Lecture 4- The Information System: AIS Framework

AN Information System Framework

Lecture 4- The Information System: an Accountant’s Prospective: Accounting information System Framework: An accounting information system (AIS) is a system of collecting, storing and processing financial and accounting data that is used by [decision maker]]s. An accounting information system is generally a computer-based method for tracking accounting activity in conjunction with information technology resources.

Accounting information system (AIS Framework) ,e commerce and accounting information system case study solutions course is being taught in many university at undergraduate level to BBA.BCOM. MCOM, MIT, and many other classes.

Similarly In this category we will provide you best handouts of AIS course , AIS and E commerce from best recommend books like James Hall, and Daniel.

Moreover Handouts will be the best source of preparation and learning.

AIS Processes both type of Financial and non-Financial Transactions. For updating a Customer Information in a non-financial transaction but it is necessary to complete it for any AIS for better and accurate reporting.

Management Information System (MIS) 

AIS Framework are not sufficient for any organization to completely fulfill its informational needs. However Managers often require more information than it is provided by AIS. As organizations and managers requires more bulky and complex information regarding specialized functional areas, production planning and control, sales forecasting and inventory warehouse, Management information system centers the areas. Moreover Figure 1 shows the functional areas and subsystems of MIS that performs in different functional areas of an organization.

Lecture 4- The Information System: an Accountant’s Prospective: Accounting information System Framework

AIS Framework Subsystems: Transaction Processing System (TPS)

TCP supports daily business activities and generated many reports, documents, and information for users throughout the organization. TCP is central to the overall function of the information system. It processes such operations with frequent occurring business events. A firm may process thousands of transactions daily. Related transactions are grouped into Cycles. TPS Consists of three transaction Cycles that are

  • Revenue cycle
  • the expenditure cycle
  • conversion cycle ( converting one type of transaction to another types)

Each Transaction cycle records and processes different types of financial transactions. TCP performs following key operations are;

  • Converting economic events into financial transactions
  • Recording financial transactions in the accounting records (journals and ledgers)
  • Distributing essential financial information to operations personnel to support their daily operations

AIS Framework Subsystems: General Ledger/Financial Reporting Systems

The general ledger system (GLS) and financial reporting system (FRS) are two closely related subsystems. Based on their operational interdependency there are considered as a single integrated system and called General Ledger/Financial Reporting System. It takes bulk of inputs that comes from the TPS. It summarizes transaction cycle activity and update the general ledger control accounts.

General Ledger/Financial Reporting Systems deals with the operations with less frequent occurrence such as stock transactions and claim settlements. The financial reporting system measures and reports the status of financial resources and the changes in those resources. The FRS communicates this information primarily to external users. Much of this information consists of traditional financial statements, tax returns, and other legal documents.

AIS Subsystems: Management Reporting System(MRS)

MRS provides the internal financial information needed to managers and business. Similarly Managers will have to deal with many day-to-day business problems to plan and control their daily operations. Hence they require different information for the various kinds of decisions they make. Information include budgets, variance reports, cost-volume-profit analyses, and reports using current (rather than historical) cost data

WHAT Is SOX-wikipedia.org

“The Sarbanes–Oxley Act of 2002 (Pub.L. 107–204, 116 Stat. 745, enacted July 30, 2002), also known as the “Public Company Accounting Reform and Investor Protection Act” (in the Senate) and “Corporate and Auditing Accountability and Responsibility Act” (in the House) and more commonly calledSarbanes–Oxley, Sarbox or SOX, is a United States federal law that set new or expanded requirements for all U.S. public company boards, management and public accounting firms. However there are also a number of provisions of the Act that also apply to privately held companies, for example the willful destruction of evidence to impede a Federal investigation.”

Why Is it Important to Distinguish between AIS and MIS

SOX legislation enforces that management must design and implement such systems that can ensure internal controls for entire financial reporting process. However financial reporting system, the general ledger system, and the transaction processing systems provides data for financial reporting and MIS takes decisions on the basis processed information based on this data. Moreover SOX further enforces that there must be some certification auditing about these control effectiveness by the external. It is mandatory model to meet by SOX for critical management and audit responsibilities.

There are many functions of accounting information system . Similarly The functions offered by accounting information system are now available in many accounting information system software. Moreover You can use accounting information system software to accomplish or to complete your different accounting information system projects.

Recommended Books/resources by theITeducation.com :

  • Accounting information system by James Hall
  • http://www.slideshare.net/HabibUllahQamar/lecture-4-the-information-system-ais-framework

Author: Habibullah Qamar

Its me Habib Ullah Qamar working as a Lecturer (Computer Sciences) in Pakistan. I have an MS(M.Phil) degree in computer sciences with specialization in software engineering from Virtual University of Pakistan Lahore. I have an experience of more than 15 years in the filed of Computer Science as a teacher. Blog Writing is my passion. I have many blogs, This one is special made with the aim of providing 100% Free online coaching and training to the students of under-graduate and postgraduate classes. Most of the students enrolled in computer sciences, information technology, software engineering and related disciplines find it difficult to understand core concepts of programming and office automation. They find difficult in understanding and solving their assignments.