Importance and Significance of Accounting Information System (AIS)

This paper discusses the importance and significance of the AIS in the organization along with the life cycle of the transaction and the ethical issues related to it. It covers the major functions of AIS, identification of the business and transactional life cycle, documentation of the mapping of the function in the AIS, deployment of the AIS in the organization, identification of the ethical issues, and current trends.

Running head: ACCOUNTING INFORMATION SYSTEM
ACCOUNTING INFORMATION SYSTEM
Name of the Student:
Name of the University:
Author Note:

1ACCOUNTING INFORMATION SYSTEM
Executive Summery
The AIS is a system which is used for the managing of the data and information and generate the
report which will be helpful in the decision making process of the company. The AIS is available
in both manual and computerized form. The main objective of this paper is to discuss about the
importance and the significance of the AIS in the organization along with the life cycle of the
transaction and the ethical issues related to it.

2ACCOUNTING INFORMATION SYSTEM
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Objective and research methodology:.........................................................................................3
Literature Review:.......................................................................................................................4
Theoretical background:..............................................................................................................6
Major function of the AIS:..........................................................................................................7
Identification of the business and transactional life cycle:..........................................................7
Documentation of the mapping of the function in the AIS:........................................................8
Deployment of the AIS in the organization:................................................................................8
Identification of the ethical issues those can be happened regarding the use of the AIS in the
organization:................................................................................................................................8
Current trend:...............................................................................................................................9
Analysis and interpretation:.........................................................................................................9
Findings:....................................................................................................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
Appendix........................................................................................................................................14

3ACCOUNTING INFORMATION SYSTEM
Introduction
AIS is the system which is used to store and collect the data regarding the finance and the
accounting of the organization (Hassan, Nasir & Khairudin,2017). The main objective of using
the AIS in the organizations or the banks is to collect the data regarding the financial condition
and the accountings which will eventually help in the decision making system of the organization
(Mirzaey,Jamshidi& Hojatpour,2017). Apart from that proper processing of these information
will help to generate the current financial situation of the company. The AIS is a computer
generated system which uses multi-tier architecture from the processing of the data. The
application or the software has the presentation layer which allows the users to view the data
related to the statistical and financial analysis of the market and the company (Ismail &
King,2014). The data is backed up by the stored data. Stored data can be of transactional data or
the static master data. Proper security measures are taken in order to maintain the security of the
whole system (Mirzaey,Jamshidi& Hojatpour,2017). This report will evaluate different aspects
of using the AIS and its significance in the proper managing of the business(Mirzaey,Jamshidi&
Hojatpour,2017). The discussion will identify the possible challenges and the opportunities
regarding the usage of AIS and areas for improvement.
Discussion
Objective and research methodology:
The main objective in this context of discussion is regarding the usage of the AIS in the
organization and banking sector. Some of the objectives for the discussion are-
 Identification of the major functions performed by AIS.
 Identification of the business and transactional life cycle.

4ACCOUNTING INFORMATION SYSTEM
 Documentation of the mapping of the function in the AIS
 Identification of the way that can be used in the deployment of the AIS.
 Identification of ethical issues those are related to the deployment.
The methodology which has used to address the following objective consists of addressing
the objectives separately. The literature review has been done to understand the literature gap.
The gap of the literature will help to identify the areas for the discussion.
Literature Review:
AIS can be considered as the system which validates the information regarding the
transactions and other financial functions in the organization. The analysis of the financial and
the transaction data is done by the AIS and the report generated by this system helps in the
decision making process of the organization. There are several guidelines which are provided by
ISACA and AICPA (Romney & Steinbart,2015). These guidelines are helpful in understanding
the performance of the AIS.
AIS can be regarded as the emerging system which aims to mitigate the failure and the
numbers of errors in the process. In this context role of the stakeholders in the functioning of the
AIS is important. There are four types of internal stakeholders in the whole system (Trigo,
Belfo&Estébanez, 2016). Data custodians help to design the process related to AIS, data
procedures are responsible for collection of data for the system, data managers are responsible
for the managing of the data and data consumers are the users of the system.
AIS helps the users to provide the information so that they can effectively control and
process all the systems and the functions available in the AIS. In the traditional system, after
happening of the transaction and entry is recorded in the journal (Mirzaey,Jamshidi&

