Question

Pleaes do it by type not pics.

1.There are two primary sources of threats to a system, internal and external. Which is the most significant concern for AIS? Explain.?

Answer 1

MEANING OF ACCOUNTING INFORMATION SYSTEM :-

Accounting information system is the system which collects the transactional data, stores it, classify it, summaries, analyse and communicate the financial statements to the users.

As in short, we can say AIS is the system which completes the process of accounting, the process of collecting the data, records in the books of accounts, classifies and summarise it , to produce the financial information that is useful to its users.

As, In any business and organisations accounting system takes place. Each and every business records financial transactions to make financial information. If any mistake arise in financial information, it will cost to the business, it will affect the owner, management, investors, creditors etc.

There are two primary source of threats to a ACCOUNTING INFORMATION SYSTEM:-

1) INTERNAL SYSTEM

2) EXTERNAL SYSTEM

1) INTERNAL SYSTEM- Internal system is the system inside the business organisation.

Some of the aspects of internal systems-

a) OWNER- Owner is the most important aspect of internal system as it is the owner of the system and the owner invest money or capital in business.

b) MANAGEMENT- Management make effective use of financial information as it takes the best decision from the accounting information.

c) EMPLOYES AND WORKERS- They work for the bonus at the year end therefore, employes etc are interested in financial statements or information.

2) EXTERNAL SYSTEM- System which include the aspects of external business environment.

a)BANKS AND FINANCIAL INSTITUTIONS- Banks and financial institutions is very important external users a it gives loan to the organisation or business whwnwhen it wants.

b) CREDITORS- Creditors are those party who supply goods or services on credit. Before giving credit every Creditors satisfy themselves about the credit worthiness of business. The financial information helps the creditors in this.

C) INVESTORS- Investors also wants to see financial information to decides the rate of return on business.

FOR ACCOUNTING INFORMATION SYSTEM, THE MOST SIGNIFICANT CONCERN SHOULD BE ON:-

BOTH THE SOURCES, as each aspects of both the sources is important in each step. As in internal source contains owner, management and workers . In each step, each and every aspect is giving its contribution to the business organisation. Owner is the basic which starts the business organisation and Management make decisions for the future benifits. If management doesn't make plans the business will go in a hilly way , without any planning goals. And in external aspects , banks are the most important aspect as it gives loan whenever it wants and other aspects are also important as banks.

CONCLUSION-

EACH AND EVERY SOURCE I.E INTERNAL AND EXTERNAL SOURCE AND EVERY ASPECTS OF THEM WORKS FOR THE BUSINESS IN EACH AND EVERY STEPS. WE CAN'T IGNORE ANY ONE OF THEM .SO BOTH THE SOURCES IS SIGNIFICANT CONCERN OF ACCOUNTING INFORMATION SYSTEM.