Accountant’s Role in Information Intensive Organizations

This presentation discusses the role of accountants in information intensive organizations and their responsibilities in analyzing financial and operating performances. It also explores the benefits of information technology to accounting information systems and the components of AIS. Additionally, it highlights the value of AIS in organizations and its impact on the effectiveness and efficiency of the entity’s value chain. The presentation concludes with a discussion on the characteristics of useful information and the basic tasks performed by AIS.

Accounting
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Question 1
Accountant’s role in today’s information intensive
organization
The accountant is responsible for the staff function in any of the
entity as they are not included in business division of revenue
generation. However, they play important role under the
organization those are information intensive to analyse the operating
as well as financial performances of companies. Further the complex
structure of business of the entities is needed to be monitored by
different departments in addition to different viewpoints. Apart from
that, the accountant delivers financial data management through
maintaining and collecting the accounting data. These type of
recorded data helps in evaluating the operating as well as financial
efficiency of entity. This analysis further assists in making business
related decisions by the managers. Information intensive entities
require capturing the right information and sharing same with right
people at the right time rather than just gathering additional
information. The accountant is responsible for managing the
information in such way that the management may find right

Question 2
Providing information to management through accounting
information system (AIS)
AIS include information associated with accounting transactions and
operating expenses of business. Further, accountants maintain the
records regarding the capital expenses and the estimation of the
return on investment. Apart from that, costing information is
generated from the accountant to measure the profit margin or the
efficiency of any division that is making profit. Hence, AIS is considered
as crucial while making the decisions as it delivers data regarding
operational efficiency, cost, cash flows, capital expenses, cost if the
capital and requirement of the working capital. Management may take
capital budgeting related decisions and other decisions like value
addition, pricing, human resource management and inventory control.
AIS application is dependent on business transaction data to gather
information associated with operation like operating efficiency,
inventory management, control of the cash flows and product pricing.
Accumulated information assists the management in taking decisions

Question 3
Three benefits of the information technology to AIS
Benefits of information technology to AIS are as follows –
Providing system for information storage – it is the basis application
for information systems that delivers data for AIS for the purpose of
analysis. Further, it is used for safeguarding AIS of the entity as the
information systems include valuable as well as significant financial
and accounting related information of the business. Further, the
information technology offers different tools and methods for
information security like systems for password protection and
biometric devices.
Helping with the decision making tool – this process is aimed with
information system as the AIS accumulates data from system
Assisting in business procedure – this provides assistance with
business procedure as the information system is able to send as well
as deliver the right information to right person at right time to
significant people related with the business.

Question 4
Components of AIS
AIS includes several components like database, information system,
tools to analyse the data, receiving as well as capturing the data,
tracking system for transactions, system for operational process and
system for risk measurement. 6 major components of AIS are as
follows –
People – these are the people who operate the accounting system
software in the business
Procedures – it involves manual as well as automated procedure for
collection, storage and processing the data associated with the
entity’s economic as well as other activities.
Software – this is used for processing the data of the user
organization
Data – this is regarding the organization and the business activities
Security measures and internal control – it is used for safeguarding
the data under AIS
Infrastructure related to information technology – it involves
computer as well as the peripheral devices along with network

Question 5
AIS in adding value to organization
AIS is empowered in adding value to organization in different ways.
1st application of AIS is providing the support for decision making by
the management for the capital budgeting as well as operational
efficiency. Accounting system and the related information system
assists in gathering and evaluating the large amount of data to
measure organizational efficiency and effectiveness. Therefore, AIS
of organization delivers the management with key input at right
moment to make right decisions. These types of applications are
valuable for the sustainability of the organizations over the long term
period. Further, the business process enhances owing to AIS
application. Apart from that AIS may detect loyal customers through
finding the repeat customers in addition with understanding the
behaviours of the customers over the period.

Question 6
AIS in improving effectiveness and efficiency of entity’s value
chain
AIS can improve effectiveness and efficiency of the entity’s value chain
through delivering useful information to enhance quality of the service
and product at lowest possible cost. It can be structured for allowing
users to have direct access in the inventory system and sales order
entry system so that more work can be undertaken that is done
traditionally through marketing and administration and selling
department. It enables placing of order quickly and cutting of labour
costs in addition to creation of more values to customers for satisfying
them through fulfilling the requirements quickly.

Question 7
Characteristics of useful information
Main characteristics of the useful information are as follows –
Relevant – the information shall be associated with the user’s
responsibilities and function area and shall be able to influence the
decision making
Reliable – information shall be verifiable and accurate and shall be
consistent with fact
Complete – the information must contain all necessary facts that will
help the managers to solve the problems and decision making
procedure.
Concise – the information shall be sufficient enough and therefore
shall not cover immaterial facts
Cost effective – the information shall be created as well as
communicated at the reasonable cost.
Updated – information shall be available on time that is whenever
required and shall also be updated
Understandable – the information shall be presented in the mode
and format that can be understood by the users easily.

Question 8
AIS and the basic tasks performed by it
AIS is the structure that is used by the businesses for collecting
managing, storing, retrieving, reporting and processing the data so
that it can be used by the accountants, business analysts, consultants,
CFOs, managers, regulators, auditors and the tax agencies. It is
developed with use of the information technology that assists
managers to take different sound economic decisions for the business
though delivering necessary and relevant information related to
accounting. Basically it performs tasks related to identification,
recording and measurement of accounting information that can be
disseminated to users in form of different financial and accounting
reports. Further it is used for processing significant accounting related
transactions that is undertaken by the business organization like
purchase, inventory and sales management. For instance, it maintains
the record for all the data associated with sales made during the
particular time period like amount due, amount collected and
customer’s name.

Question 9
Determination of information’s value produced by AIS
For obtaining information from the use of AIS it involves costs for
obtaining and maintaining the AIS and the information delivered by it.
Such costs include the investments in the user’s acquiring and training
for different software and hardware on regular basis. Hence, cost of the
information is quantifiable to some extent. However, some of the
advantages of using the AIS require use of different assumptions as
well as estimates. Hence, measurements and quantification of this
information are dependent upon reliability and accuracy of such
assumption. Usefulness that is the relevance of the information for
taking decisions making will determine the value.

Question 10
Integrated enterprise system to help the business
Enterprise system is the combination of computer software and
hardware that is used by the business to run and organize the
operations. Integrated enterprise system is use of different hardware
and software systems of the computer in business process to enhance
the business’s operational efficiencies. This system assists managers
to conduct the business function in more efficient and effective way. In
the current scenario of Mom and Pop, that is a small organization that
deals with the grocery items, implementation of the integrated
enterprise system will support the growth to the great extent. It will
assist in maintaining sufficient records for the significant economic
transactions those are undertaken by business. Rather it will be cost
effective decision in implementing such system as the same will allow
manager in performing more appropriately with use of the accurate
information that is provided by such system.

Question 11
Vital functions of the accounting system servers
Vital functions of the accounting system servers are as follows –
Information supply – one of the vital functions of accounting system
server is providing the necessary information to users of such system
so that they can carry out effective decision-making procedure with
regard to the business
Processing – 2nd vital function of the accounting system server is
processing and recording the data accurately so that it will help in
extracting the useful financial and accounting information from it for
users.
Storage – most crucial function that is performed by the accounting
system server is storage of the relevant data related to the financial
activities of the entity.