different types of data entry, as well as different output formats to meet the needs of different users and different types of information. (Does a job as a financial sleuth sound interesting to you? Learn more in Uncovering A Career In Forensic Accounting.)

Data The data contained in an AIS is all the financial information pertinent to the organization's business practices. Any business data that impacts the company's finances should go into an AIS. The data included in an AIS will depend on t nature of the business, but it may consist of the following: sales orders customer billing statements sales analysis reports purchase requisitions vendor invoices check registers general ledger inventory data payroll information timekeeping tax information This data can then be used to prepare accounting statements and reports such as accounts receivable aging, depreciation/amortization schedules, trial balance, profit and loss, and so on. Having all this data in one place - i the AIS - facilitates a business's recordkeeping, reporting, analysis, auditing and decision-making activities. For the dat to be useful, it must be complete, correct and relevant.

On the other hand, examples of data that would not go into an AIS include memos, correspondence, presentations and manuals. These documents might have a tangential relationship to the company's finances, but excluding the standard footnotes, they are not really part of the company's financial recordkeeping.

Software The software component of an AIS is the computer programs used to store, retrieve, process and analyze the company financial data. Before there were computers, AISs were manual, paper-based systems, but today, most companies are using computer software as the basis of the AIS. Small businesses might use Intuit's Quickbooks, Sage Peachtree Accounting, or Microsoft's Small Business Accounting but there are many others. Small to mid-sized businesses might use SAP's Business One. Mid-sized and large businesses might use Microsoft's Dynamics GP, Sage Group's MAS 90 MAS 200, Oracle's Peoplesoft or Epicor Financial Management. Quality, reliability and security are key components of effective AIS software. Managers rely on the information it output to make decisions for the company, and they need high-quality information to make sound decisions. AIS software programs can be customized to meet the unique needs of different types of businesses. If an existing program does not meet a company's needs, software can also be developed in-house with substantial input from end users or can be developed by a third-party company specifically for the organization. The system could even be outsourced to a specialized company. For publicly traded companies, no matter what software program and customization options the business chooses, Sarbanes-Oxley regulations will dictate the structure of the AIS to some extent. This is because SOX regulations establish internal controls and auditing procedures that public companies must comply with.

Information Technology Infrastructure Information technology infrastructure is just a fancy name for the hardware used to operate the accounting information system. Most of these hardware items are things a business would need to have anyway - they include personal computers, servers, printers, surge protectors, routers, storage media, and possibly a backup power supply. In addition cost, factors to consider in selecting hardware include speed, storage capability and whether it can be expanded and upgraded. (Thinking about becoming an accountant? Read, Shopping For An Accounting Certification.)

Perhaps most importantly, the hardware selected for an AIS must be compatible with the intended software. Ideally, it would be not just compatible, but optimal, a clunky system will be much less helpful than a speedy one. One way businesses can easily meet hardware and software compatibility requirements is by purchasing a turnkey system that includes both the hardware and the software that the business needs. Purchasing a turnkey system means, theoreticall that the business will get an optimal combination of hardware and software for its AIS.

A good AIS should also include a plan for maintaining, servicing, replacing and upgrading components of the hardware system, as well as a plan for the disposal of broken and outdated hardware so that sensitive data is completely destroy

Internal Controls The internal controls of an AIS are the security measures it contains to protect sensitive data. These can be as simple a passwords or as complex as biometric identification. An AIS must have internal controls to protect against unauthorized computer access and to limit access to authorized users which includes some users inside the company. It must also prevent unauthorized file access by individuals who are allowed to access only select parts of the system. (For more on personal safety, check out Protecting Your Financial Documents From Disaster.)

An AIS contains confidential information belonging not just to the company but also to its employees and customers. Th data may include Social Security numbers, salary information, credit card numbers, and so on. All of the data in an AIS should be encrypted, and access to the system should be logged and surveilled. System activity should be traceable as well.

An AIS also needs internal controls that protect it from computer viruses, hackers and other internal and external threat to network security[PC4] . Furthermore, it must be protected from natural disasters and power surges that can cause da loss. (Learn how you can get a job in this field, read A Guide To Careers In Accounting Information Systems.)

AISs In Real Life We've seen how a well-designed AIS allows a business to run smoothly on a day-to-day basis or hinders its operation i the system is poorly designed. A third use for an AIS is that when a business is in trouble, the data in its AIS can be use to uncover the story of what went wrong. The cases of WorldCom and Lehman Brothers provide two examples.

In 2002, WorldCom internal auditors Eugene Morse and Cynthia Cooper used the company's AIS to uncover $4 billion fraudulent expense allocations and other accounting entries. Their investigation led to the termination of CFO Scott Sullivan as well as new legislation. (section 404 of the Sarbanes-Oxley Act, which regulates companies' internal financi controls and procedures. (Does a job as a financial sleuth sound interesting to you? Learn more in Uncovering A Caree In Forensic Accounting.)

When investigating the causes of Lehman's collapse, a review of its AIS and other data systems was a key component along with document collection and review and witness interviews. The search for the causes of the company's failure "required an extensive investigation and review of Lehman's operating, trading, valuation, financial, accounting and oth data systems," according to the 2,200-page, nine-volume examiner's report. Lehman's systems provide an example of how an AIS should not be structured. Examiner Anton R. Valukas's report states, "At the time of its bankruptcy filing, Lehman maintained a patchwork of over 2,600 software systems and applications ... Many of Lehman's systems were arcane, outdated or non-standard."

