Accounting Information System


Assessment 1 – Questions & Interview

Question 1: What role do accountant’s play in today’s information intensive organizations?

Question 2: How can an accounting information system provide management with information for better decision-making?

Question 3: Explain the three fundamental benefits of information technology to accounting information systems.

Question 4: Identify the components of an accounting information system.

Question 5: How can an AIS add value to the organization?

Question 6: How can a well-designed AIS improve the efficiency and effectiveness of a company’s value chain?

Question 7: Discuss the seven characteristics of useful information.

Question 8: Explain what an AIS is, describe the basic tasks it performs in an organization, and give some examples of the types of accounting transactions it processes.

Question 9: How can the value of the information produced by an accounting information system be determined? What would a measurement and verification expert think about quantification and verification of such information?

Question 10: You are an intern at a small mom-and-pop type corner grocery store. The owner’s accountant is trying to talk the owners into purchasing an integrated enterprise system for small businesses. The owner thinks the accountant is just trying find a way to charge more money. How would you convince the owner each piece of the integrated enterprise system would help the business?

Question 11: What are the three vital functions accounting system servers? Please define each.

* Learners and assessor should refer to the assessment evidence checklist & record as below:

Assessment Task 1 Assessment Evidence Checklist & Record

Learner’s ID: ______________________

Learner’s Name: ___________________________________

Performance & Knowledge Evidence C/NYC Comments
Identify and document record and systems requirements   
Evaluate alternative systems and acceptance test systems    
Outline the key features of statutory requirements, codes of practice and organisational policy and procedures relating to accounting systems    
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Question 1
An accountant is the practitioner of accounting which is the process of identification, measurement and communication of economic information relating to the business of a firm to allow the users of information to make informed decisions. Accounting has various branches such as management accounting, financial accounting, cost accounting etc. For all these areas of accounting, accountant performs various roles and functions but the prime role of accountants is to collect, process and provide necessary financial information to the intended users of his services so that correct information is communicated at the correct time to the correct places about the entity’s business and its related areas.

Question 2:
In order to cope with the rapidly changing business environment, business managers require an adequate source of information that can support their regular decision making. Accounting information system is of those tools that can serve their information needs. It is a system under which entity’s accounting information is identified, measured and recorded to be communicated in the form of various reports to the users. AIS provide such accounting information that helps managers at each level in the business to manage their operations and functions in accordance with the overall financial goals and targets of the entity (Salehi, Rostami & Mogadam, 2010).

Question 3:
Benefits of information technology to AIS:

  • Security: The information technology is used to safeguard the accounting information systems of the organization as such information system contains valuable and significant accounting and financial information relating to the business of user entity. Information technology provides various tools and methods of information security such as biometric devices, password protected systems.
  • Internet: The information technology has introduced the concept of internet that makes the accounting information system innovative as it gets easier to collect and share the useful information within and outside the user entity.
  • Cloud computing: Information technology enables the use of AIS without investing huge cost in acquiring accounting software. They can rather be accessed from the cloud (online platform).

Question 4:
There are mainly 6 components of accounting information system:

  • People: Those who operate such accounting software systems in their business.
  • Procedures: It includes both manual and automated procedures of collection, processing and storage of data relating to organization’s economic and other activities.
  • Data: About entity and its business activities.
  • Software: It is used to process the data of user organization. < /li>
  • Information technology infrastructure: It includes computer and its peripheral devices as well as network communication devices.
  • Internal controls and the security measures: To safeguard data in AIS.

Question 5:
AIS can add value to any business organization by improving its decision making process through the provision of necessary information on the right time to the right persons (Roska & Bubic, n.d.). It can improve the accuracy of financial results of the company as humans are prone to errors which the use of machines can prevent. Further, it allows the users to take advantage of artificial intelligence and use the knowledge of experts in performing their functions. Use of AIS also promotes speedier processing of accounting information in real time.

