Accounting Information Systems: A Review

This assignment provides a comprehensive review of Accounting Information Systems (AIS). It delves into the definition, purpose, and functions of AIS, highlighting its significance in modern business operations. The assignment also examines relevant academic literature on AIS, exploring various research methodologies and perspectives. Specific topics covered include design science research, interpretivism, gender differences in AIS, technology adoption models, and the usefulness of AIS in emerging economies.

Accounting Information
System

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
a) Business Process of B baker...............................................................................................2
TASK 2............................................................................................................................................3
b) Processes which are indispensable.....................................................................................3
c) Outcomes required for achievement of business objectives..............................................4
TASK 3............................................................................................................................................5
a) Requirements of system.....................................................................................................5
TASK 4............................................................................................................................................6
a) Accounting software to be used.........................................................................................6
b) Accounting software category............................................................................................8
TASK 5............................................................................................................................................8
a) Comparison of accounting software packages...................................................................8
b) Selection of best vendor...................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

EXECUTIVE SUMMARY
In the below provided report various aspects in respect of accounting information system
are described. All the work has been carried out in best manner by adoption of new software.
The process which is followed by B bakery and also requirements of various systems in business
has been elaborated in the given report. The problems which are faced are determined together
with ways to resolve them using AIS The software which had been selected and that which is
considered to be best for company is considered and its advantages and other features are also
provided. For this comparison is made among different software that are present and the decision
is taken that which one will be chosen so that required objectives and so that targets can be
achieved timely.
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INTRODUCTION
In all the businesses, there is the need to have proper accounting and for this, various
tools are used. By it all the accounts can be managed in most appropriate manner (Romney and
Steinbart, 2012). All the recording can be done with the help of technology and this will make
system easier and smooth. For it various information systems are there that shall be utilised. In
the report, all the software that can be used by B bakery have been explained and then best
among all will be chosen so that proper analysis can be conducted. .
TASK 1
a) Business Process of B baker
In baking business, there are various activities which are performed by which such
products will be manufactured which can be used for long period of time (Hall, 2012). Some of
them are cakes, bread, biscuits etc. In the given case B bakery is family business and all the
products are supplied to various pub chains and supermarkets. All of the customers to whom sale
is made are from various classes which means some are big and other are small businesses. The
products are made to be supplied to different businesses by which expansion will be made
possible. There are various functions which will have to be undertaken and for that different
departments are established which will be including sales, supply chain, production, marketing,
finance and accounts. All of these processes will be used so that whole task can be completed in
most effective manner. In the production process, for the purpose of manufacturing, raw material
will be required that will be arranged by use of supply management chain as they will be
responsible for its purchases. By using them production department will be making all products.
After this their storage will have to be made which will be done in inventory section and then
they will be supplied to all those pubs and stores who have ordered the goods and for this
logistics management will be used. All the activities in relation to payments and accounting will
be seen by accounts section. these transactions will be recorded properly that will increase the
efficiency level.
It shall be noted that all the work will be performed by different persons and for this it
should be ensured by HR department that skilled employees must be hired. As they will be
professionals and will be carrying adequate knowledge so that performance can be improved and
issues can be resolved easily. At last orders will be taken by sales department from various
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markets in which products can be sold (Gelinas, Dull and Wheeler, 2011). For increasing the
profit level, it is required that sales must be enhanced and this can be achieved by proper
marketing in which products of firm will be promoted. By it more customers can be attracted.
From all this discussion, it can be said that work of all departments is related to one
another and if there will be any loophole in one section then whole system will be affected by it.
An example of this can be that if proper orders will not be taken then sales will be affected and
this will have impact on accounts. the objectives of business will be achieved and full
satisfactions will be received. This is what will have to be adopted by B baker so that it can
overcome all the problems which are being faced by it.
Illustration 1: business process
(Source: Business process, 2017)
TASK 2
b) Processes which are indispensable.
All the activities which are to be performed in any bakery business are explained above
which are all relevant and will have to be used in one or the other way. But then also some of
them are such which will be core processes and cannot be avoided such as production, supply
chain management, accounts and human resource (Simkin, Norman and Rose, 2014). In case of
B bakers, it can be noted that there is good growth which is achieved by business but in current
position it is facing some issues in relation to accounts. All the employees who are involved in
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this are highly skilled and are working properly but they are not able to help firm in decisions to
be made in respect of competition. By this there is loss suffered by it, as some of the major
customers are lost. This has happened as competitive prices were not provided to them. So, more
amount of information will be required in order to carry on the business smoothly in near future.
