Research In Accounting Practice: AIS Essay

Question:

Discuss about the Research in Accounting Practice for AIS.

Answer:

Introduction

Information processing system is seen as the system which is associated to taking the information from a sequence of the enumerated symbols and transforming the process form one form to another using an algorithmic process. A computerised information processing system consists of input, processor, storage and output. In accounting terms the “accounting information system (AIS)”, is seen as the process of collecting, accumulating and storing of the accounting data which is seen to be used by the decision makers. The AIS acts a system for tracking of the accounting activities which are in conjunction with the use of resources. The main output of the financial data can be used internally by the tax authorities, creditors and the investors. This section of the report aims to highlight the relevant areas which are related to the generating accounting reports and use the information for decision making and clients keeping report of the same (Hall 2013).

Discussion

The Information Environment

The main elements of the AIS are seen with recognizing the information in a business resource environment. The various types of the information provided in the case study have been related to the various type of the information which is seen to be related to providing the relevant solution for the 50 employees (Jiang 2016). The computerized information process system in Simple Solutions shall be divided into three tiers namely operations management, middle management and top management. The operations management shall be mainly responsible for the day to day operations, the middle management is further seen to be responsible for the short term planning and coordinating the activities which are seen to be associated to the accomplishment of the objectives (Kanellou and Spathis 2013). The top level management has been further seen to be responsible for the longer-term planning and setting organizational objectives. The internal and external flow of information will be conducive in the decision making process. It has been further seen that the company will be able to serve common purpose for effective decision making by the use of accounting information. It has been further seen that the main elements has been further seen in terms of the multiple components, relatedness, system vs. Sub system and purpose (Sambasivam and Assefa 2013).

Accounting Information System

AIS are identified as the subsystem for the financial process and the nonfinancial transactions which are related to directly affecting the processing of financial transactions. For example in Simple Solutions the updating the customers’ names and addresses are seen to be processed by the AIS. These changes will be seen to be useful in processing for future sales to the customer (Daoud and Triki 2013).

The main composition of the AIS is seen to be consisting of three major subsystems namely the “general ledger/financial reporting system (GL/FRS)”, which is associated to generating traditional financial statements such as the income statement, balance sheet, statement of cash flows and tax returns. The next major subsystem is seen as the “transaction processing system (TPS)”, this is seen to be associated to the daily business operations in terms of the documents, messages and generation of the relevant reports. The next important subsystem has been further seen in terms of the management reporting system (MRS). This is seen to be associated to providing of special purpose financial and the relevant information needed for the purpose of the decision making such as budgets, variance reports, and responsibility reports (Nan and Wen 2014).

Management Information System

The company will be able to go beyond the scope of financial reporting and will be able to implement the decision making functions by implementing the use of the information for the decision making process. In this particular context MIS is seen to go beyond the AIS. As it has been seen that Simple Solution will grow in size, the use of MIS will be able to processes nonfinancial transactions that are not normally processed by traditional AIS. Some of the main considerations of the use of decision making with the management information processing system will be obtained in terms of Portfolio Management Systems, Capital Budgeting Systems, Market Analysis, New Product Development and product/ service analysis (Kanellou and Spathis 2013).

Factors contributing to successful implementation of management accounting systems in SMEs

The main factors of successful implementation of management accounting systems in SMEs has been seen to be associated to cost, budget and decision support system. With the various types of the research supporting the system it has been found that the highest correlation with the cost component. The main consideration that the small organizations need to go through is related to know whether they are able to support the cost which is associated to the main constraints in an organization. The current management accounting practices of the company are highly dependent on the implementation of the overall costing system and budgeting system. The budgeting system is seen to include the results based on the high attention from the employees (Quan, Li and Wang 2013). It has been further seen that SME companies have shown the main factors with wide adoption on basic techniques of management accounting, such as costing system; full budgeting system and PMS. It has been further discerned that there are significant differences between the implementation rates for sophisticated MAPs techniques among the SMEs. Hence it can be observed that the aforementioned factors have the capacity to hinder or add to the success of the business (Econjournals.com. 2017).

Conclusion

The various types of the assertion made form the study has been able to show that the AIS acts a system for tracking of the accounting activities which are in conjunction with the use of resources. The main output of the financial data can be used internally by the tax authorities, creditors and the investors. The various discussions have been further able to show that MIS is seen to go beyond the AIS. As it has been seen that Simple Solution will grow in size, the use of MIS will be able to processes nonfinancial transactions that are not normally processed by traditional AIS. The main factors for the success of the management accounting systems in SMEs can be further seen in terms of cost involved and the total budget.

Reference List

Daoud, H. and Triki, M. (2013) ‘Accounting information systems in an ERP environment and Tunisian firm performance’, International Journal of Digital Accounting Research, 13. doi: 10.4192/1577-8517-v13_1.

Econjournals.com. (2017). [online] Available at: [Accessed 15 May 2017].

Hall, J.A., 2013. Accounting information systems. Cengage Learning.

Jiang, X. (2016) ‘Biases in Accounting and Nonaccounting Information: Substitutes or Complements?’, Journal of Accounting Research, 54(5), pp. 1297–1330. doi: 10.1111/1475-679X.12153.

Kanellou, A. and Spathis, C. (2013) ‘Accounting benefits and satisfaction in an ERP environment’, International Journal of Accounting Information Systems, 14(3), pp. 209–234. doi: 10.1016/j.accinf.2012.12.002.

Nan, L. and Wen, X. (2014) ‘Financing and Investment Efficiency, Information Quality, and Accounting Biases’, Management Science, 60(9), pp. 2308–2323. doi: 10.1287/mnsc.2013.1864.

Quan, Q., Li, Y. and Wang, L. (2013) ‘Chapter 83 Research of Accounting Information System Under E-Commerce’, International Conference on Information Engineering and Applications (IEA) 2012, 219, pp. 679–686. doi: 10.1007/978-1-4471-4853-1.

Sambasivam, Y. and Assefa, K. B. (2013) ‘Evaluating the Design of Accounting Information System and its Implementation in the Ethiopian Manufacturing Industries’, The International Journal’s Research Journal of science & IT Management, 2(7), pp. 16–29. Available at: www.theinternationaljournal.org.

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