27-06-2013, 02:43 PM
Accounting Information System & Financial Information System
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ACCOUNTING INFORMATION SYSTEM
AIS combine the study and practice of accounting with the design, implementation, and monitoring of information systems. This system use modern information technology resources together with traditional accounting controls and methods to provide users the financial information necessary to manage their organizations.
Today, accounting information systems are more commonly sold as prebuilt software packages from vendors such as Microsoft, Sage Group, SAP and Oracle where it is configured and customized to match the organization’s business processes.
As the need for connectivity and consolidation between other business systems increased, accounting information systems were merged with larger, more centralized systems known as ERP.
AIS TECHNOLOGY
Input:- The input devices include standard personal computers; scanning devices for standardized data entry; electronic communication devices for electronic data interchange (EDI) and e-commerce.
Process:- Basic processing is achieved through computer systems ranging from individual personal computers to large-scale enterprise servers. However, conceptually, the underlying processing model is still the "double-entry" accounting system initially introduced in the fifteenth century.
Output:- Output devices used include computer displays, printers, and electronic communication devices for EDI and e-commerce. The output content may encompass almost any type of financial reports from budgets and tax reports to multinational financial statements
EFFECTIVE IMPLEMENTATION OF AIS
When an AIS is initially implemented or converted from an existing system, organizations sometimes make the mistake of not considering each of these six components and treating them equally in the implementation process.
The steps necessary to implement a successful accounting information system are as follows:-
Detailed Requirements Analysis:- where all individuals involved in the system are interviewed. The current system is thoroughly understood, including problems, and complete documentation of the current system—transactions, reports, and questions that need to be answered are gathered. What the users need that is not in the current system is outlined and documented. Users include everyone, from top management to data entry.
FINANCIAL INFORMATION SYSTEM
FIS is the main depository of data used by Companies for financial management and reporting functions.
The primary functions of FIS include:-
Recording of all financial transactions in general ledger accounts.
Generating financial reports to meet management and statutory requirements.
Controlling overall spending.
FIS is comprised of three SAP components. This section focuses on how they work individually and how they relate to each other. The three components are:
COMPONENTS OF FIS
Financial Accounting (FA)
FA is used to record all financial transactions in general ledger
Funds Management (FM)
FM is used to identify the source of funding as well as control overall spending.
Controlling (CO)
CO is used to track revenues and expenses based on specific reporting requirements, i.e. by department or specific activity.
Financial Accounting
General Ledger : a collection of accounts used to record and classify all financial transactions as either asset, liability, revenue or expenses.
Assets (account numbers 100000 – 499999)
Liabilities (account numbers 500000 – 599999)
Retained Earnings (account numbers 600000 – 699999)
the cumulative “life-to-date” total of all annual surpluses and deficits over the years.