Question

discuss why organizations needs accounting information systems (AIs) and better information managment. how important are they and what benefits does the organizations gain from them?

Answer 1

Accounting Information Systems & Better Information management

Accounting information system is a system of collection, storage and processing of financial an accounting information that is used by the the decision makers, Where as better information management is required for control of organizational activities and to control the external and internal influences on business

AIS is generally a computer based method for tracking accounting activity in conjunction with IT resources

Reports can be used internally by management or externally by other interested parties including Investors, Creditors and Tax Authorities.

Elements of AIS :

People

Procedures And Instructions

Data

Software

Information Technology Infrastructure

Internal Controls

Benefits:

1. Better AIS and Management System acumulates and stores data, and process data to provide information for decision makers.

2. AIS can use extremely devoloped technology to enhance efficiency of the entity and its management

3. it can handle the data useful for decicionmaking purpose

4. AIS focuses on different accounting transactions and various other aspects such as payroll, sales, purchases etc.

Components / Subsystems of AIS:

• Budgeting and Planning
• Budgeting Software
• Revenue Management
• Expenses Management
• Electronic Banking
• Cash and Treasury Management
• Bank Reconciliation
• Accounting Software ETC;

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