Question

RESEARCH ARTICLE
ACCOUNTING INFORMATION SYSTEM AND IMPROVEMENT ON FINANCIAL REPORTING.

I just need an article review of the above article...you can find it on google. just 1 page review. Thank you.

Answer 1

Accounting Information System

An accounting information system (AIS) is a structure that a business uses to collect, store, manage, process, retrieve and report its financial data so it can be used by accountants, consultants, business analysts, managers, chief financial officers (CFOs), auditors, regulators, and tax agencies.

Accounting information systems generally consist of six primary components: people, procedures and instructions, data, software, information technology infrastructure, and internal controls.

The detailed description about each one of them is as follows:

1. People who use the system, including accountants, managers, and business analysts
2. Procedure and instructions are the ways that data are collected, stored, retrieved, and processed
3. Data including all the information that goes into an AIS
4. Software consists of computer programs used for processing data
5. Information technology infrastructure includes all the hardware used to operate the AIS
6. Internal controls are the security measures used to protect data

Functions of AIS:

Accounting information systems have three basic functions:

1) The first function of an AIS is the efficient and effective collection and storage of data concerning an organization’s financial activities, including getting the transaction data from source documents, recording the transactions in journals, and posting data from journals to ledgers.
2)The second function of an AIS is to supply information useful for making decisions, including producing managerial reports and financial statements.
3)The third function of an AIS is to make sure controls are in place to accurately record and process data.

Reliability of AIS:

The American Institute of CPAs (AICPA) and Canadian Institute of Chartered Accountants (CICA) have identified five basic principles important to AIS reliability:

Security - Access to the system and its data is controlled and limited only to those authorized.
Confidentiality - The protection of sensitive information from unauthorized disclosure.
Privacy - The collection, use, and disclosure of personal information about customers is done in an appropriate manner.
Processing integrity - The accurate, complete, and timely processing of data done with proper authorization.
Availability - The system is available to meet operational and contractual obligations.

IMPROVEMENT ON FINANCIAL REPORTING

Improvement of FR can be done in many ways, most importantly, by overcoming the flaws in today's corporate world.

We can refer to few of the following points which can revolutionarise the way we used to present financial reporting:

1) Data Security and Smart preservation

2) Implementation of latest technological advancements and using the influence of data analytics.

3) Closely monitoring the objectives, strategies & policies of the organisation and implementing them to provide better representation of facts

4) Proper Auditing practices to ensure true & fair view of the financial information.

5) Proper organization of data among branches, departments & subsidiaries.

6) Synchronisation of efforts to a single direction of accounting and the management of the organisation.