5ACCOUNTING INFORMATION SYSTEM
Hojatpour,2017). In the manual accounting system there is a chance for the happening of the
error. However, the traditional AIS can be modified with JIT. JIT allows the computerized
version of AIS (Nurhayati&Mulyani, 2015) . There are certain advantages of using AIS. The
electronic transaction system will help the flow in the communication between the supplier and
the organization. The organization can present the demand of the consumers in a small time span
(Susanto, 2016). Apart from that the implementation of the computerized AIS will help to
increase the quality of the service provided by the company and it will help the organization to
plan effectively for delivering the service.
The main objective of using the AIS in the business organization is to evaluate the data in
an effective manner (Mirzaey,Jamshidi& Hojatpour,2017). The main concern regarding this
evaluation is to maintain the quality of the data and mitigate the errors in the data. The error free
data will generate the accurate report which will eventually help in the decision making process.
AIS provides the organizations with the quantitative information which eventually helps
to generate the effective accounting information. The system can be both manual and
computerized (Mirzaey,Jamshidi& Hojatpour,2017). However, the computerized version of the
AIS is more effective. The main function of the AIS is to collect and process the raw data and
generate the report which would be helpful in the decision making for the organization or the
company (Libby, 2017). There are certainadvantages of using the AIS in the organization. Good
decision making can be done through the effective use of the AIS which will eventually lead to
the quality management of the services provided by the company (Mirzaey,Jamshidi&
Hojatpour,2017). The collaboration of the work between the different departments within the
organization can be accomplished through the use of the AIS.

6ACCOUNTING INFORMATION SYSTEM
The information in the AIS can be divided into two groups- the information used for the
decision making purpose in the organization and the information which are needed for the
coordination in the company (Susanto, 2018). The AIS provides the data and information for the
decision making process however the effectiveness of the decision making process depends on
the perception of the users about the data.
All these articles and paper has discussed about the different aspects and the functionality
of the usage of the AIS in the organization (Mirzaey,Jamshidi& Hojatpour,2017). However,
detailing of the processes followed in the AIS for the processing of the data has not been covered
in the discussion.
Theoretical background:
AIS is the system which helps to process the data and provide the information to the
organizations which help the organization in the decision making process. Apart from that this
system also helps the organization in planning and managing of the financial and operational
data (Mancini & Lamboglia,2017). The system can be both manual andcomputerized. The
effectiveness of the computerized AIS is more effective as it can automatically tracks the
transactional details of the organization(Mirzaey,Jamshidi& Hojatpour,2017). In the theoretical
background regarding the AIS some of the concepts can be discussed-
Major function of the AIS:
The major function of the AIS is to collect the data from the different sources regarding
the organization. The data are processed through the system and provide relevant information.
The information generates the report which helps in the decision making process. Apart form
that the significance of using AIS is that it helps to enhance the quality of the service provided by
the organization.

7ACCOUNTING INFORMATION SYSTEM
Identification of the business and transactional life cycle:
The transactional and the business life cycle regarding the AIS stats with the identification of
the business process and the transaction. As for example the system in the organization can
specify the difference between transaction regarding the loan transaction and transaction of the
debit. The Thee recording and monitoring of the transaction needed to be recorded in the ledger
and journal. The balancing is needed to be done in both the cases. The entries will evaluated and
will reflect the financial condition of the organization. This will help in the decisisonmaking
process of the organization.
Documentation of the mapping of the function in the AIS:
All the functions of the AIS can be implemented in the computerized version of the AIS.
In order to make new entries in the system and entry in the ledger the proper software can be
implemented (Abduljalil& Zainuddin,2015). In this case usage of SAP can be beneficial (Seyal&
Rahman, 2015). On the other hand the front view of the system needed to be developed by the
experts in a proper way so that the users can interact with the software in a proper way.
Deployment of the AIS in the organization:
The deployment of the AIS in the organization can be done in various ways. However, the
gathering of the requirements and the functionality is needed to be known before the
implementation of the system(Mirzaey,Jamshidi& Hojatpour,2017). There are various AIS
available in the market with various functionalities (Teittinen& Granlund,2017). The
requirements are needed to be known to choose which functionalities are needed to be
implemented in the organization. Apart from that the use of the proper infrastructure and training
of the employees regarding the handling of the system are needed to be done in a proper way.
The security is needed to be considered as the main issue during the deployment of the system.

8ACCOUNTING INFORMATION SYSTEM
The system is needed to be secured and the limited accessibility is needed to be given to the
employees of the company so that the unnecessary modification can never be made. The
deployment of the AIS can be done through the implementation of the software like SAP.
Identification of the ethical issues those can be happened regarding the use of the AIS in
the organization:
There are certain ethical issues those are needed to be concerned regarding the
implementation of the AIS in the organization. One of the main ethical issue regarding the usage
of the system is the unauthorized access in the system (Mirzaey,Jamshidi& Hojatpour,2017). In
this case, the implementation of the user name and the password for handling the system can be
done. This will also mitigate the chances of the data manipulation in the system (Patel,2015).
The encryption of the data is needed to be done in a proper way so that the AIS can serve the
purpose and can be useful for large number of organizations.
Another ethical issue regarding this process is breaching of the data and the degradation
of the quality of the data. The breaching of data can manipulate the result and the degradation of
the quality of the data can lead to the providing of the wrong information.
Current trend:
The AIS is a concept where the managing and processing of the data are done in order to
acquire the information regarding the decision making process in the organization. The system
can be manual and computerized (Komala, 2017). In the current trends the usage of the different
computerized accounting system are doing well for providing the business solutions for the
organization. There are different advantages of the computerized information system over the
traditional AIS.