For this it will be required that research shall be conducted with the help of which all the data
will be collected. Then on the basis of them strategic decisions will be made by the firm by the
use of which more success will be brought to B Bakers.
The main aspects which is being considered for this is accounting information system for
which software will be used. So, the important requirements for it are that accounts will have to
be enhanced. Then all the systems which are used will be integrated with processes that are
undertaken. Number of software in this respect that can be used and some modifications can be
made in them according to needs of business. So, all of them are major requirements to be met.
c) Outcomes required for achievement of business objectives.
In any business, there are some or other objectives for which are conducted and they have
to be achieved so that organisation will be able to survive (Geerts, 2011). Various decisions are
to be made and the main need for it is of information that will have to be collected for all the
activities whether they are operational or transactional. The most information can be attained
from accounts and as they are connected to all others so in them data of others will also have to
be collected. Some of the important data which will be involved in it will be about cost of
material and labour, supplies, stock, profit and sales. They will be significant as in setting of
competitive price all of these will have to be considered. Also, the payroll of staff will be
required to make decisions and so it will be obtained.
The integration will be made of systems and processes as then only whole information
will be collected. The compatibility will be improved with the help of this and also business
process will be taken place in faster manner. By this, sales will be enhanced which will thereby
lead to increase in profit levels of business. All the accounts and finance related information will
be managed, collected and stored in better manner with the implementation of accounting
information system as a structure will be provided which will have to be followed by all. This
will be performed highly skilled professionals. Also, information can be forecasted with the help
of them and this will be used for the advantage of firm.
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TASK 3
a) Requirements of system
In the given case, it will be needed that establishment of accounting information system
shall be provided. For the achievement of objectives, it will be needed that they shall be carried
out in proper manner (Dilla, Janvrin and Raschke, 2010). A centralised database will be created
as all the information, which will be shared due to integration of different processes which will
take place because of ERP. This will be made available to system by which they will be able to
use it for carrying out of processes in more accurate manner (Dillard and Yuthas, 2013). There
are many such functions which will be provided by accounting information system to be carried
out in business. Some of those which are most important are described below:
 By the use of it all the information collected from the various transactions will be
processed in most effective and efficient way. It will be required that all the sources shall
be captured for it. Journal will be used to record all of them in which all transactions will
be entered in chronological manner. After this all of it will have to be transferred to
another account which will be ledger. Here all will have to be sorted on the basis of
several accounts. So, this will be first important function which will be performed by
system.
 One of the important activity in business is decision making which will be performed by
managers and systems will be providing help in this as they will be giving all the
necessary information. The data will be obtained from research and analysis which will
be conducted. The information that will be shared is divided into two categories which
will be provided to management and they include financial statements and managerial
reports. So, it will be useful in making of such decisions that will be beneficial to
company.
 It is required that evaluation shall be made of all the data which has been collected and
for this reliability will have to be ensured. In order to achieve this an internal control will
be established which will be done by software in respect of accounting information
systems. By this it will be identified that whether all the activities in business are
conducted with full efficiency or not. Also, it will be determined that objectives which
have been set by business are followed or not. It shall be ensured that all of the work
should be undertaken in accordance with present targets and goals.
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Illustration 2: Functions of accounting information systems.
(Source: Functions of accounting information systems, 2017)
All of the above mentioned are some of most important functions which are undertaken
and shall be noted so that the objectives in regards to information technology can be achieved.
There are some other systems also which can be used so that business can achieve growth
(Galliers and Leidner, 2014). It shall be identified that whether system will be able to provide all
the features which are mentioned and if yes then it will be accepted.
TASK 4
a) Accounting software to be used.
In the business, there are various aspects which can be used to know the category in
which business will be falling (Salehi, Rostami and Mogadam, 2010). The number of employees
and revenue will be major criteria. In the given case total employees are 70 and revenue has been
identified at $13.5 million. There are number of accounting software which can be used. But in
order to incorporate them in appropriate manner it will be required that they shall gain a proper
understanding of them. Some of the most commonly used software vendors which can be
considered are provided below:
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 SAP: This is one of the most important accounting software which is used worldwide. It
has gained expertise in financial business. The main feature of it is that this can be used
in all types of business irrespective of their sizes.