The examiner decided to focus his efforts on the 96 systems that appeared most relevant, and the examination required training, study and trial and error just to learn how to use the systems. (Also check out Case Study: The Collapse of Lehman Brothers, and An Inside Look At Internal Auditors.) Valukas's report also noted, "Lehman's systems were highly interdependent, but their relationships were difficult to decipher and not well documented. It took extraordinary effort to untangle these systems to obtain the necessary information." Conclusion The six components of an AIS all work together to help key employees collect, store, manage, process, retrieve, and report their financial data. Having a well-developed and maintained accounting information system that is efficient and accurate is an indispensable component of a successful business. http://www.investopedia.com/articles/professionaleducation/11/accounting-information-systems.asp#axzz2D3d6EJqO Taxation Although some individuals still complete their income tax returns manually, many now

use computer programs such as TurboTax for this task. Like spreadsheets, tax preparation software is an example of an AIS that enables its users to create and store copies of trial tax returns, examine the consequences of alternate tax strategies, print specic portions of a return, and even transmit complete copies of a state or federal tax return to the appropriate government agency. Information technology can also help tax professionals research challenging tax questionsfor example, by providing access to electronic tax libraries on CDs or online that cost less and that can provide more up-to-date tax information than traditional paper-based libraries. Thus, a tax professional may subscribe to an online tax service by paying a fee for the right to access databases of tax information stored at centralized computer locations. Online services or CD-ROMs can provide tax researchers with databases of federal and state tax laws, tax court rulings, court decisions, and technical advice. http://ebooks.narotama.ac.id/files/Core%20Concepts%20of%20Accounting%20Information%20Systems/CHAPTER%2 %20Accounting%20Information%20Systems%20and%20the%20Accountant.pdf WHAT ARE ACCOUNTING INFORMATION SYSTEMS? What do the following have in common: (1) a shoebox lled with a lawyers expense receipts, (2) the monthly payroll spreadsheet in the computer of an auto-repair shop, (3) the Peachtree accounting system for a small chain of dry-cleaning stores, and (4) the ERP (Enterprise Resource Planning) system of a large manufacturer? The answer is that they are all examples of accounting information systems. How can such a wide range of accounting applications each qualify as an accounting information system? The answer is that this is the essence of what AISs arecollections of raw and stored data (that together typically serve as inputs), processing methods (usually called procedures), and information (outputs) that serve useful accounting purposes. Do such systems have to be computerized? The rst examplethe shoeboxsuggests that they do not. Can they be complicated? The last examplean ERP systemillustrates one that is. Accounting Information SystemsA Denition Figure 1-1 suggests that accounting information systems (AISs) stand at the crossroads of two disciplines: accounting and information systems. Thus, the study of AISs is often viewed as the study of computerized accounting systems. But because we cannot dene CHAPTER 1 / Accounting Information Systems and the Accountant 5 FIGURE 1-1 Accounting information systems exists at the intersection of two important disciplines: (1) accounting and (2) information systems. an AIS by its size; it is better to dene it by what it does. This latter approach leads us to the following denition that we will use as a model in this book: Denition: An accounting information system is a collection of data and processing procedures that creates needed information for its users. Let us examine in greater detail what this denition really means. For our discussion, well examine each of the words in the term accounting information systems separately http://ebooks.narotama.ac.id/files/Core%20Concepts%20of%20Accounting%20Information%20Systems/CHAP TER%201%20Accounting%20Information%20Systems%20and%20the%20Accountant.pdf How to use an accounting information system An accounting information system is a computer program or system which performs accounting and payroll functions. Accounting information systems can be used to record and process information on tax, payroll and any accounting related data. By Juddie In order to process information, the first stage is recording or entering data into the accounting software. Data can be anything from profits to payroll information. The system will process the data entered and store the information in different files where it will be accessed whenever needed. After processing the data the information will be used to do a variety of things. Tax records for example will be used when tax filing is done. The information can also be shared between different branches. Accounting information systems enable businesses to forecast sales, losses and prepare comprehensive budgets. Tailor made information systems

An accounting information software therefore records and processes accounting information. Businesses can have information systems tailor made for their specific needs. The accounting information system will have a username and password and only people who have been authorised to use it can access the information. There are certain procedures specific to accounting information systems; companies therefore require their staff to go for training before they use these systems. Functions of an accounting information system Once you enter your information, the system will do the payroll, produce periodical reports, inventory tracking and management, creates invoices and receipts and perform a lot of other accounting functions. All you need to do is enter the required information and everything will be automatically calculated and processed. Using accounting information can increase profitability and productivity. Different companies and industries use different accounting systems and one good thing about them is the fact that they are easy to use. Accounting information systems save time and money An accounting information system can save money and time for the business, there will not be any need of employing the services of an accountant. Preparing financial reports and statements is also made easier with the use of an accounting information system. Every accounting detail is recorded in these systems. Expenses, sales and profits can be recorded for future use. Audits become easy to handle if all transactions are recorded properly in an accounting system. http://en.overblog.com/How_to_use_an_accounting_information_system-1228321766-art184881.html Defi niti make or become better on: Syn advance, ameliorate, amend, augment, better,boost, civilize, come around, convalesc ony e,correct, cultivate, develop, doctor up, edit,elevate, emend, enhance, gain ground, h ms: elp,increase, lift, look up, make strides, meliorate,mend, perk up, pick up*, polish, progress,promote, purify, raise, rally, recover, rectify,recuperate, refine, reform, revamp, revise, rise,set right, shape up, sharpen, skyrocket,straighten out, t ake off, touch up, turn thecorner, update, upgrade