Question

One function of the accounting information system (AIS) is to provide adequate controls to ensure the safety of organizational assets, including data. Many people, however, often view control procedures as red tape. Discuss how controls can improve the overall efficiency and effectiveness. Why are we concerned with controls in the AIS department?

Answer 1

Accounting Information System

An accounting information system helps in storing, collecting and processing financial data of an organisation to produce reports that can help the organisation to take appropriate business decisions. Its functions include effective and efficient collection of financial data, providing useful information to help in decision making and to make sure that controls are in place to accurately record and process data.
         One of the important functions of an accounting information system is to provide adequate controls. Controls can ensure that the information produced by the accounting system is dependable. It can also ensure that the activities in the organisation are performed efficiently and all of them together contributes to the achievement of the organizational goals. Controls in an accounting information system can also safeguard organizational assets. This can also ensure that unauthorised access to confidential data is prevented.
         An accounting information system not only contains information of the company, but it contains impotent information regarding its employees and customers. Thus, proper implementation of controls in an AIS is necessary. This can act as a security measure to protect sensitive data. Proper implementation of controls can ensure that the likelihood of errors or frauds in the AIS are minimized and the impact of risk is reduced.