Question

what are the five fundamental principles of accounting information system?

Answer 1

The accounting information system's five fundamental principles are as follows:

Control principle:This principle involves that all the accounting information system should have proper internal control.These control would help the manager in controlling and monitoring of the company's business activities.These internal control provide the safeguards and methods which help in achieving the objectives and goals.

Relevance principle: This principle helps in ensuring that the information provided is relevant. This principle requires  that information provided must be timely and should be understandable and useful.

Compatibility principle:This principle states that the accounting information system should match the company's activities, structure and principle.The system must be consistent with the company's objectives and must be operational in the industry under which the company operates.

Flexibility principle:This principle involves that the accounting information system must be capable of adjusting itself to the changes that take place in the company.The changes can be in terms of technical changes, changes in business decisions or changes in environment of the business.The system should be able to adapt itself to the changing requirements.

Cost-benefit principle:This principle states that the benefit provided by any activity in an accounting information system must be more than its cost i.e. the benefits must outweigh the costs.