Question 6:
AIS can enhance the efficiency and effectiveness of value-chain of company by providing the useful information to improve the quality of products and services at the lower costs (Hall, 2012). It can be designed to enable the users to directly access the inventory system as well as the system of sales order entry so that they can undertake more of the work that is traditionally done by selling & marketing and administration department. It allows quick orders placing and labour cost cutting and creating more values to the customers to satisfy them by fulfilling their requirements on quick basis (Sajady, Dastgir & Nejad, 2008).

Question 7:

  • Reliable: The information must be accurate and verifiable. It must be in consistence with the fact.
  • Relevant: It must be related to the area of user’s functions and responsibilities and must be capable of influencing his decision making.
  • Concise: It must be sufficient enough hence it must not cover the immaterial facts.< /li>
  • Complete: It must contain all the necessary facts that help the managers in problem solving and decision making.
  • Understandable: It must be presented in the format and mode that is easily understood by users.
  • Updated: Information must be available on time whenever required. It must also be up to date.
  • Cost effective: It must be created and communicated at reasonable cost.

Question 8:
Accounting information system is the system developed with the use of information technology that aids the managers in making various sound economic decisions for their business by providing them relevant and necessary information, n.d.). It basically performs the task of identification, measurement and recording of the accounting information that can be disseminated to the users in the forms of various accounting and financial reports. It processes significant accounting transactions undertaken by business organization such as sales, purchases and inventory management etc. For example: it records all the data relating to the sales made during a particular year such as amount collected, amount due, name of customers etc.

Question 9:
To obtain information from the use of accounting information software involves cost of obtaining as well as maintaining such AIS and information provided by it. These costs involve investments in user’s training and acquiring of various hardware and software on a regular basis. Therefore the cost of such information is quantifiable to an extent. However, some benefits of using such AIS involve use of various estimates and assumptions. Hence the quantification and measurement of such information depends upon the accuracy and reliability of such assumptions. The usefulness i.e. the relevance of information in decision making will determine its value.

Question 10:

Integrated enterprise system is the use of various software and hardware systems of computer in the business to enhance the operational efficiency of the business. These systems help the managers in conducting their business functions more effectively and efficiently. In the current case of Mom and Pop, a small business organization dealing in grocery items, the implementation of integrated enterprise system will support its growth to a great extent. It will help in maintaining the adequate records of significant economic transactions undertaken by the business (Lim, 2013). It would rather be a cost effective decision to implement such system as it will allow the manager to perform more appropriately with the use of accurate information provided by such system (Onaolapo & Odetayo, 2012)

Question 11:
Storage: The most important function performed by accounting system servers is the storage of relevant data relating to entity’s financial activities.

Processing: The second vital function of accounting system servers is to accurately record and process the data so as to extract useful accounting and financial information from it for the users.

Information supply: Another vital function performed by accounting system servers is to provide necessary information to the users of such systems so that they can undertake effective decision-making in regards to their business.

References:, n.d. What are Accounting Information Systems? Available at:> Accessed on 25-01-2018.

Hall, J.A., 2012. Accounting information systems. Cengage Learning.

Lim, F.C., 2013. Impact of Information Technology on Accounting Systems. Asia-pacific Journal of Multimedia Services Convergent with Art, Humanities, and Sociology, 3(2), pp. 93-106.

Onaolapo, A.A. and Odetayo, T.A., 2012. Effect of Accounting Information System on Organisational Effectiveness: A Case Study of Selected Construction Companies in Ibadan, Nigeria. American Journal of Business and Management, 1(4), pp.183-189.

Roska, V. and Bubic, J., n.d. Accounting Information Systems for Management Decisions: Empirical Research In Croatia (a). Available at :<> Accessed on 25-01-2018.

Sajady, H., Dastgir, M. and Nejad, H.H., 2008. Evaluation of the effectiveness of accounting information systems. International journal of information science and technology, 6(2).

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.

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.

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