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Modern Technologies in Business Management: Accounting Information System
For an accounting degree to be recognized by an Australian professional bodies like ASCPA, ACA and NIA, it must include an information systems unit. Information systems unit is the way in which a business firm keeps and maintains its books of accounts. The well maintained books of accounts form part of business firms database which help the stakeholders of the business firm to make well informed decisions.
The system involves the data inputting, processing and outputting for end results by using modern technology in information and communication. These resources are backed up by the usual traditional accounting concepts and controls in order to give out better financial information for better business management (www.highbeam.com ).
Understanding the accounting information system saves much time to an accountant since the data entry processing time is minimized. In doing so, the accountant is saved much time that he/she can utilize to do other productive work in the office. The way this system works coordinates all the departments in the business firm. The daily operations are summarized with speed and the financial reporting becomes easy. If an accountant is well conversant with the system, his/her performance becomes easy to track and hence control checks are easier to install. Reporting by an accountant becomes even easier and such information helps management to make the right decisions since the system provides many schedules if demanded (www.highbeam.com ).
Due to the modernization through automation, business firms are changing their operations, for instance, the way internal controls are now being conducted. The auditors are demanding auditing firms through computers and hence with such, an accountant will have no choice but to get to understand the accounting information systems. The system has been seen to save costs and at the same time resulting into accurate information (Ken, 2005).
A significant development in computing over the past twenty years has been the widespread adoption of relational database. Relational database is the way the database are grouped according to the attributes that are in the data set of our concern. This helps people to understand the data much easier since the data is now organized. For instance, a data set containing all the motor vehicles transactions in a country can be categorized by the year of manufacture; or the make of the vehicle; or by the color. Thus the data is grouped in more relational manner. Tables are now being used to display the information concerning personal details in the registration of persons department, car manufacturing companies and logistical information (www.highbeam.com ).
A revenue cycle is a department in a business firm that is charged with the responsibility of accepting customer orders, writes invoices and collects the receivables from the debtors. To demonstrate how the relational database works, we take the following table from the revenue cycle of a certain company which is used for data processing and at the same time used as the database for the debtors.
The company has an accountant who is responsible for all the transactions relating to the companys debtors. The accountant has to develop a database in order to refer to whenever there is a query by either the management or the debtor. For easier reference, relational database is the best tool to use. The database consists of: Name, money received, date, discount given, balance and region where the customer comes from.
Since the use of computers became widespread in business, the role of accountants has fundamentally changed. The core role of an accountant of book-keeping and eventual preparation of financial statements has changed by far due to information technology advancement. The paper work is no longer part of accountant since very many soft-wares have been developed to take care of that and hence the labor cost has really reduced and hence profitability of firms improved. The other part that is affected is the audit work by an accountant. One of the principle audit requirements is the accuracy and relevance of the available information (Ken, 2005).
For it to reflect a true and fair position of a business firm all the available data should be accurate and relevant. All this data is safely stored n a computer and is readily available whenever required. The scope work of the accountants have decreased since almost every transaction is automated and in a business firm. This has led to changing of the manner in which reporting is carried out to facilitate quick decision making (Esha).
Competitive pressures have forced business to become more efficient and more focused on the needs of the customer. Enterprise Resource Planning has been employed in business firms in order to help these entities become more efficient. Enterprise Resource Planning is businesss system of planning how its resources are to be acquired and transformed. This is very helpful to businesses that have a single database for their entire operations.
This has helped business firms to become efficient by storing and retrieving information quickly in real-time operation. It has enabled firms to share information and hence reduced the tendency of work duplication. In so doing, the customer service has improved since there are no frequent referrals whenever a customer needs to enquire about his/her account in the firm (Esha).
References
Accounting Information Systems. 2008. Web.
Ken, C. (2005). Understanding Business Processes. Journal of Applied Management Accounting Research, 30, 100-234.
Eshai, M: Professional accountant and the technological environment. 2008. Web.
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