Business and Management Accounting Information System

Question: Describe about the Business and Management for Accounting Information System. Answer: Accounting information system is an important system of an organization that plays vital role in accumulating and recording fiscal and accounting data and information and processing the data for generating requisite reports that are useful in effective decision making on behalf of the organization. At present an accounting information system is referred to the computerized accounting system, where apt accounting software help in tracking the accounting activities of the organization with the help of the resources from information technology[1]. There are some useful features should be in a proficient accounting information system, such as completeness, accuracy, clarity or under stability, security, timely, reliability, verifiability, comparability etc. The accounting information system of the ABC Pty Ltd may be used by the proprietor James Garfield and the employees of the ABC Pty Ltd. They are the internal users of the accounting system of the company. The proprietor James Garfield uses this system to track his profit and loss from the business and the employees can assess their performance by the accounting system. Besides this, the suppliers of the company may use the accounting system by the company. They can assess their payment information from the accounting information system of the ABC Pty Ltd company. The accountant of the company ABC Pty Ltd is hugely involved in designing the accounting information system as the accountant knows best the requirement of accounting for the company thus, the accounting system design must be conducted on the basis of the advice given by the accountant of the company. Besides this, the system is mainly used by the accountant for the purpose of keeping record of the financial events of the company and reporting the useful information to the users thus, it should be designed in supervision of the accountant of the company[2]. The company ABC Pty Ltd purchases their products from the suppliers on cash on delivery terms thus, when the company purchases the company do transact. The company does sale in both cash and credit, so the sale transaction would be either cash sale transaction or credit sales transaction. The services transaction is cash services transaction as the customers pay the services man at the time of delivery services. In order to take a decision on appropriate accounting system for the company ABC Pty Ltd the two accounting software are selected one is Intuit QuickBooks and another is MYOB. The two accounting software are widely use in Australia for the purpose of maintaining the accounting of the business organization. Both the accounting software have wide range of features that help in keeping track of the financial activities of the organization as well as these provide adequate security to the system. The price of Intuit QuickBooks is primary reason for the selection of the accounting software[3]. The accounting software charges maximum of $21/months for its premier version. The software provides unlimited invoices, and strong security features. In addition the software provides free trial of 30 days. MYOB is important software that can be used in online and offline. ATO certified solution are provided in this software it has several great feature and strong security make it most favorite accounting software in Australia. The accounting information system used by the company must have minimum security system in order to maintain the integrity of the system the system should have the features of compliance, risk assessment and treatment, security policy and planning, security framework and efficient asset management. Information access control should be there in order to protect system integrity of the accounting information system. The management is responsible of the activity of the company in order to determine the users needs, system specification and legislative needs. The management is responsible to decide what the information need of the company and as per the accounting information requirement the company selects the accounting system. The legislative need should be assess for the business and accounting need. The AASB provide the guidelines for the companies in Australia to maintain the accounting information system and the company must obey the rules of AASB. The cost benefit analysis that can be conducted by the company are as follows: Listing all the programs/project Listing details of the stakeholders Measurement of all the cost elements Estimating the outcome of benefits and cost Applying discount rate Performing discount rates The cost benefit analysis will help to analyze the cost of the company and viability of the new AIS system. In order to test the sales system of a company for accuracy and reliability the auditors mainly check the amount of sales with accounts receivable that provide the accurate idea of the individual transaction done by the company. From the sales ledger the information about the sale transaction can be gathered. The most important step to protect the data and information from loss is to back up regularly. The information technology department should set high security level. Set permission on the files and folders will protect data from external threats. The documents should be protected with password and use of encryption will help to lock down the contents of the disk drive. The company should also focus on cloud storage to back up the data[4]. The noncurrent assets are properly maintained, adequately secured and correctly recorded. The acquisition and disposals of the non current assets are authorized appropriately. The financial statements are prepared to show the fair value of the assets which helps to provide significant information to the users of the financial statements. The non current assets are depreciated appropriately and written down. The accounting information system can be implemented with the help of employees, suppliers and customers. It should be communicated to the stakeholders that it will help to increase accuracy, reliability and efficiency. The system will help to track purchase orders, sales orders, cash received, payments and due amounts. The users of the system will be benefited from the use of the system. The implementation of MYOB will help to increase accuracy and efficiency as well as keeping data from existing system. The software should be installed and registered it online. The company has to create profile and set parameters. All the transactions should be imported and historical balances. The security permissions and access need to be set by the company[5]. The sales department should record all the purchase and sales order. With the help of accounting system, sales receipt should be generated and giving to the customers. The flow of communication is very much important within the organization and the customers will be communicated in written about all the details of the products and services. The sales department should prepare invoices, bills, receipts and notes showing all the details of sales process. The company James Gaefield has pay tax on the income earned by the company during a specific period of time. The company sales its products on credit which is considered as liabilities and should be accounted as account receivable. The increase in liabilities imposes negative impact on the performance of an organization. The company has to follow rules and regulations implemented by the government while paying tax amount[6]. The sales process includes receipt of cash, generating cash receipt and recording transaction in the account information software. The transactions are recorded in journals such as sales, cash receipt and credit transactions. The accounting software will automatically calculate the values of trial balance, sales order, cash balance, bank balance, debtors balance and financial statements. The transactions are recorded in the sales journal showing all the details. The numerical data are entered into the accounting information system to keep the record of the transactions. Cash receipt or credit sales receipt are generated by the accounting information system that to be provided to the customers. The sales process should include all the details of the transaction. The documentation processes are as follows: Details of the customer Details of the product and services Warranty of the product Cash receipt Details of credit transaction Recording all the transactions The accounting information system helps to record, store and classify the financial transactions. It helps to increase the efficiency of the business performance. It increases the speed of the processing tasks. The financial statements of the company can be prepared easily showing all the details of the transactions during a specific period of time. It provides an advance storage system that can be accessed any time and collecting information from it. All the financial transactions are recorded in the accounting information system. The system documentation can be made easily accessible to the users by providing adequate training to them. The users of the system should be provided with all the details of the system and easy way to enter data. The terms and transactions should be explained to them as well as input, output and processing details. The recording of financial transactions is very much important for ABC Pty Limited. The records that need to be maintained by ABC Pty Ltd are as follows: Details of wholesale industry Details of the customers Inventory details Details of the employees Purchase order Sales order Cash receipt Cash payment Assets Liabilities Revenue References Davies, Paul A,Information Technology(Oxford University Press, 2008) Holton, R. J,Global Finance(Routledge, 2012) Paramasivan, C and T Subramanian,Financial Management(New Age International (P) Ltd., Publishers, 2009) Romney, Marshall B and Paul John Steinbart,Accounting Information Systems(Pearson Prentice Hall, 2006) Spiceland, J. David, James F Sepe and Mark Nelson,Intermediate Accounting(McGraw-Hill Irwin, 2011) Stittle, John and Bob Wearing,Financial Accounting(SAGE Publications, 2008)