This will be considered in all and it will be due to the reason that all of the units in it are
connected with accounting functions and that will be helpful for the business. By this,
shortcomings can be identified and then measures will be taken so that overall performance of
business can be improved. By the help of it various benefits can be attained which will be
including that cash flow will be controlled and it will also be determined that which are tasks in
which excessive expenditure is being incurred. There are many transactions which takes place
and they all will be evaluated with use of it. Also, alerts will be provided in respect of any
activity that is to be performed. By this chances that any important activity will be missed will
eliminate. So, by this negative impact of it will be avoided. The information which will be
present in it will be indicator of various important aspects to be included. Another advantage will
be in respect of price. It means that price will be set at that level by which growth can be
achieved.
 MYOB: It is the software which is used by small and medium sized businesses and by
this bookkeeping will be made easier. This will provide relief to consultants and
accountants. By this better value will be obtained (Oliveira and Martins, 2011). All the
changes will be determined, cash flow control will be attained by the use of it. By this
business will be able to gain various merits such as time will be saved and also all the
changes in tax will be considered on priority basis (What small biz owners need to know
about accounting information systems, 2017). The software offers flexible payroll
solutions by which payments will be made to employees on proper basis.
By the help of this productivity of business will be increased and will make business
easier. Solutions will be provided to manage business in appropriate manner. Growth in business
will be achieved by it and this will be for all the business having any number of employees. This
can be utilised for short term also which means that it is not necessary that long term contracts
shall be made by the customers.
 Xero: This is the software by which the accounting software that will be based on cloud
will be developed. It can be used for both medium and small type of businesses (Sutton
and Arnold, 2013). By this people will be able to connect with right numbers and they
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will be having access to it at any place and with any device. All the processes of finance
will be managed and coordinated with the use of this in which a easy platform will be set
and whole work will be included in this. This can be used by users from the devices
which will be enabled by internet. The other means which will be served by it will be that
it will be providing remote collaboration and also for professionals will be treated as
accounting advisor. By this the need of paper work will be eliminated and also clients
will not be required to visit. All those activities which will be time consuming and
resource draining in respect of bill paying, expense management will be converted into
such activities that will be providing support to accountants in carrying out the daily
operations in easy manner and in limited period of time. By this the data will be more
accurate and it will be modified on regular basis so that it will remain up to date.
b) Accounting software category.
Above are provided various software which can be used by an enterprise in respect of
accounting. There are different businesses and all are of different sizes. It will be required that
categorisation shall be done to identify the business category. This will be needed because then
on the basis of this, it will be decided that which will be the software that can be taken into
consideration (Lenard, Wessels and Khanlarian, 2010). It can be seen that as the company is
having 70 employees so it can be classified as small to medium sizes business. so software will
be chosen on basis of it. In this category, such software will be used that will be robust and will
be highly scalable.
TASK 5
a) Comparison of accounting software packages.
In the industry, there are various providers who will be providing solutions or can
software which will be used by the business so that it can be run in most effective and efficient
manner (Soudani, 2012). The selection will be done that which will be the vendor who will be
giving best services. For this it has been identified that B baker will be in the category of small to
medium sized business and for this the tools which can be used are explained above. comparison
will be made so that best one can be selected among all. In the given case XERO and MYOB
will be the ones which will be compared so that it will be identified that which will be most
suitable for business. It should be such by which problem in respect of accounting which is faced
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by B baker in current case will be resolved in best possible manner. There will be some or the
other difference which will be existing in various software that are present. So it will be required
that they shall be identified and understood so that further processing can be carried out. The
table which will be provided the comparison is provided here under:
Basis MYOB Xero
Access and setup This will be the system in
which whole process will be
carried out in online manner
and for this, various devices
will be utilised (Alsharayri,
2012). Some of them will be
including computers, mobiles
and tablets.
It will also be using the
online manner which is
considered in MYOB.
Updates There is the automatic system
which is used in order to
include all the updates which
takes place.
In this also updated will be
taken in automatic manner.
By this work will become
easier as no extra efforts will
have to be made in this
respect by company.
Usage This will be good in context of
ease with which it can be used.
The manner in which
activities can be conducted in
it is simple and it will be
excellent to be used. This
will be due to the reason that
work will be conducted in
fast manner under this.
User Access There will be multiple users
which will be provided with
access which means that many
users can carry out their
Here also there will be
permission in respect of its
usage by multiple users.
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functions with the use of it.
Reporting speed In this the period which will be
included in reporting will be
longer. This will be due to the
reason that one report will be
run at one time so it will make
the process lengthy.
