Information System for Accounting

Running Head: INFORMATION SYSTEM FOR ACCOUNTING 1
INFORMATION SYSTEM FOR ACCOUNTING
Name
Institutional Affiliation

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Introduction
Modern organizations are increasingly adopting the use of technology in their operations.
Information system for accounting is a system used to collect process and store accounting and
financial data. The use of the computer-based Accounting information system allows
organizations to track accounting activities with the help of IT Resources. The use of accounting
information system has increasingly enhanced efficiency in the processes of collection, storage,
and processing of financial data. The fact that they can be used on various devices such as tablets
and smartphones makes them more adaptable and accessible. The emergence of the accounting
software industry which is currently estimated to be worth billions of dollars has led to the
introduction of multiple AIS Systems for organizations desiring to benefit from the advantages
of computer-based systems. Walton Brothers Auto solutions run by Sam and Walton which has
in the past few years experienced massive growth. However, their organization relies heavily on
paper-based reporting mechanisms and traditional reporting means. With this kind of growth,
however, the organization is faced with numerous challenges in meeting its reporting
requirements. Journalizing transactions and maintaining books which are done by the
organization’s bookkeeper using traditional method consumes a considerable amount of time. As
a result of this, inconveniences such as delayed payments from customers and delayed payments
to suppliers are experiences from time to time. The reliance on traditional means of reporting
also makes it quite hard to have debts from customers paid on time. With the organization
recording an 80% growth in revenue, several other challenges are being experienced in the
organization, all attributed to reliance on traditional means of reporting.

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Task one.
Traditional accounting system and its strengths and weaknesses
Traditional accounting systems rely on manual processing of accounting information
whereby transactions are recorded in columnar paper and kept in huge binders. Unlike modern
accounting programs in which transitions are recorded on computer programs, in the traditional
method transactions are recorded on paper. These accounting systems use books, paper and
physical records where transactions are entered by hand in multiple rows and in at least four
columns divided to accommodate information such as amounts and dates (Chapman &
Kihn,2009).
Strengths of Traditional accounting system
Despite the increased adoption of computer-based accounting systems, the traditional
system can also be perceived as a suitable alternative because of its various advantages outlined
below.
Accessibility
Accessibility is one of the key benefits of manual accounting systems. Unlike computer-based
accounting which is likely to be unavailable in case of power shortage and low internet hindering
accessibility, this can be accessed at any time. It is therefore not affected by the absence of
power or internet connection challenges (Dandago & Rufai, 2014).
Not prone to file corruption and Data systems errors.

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This is one of the characteristics of computer-based accounting systems. In case digital
errors occur on any of the files, or a user opens the wrong file containing old data, the validity of
the whole data is likely to be affected. Such errors are however not present in manual accounting
systems (Grabski, Leech & Schmidt, 2011). The fact that manual systems also use ledgers for
each account means that there is no possibility of confusing different sets of data.
Ease of correcting errors
The traditional accounting system naturally guides against number transpositions and
errors in data entry. With all transactions being debited in one account and credited in another
any errors can be identified and solved with ease. The trial balance is used in making a
comparison between credited and debited transactions. Any mismatch would, therefore, mean
that a certain error has been encountered somewhere (Laudon & Laudon, 2016).
Continued attention to tasks
Manual accounting ensures that all accounting tasks are monitored on a continuous basis. This
continuous monitoring can be advantageous in that any losses can be identified with ease and
corrective actions taken. This is unlike automated accounting systems where organizations have
to wait for a certain period to add up losses and profits (Kuperman, Gardner & Pryor, 2013).
Easy to explain
The use of traditional accounting systems in preparing financial statements for
organizations makes more explainable to people outside the organization that would have
difficulties in understanding the complex computer-based accounting systems (Sori,2009).
Weaknesses