9ACCOUNTING INFORMATION SYSTEM
Analysis and interpretation:
The analysis and interpretation from the discussion indicates that the proper
implementation of the AIS will help the organization to manage the transactional data long with
the proper management of the information (Mirzaey,Jamshidi& Hojatpour,2017). Apart form
that the AIS will help the organization in the decision making process which will eventually lead
to the betterment of the quality of the services provided by the company(Mirzaey,Jamshidi&
Hojatpour,2017). The implementation of the computerized AIS will help to mitigate the error in
the data and the communication between the different departments of the organization can be
increased (Brandas, Megan & Didraga,2015). However, there are some ethical issues related to
the usage of the AIS. Those issues can be resolved using the proper tools and security measures.
Findings:
The significance of the application of the AIS can be found out from the discussion
(Mirzaey,Jamshidi& Hojatpour,2017). The main findings of this paper includes the different
aspects of the AIS along with the processes involved in the system (Mirzaey,Jamshidi&
Hojatpour,2017). The advantages and the ethical issues along with the mitigation plan for those
issues has been discussed in this context.
Conclusion
The discussion is regarding the significance of the usage of the AIS in the organization.
Different aspects of the AIS have been discussed in this context. The aspects have been
identified from the review of the literature regarding the topic. The gap in the literature review
has been identified. The transaction life cycle has been discussed. In this context the ethical
issues has also been discussed. It can be said from the above discussion that the usage of the AIS

10ACCOUNTING INFORMATION SYSTEM
can be beneficial for the organization and there are certain advantages of using the computerized
AIS over manual AIS.
References
Abduljalil, K., &Zainuddin, Y. (2015). Intrinsic and extrinsic motivation as attitude factors
towards adoption of AIS (AIS) in Libyan SMEs. International Journal of Academic
Research in Accounting, Finance and Management Sciences, 5(1), 161-170.
Brandas, C., Megan, O., &Didraga, O. (2015). Global perspectives on AISs: mobile and cloud
approach. Procedia Economics and Finance, 20, 88-93.
Hassan, H., Nasir, M. H. M., &Khairudin, N. (2017). AISs. In SHS Web of Conferences(Vol.
34). EDP Sciences.
Ismail, N. A., & King, M. (2014). Factors influencing the alignment of AISs in small and
medium sized Malaysian manufacturing firms. Journal of Information Systems and Small
Business, 1(1-2), 1-20.
Komala, A. R. (2017). Cause and effect of AIS: A study in national Zakat management
organization. JABS, 3(2), 69-76.

11ACCOUNTING INFORMATION SYSTEM
Libby, R. (2017). Accounting and human information processing. In The Routledge Companion
to Behavioural Accounting Research (pp. 42-54). Routledge.
Mancini, D., &Lamboglia, R. (2017). AIS and Transparency: A Theoretical Framework.
In Reshaping Accounting and Management Control Systems (pp. 249-261). Springer,
Cham.
Mirzaey, M., Jamshidi, M. B., &Hojatpour, Y. (2017). Applications of artificial neural networks
in information system of management accounting. International Journal of
Mechatronics, Electrical and Computer Technology, 7, 3523-3530.
Nurhayati, N., &Mulyani, S. (2015). User participation on system development, user competence
and top management commitment and their effect on the success of the implementation
of AISs. European Journal of Business and Innovation Research, 3(2), 56-68.
Patel, F. (2015). Effects of AIS on organizational profitability. International Journal of Research
and Analytical Reviews, 2(1), 168-174.
Romney, M. B., &Steinbart, P. J. (2015). AISs. Pearson Education.
Seyal, A. H., & Rahman, N. A. (2015). A Preliminary Investigation of Measuring Users
Satisfaction & Success on Financial & AIS: Bruneian Perspective. International Journal
of Business and Management Review, 3(2), 1-22.
Susanto, A. (2016). The Effect of Internal Control on Accounting Infromation
System. International Bussiness Management, 10(23), 5523-5529.

12ACCOUNTING INFORMATION SYSTEM
Susanto, A. (2018). THE INFLUENCE OF BUSINESS PROCESS AND RISK
MANAGEMENT ON THE QUALITY OF AIS. Journal of Theoretical & Applied
Information Technology, 96(9).
Teittinen, H., &Granlund, M. (2017). AISs and decision-making. In The Routledge Companion
to AISs (pp. 103-115). Routledge.
Trigo, A., Belfo, F., &Estébanez, R. P. (2016). AISs: evolving towards a business process
oriented accounting. Procedia Computer Science, 100, 987-994.

13ACCOUNTING INFORMATION SYSTEM
Appendix

14ACCOUNTING INFORMATION SYSTEM