The manner in which reports
will be carried out in it is
fast. Here it is possible that
various reports can be made
in the different tabs at same
period of time. By this time
will be saved and process
will be completed in faster
manner.
Payroll In this system, the payroll that
will be included is related to
the single person only
(Goldkuhl, 2012). If there will
be more staff then the different
version of it will be required or
add on will be paid to extra
staff.
Payrolls will be included and
that will be including various
aspects such as payslips,
summaries, etc.
b) Selection of best vendor.
In the business, there is the need that investment shall be made on accounting information
system so that proper accounting objectives can be attained. So, in it requires that such software
will be undertaken by which all the processes which are used by it will be integrated with each
other (ALIa, Rahman and Ismail, 2012). Also, the transactional and operational data will be
analysed so that proper decisions can be made with the use of them. In the given case Xero will
be recommended as by this all the work will be integrated also in this all the task can be
performed on cumulative basis and that will be leading to saving of time.
By the help of this all information will be converted into such manner that it will become
meaningful and can be used to perform intelligent functions in business. It will allow the users to
work in any area they want and at any time as access will be provided to them without any limit.
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The cash flow will be improved and also payments will be provided on timely basis. So due to
all these reasons this will be taken into consideration by B Bakers.
CONCLUSION
From the report which is present above it can be concluded that there are various types of
accounting software which can be considered in order to improve the whole process. For this it
the process that is undertaken by B bakery had been identified and that has been mentioned
above. Also, the requirements to be met are provided by the help of which needs of the business
in context of system can be determined. The vendor from whom services will be taken is also
identified and can be used effectively.
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REFERENCES
Books and journals
ALIa, A.Z.W.A.D.I., Rahman, M.S.A. and Ismail, W.N.S.W., 2012. Predicting continuance
intention to use accounting information systems among SMEs in Terengganu, Malaysia.
International Journal of Economics and Management. 6(2). pp.295-320.
Alsharayri, M., 2012. Evaluating the performance of accounting information systems in
Jordanian private hospitals. Journal of Social Sciences. 8(1). p.74.
Dilla, W., Janvrin, D.J. and Raschke, R., 2010. Interactive data visualization: New directions for
accounting information systems research. Journal of Information Systems. 24(2). pp.1-37.
Dillard, J. and Yuthas, K., 2013. Critical dialogic, agonistic pluralism, and accounting
information systems. International Journal of Accounting Information Systems. 14(2).
pp.113-119.
Galliers, R.D. and Leidner, D.E. eds., 2014. Strategic information management: challenges and
strategies in managing information systems. Routledge.
Geerts, G.L., 2011. A design science research methodology and its application to accounting
information systems research. International Journal of Accounting Information Systems.
12(2). pp.142-151.
Gelinas, U.J., Dull, R.B. and Wheeler, P., 2011. Accounting information systems. Cengage
learning.
Goldkuhl, G., 2012. Pragmatism vs interpretivism in qualitative information systems research.
European Journal of Information Systems. 21(2). pp.135-146.
Hall, J.A., 2012. Accounting information systems. Cengage Learning.
Lenard, M.J., Wessels, S. and Khanlarian, C., 2010. Gender differences in attitudes toward
computers and performance in the accounting information systems class. American
Journal of Business Education. 3(2). p.23.
Oliveira, T. and Martins, M.F., 2011. Literature review of information technology adoption
models at firm level. The electronic journal information systems evaluation. 14(1).
pp.110-121.
Romney, M.B. and Steinbart, P.J., 2012. Accounting information systems. Boston: Pearson.
Salehi, M., Rostami, V. and Mogadam, A., 2010. Usefulness of accounting information system
in emerging economy: Empirical evidence of Iran. International Journal of Economics
and Finance. 2(2). p.186.
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Simkin, M.G., Norman, C.S. and Rose, J.M., 2014. Core concepts of accounting information
systems. John Wiley & Sons.
Soudani, S.N., 2012. The usefulness of an accounting information system for effective
organizational performance. International Journal of Economics and Finance. 4(5).
p.136.
Sutton, S.G. and Arnold, V., 2013. Focus group methods: Using interactive and nominal groups
to explore emerging technology-driven phenomena in accounting and information
systems. International Journal of Accounting Information Systems. 14(2). pp.81-88.
Online
What small biz owners need to know about accounting information systems, 2017. [Online].
Available through: <https://www.godaddy.com/garage/smallbusiness/manage/small-
business-owners-need-know-accounting-information-systems/>. [Accessed on 5th
September 2017].
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