Definition and purpose of computer accounting information system

Definition and conclude of reckoner story cultivation agreementThis literature re impression go out begins with definitions and the target of (AIS) and discussion of the studies of general IT seeion and then follow-ups studies specific in totallyy foc subroutined on method of accountancy softwargon receiveion. Then it pass on discuss the Uses,development and the stride of AIS. The remainder of this literature review will discuss the effectiveness of accountancy reading agreement.Definition of com posting machine news report info placement (AIS)The computer write up entropy arrangement (AIS) was invented by professor K ben Osterheld, It was apply as a scheme of records for backing keeps to maintain its accounting system. This seize ins the purchase, sales, and different fiscal bringes of the telephone circuit. 1The draw a bead on of AIS is to accumulate entropy and return decision possessrs (investors, creditors, and managers) with data to pat ch up decision, term this was previously a paper-based process, most modern line of workes now utilize accounting packet such(prenominal)(prenominal) as UBS, MYOB etc. 1IT Adoption Factors for computerized accounting 2several(prenominal) studies (Thong 1999 Harrison, Mykytyn and Riemenschneider 1997 Cragg and King 1993 Moore and Benbasat 1991 Treadgold 1990) of IT adoption turn in identified a variety of incite factors. Thong (1999) attempted to consolidate the myriad of IT adoption research by developing an integrated model of reading systems adoption. This model is a utilizable framework in reviewing the variables that impact on business owners decision to adopt IT.Thong categorized the variables into four elements1. characteristics of the organizational decision makers2. characteristics of the technological conception3. characteristics of the organization and4. characteristics of the environment in which the organization operates.According to the literature all of the ab ove characteristics influence, to varying degrees, the owner- managers decision to implement IT.Characteristics of the Organizational Decision MakersIn large businesses teams be typically involved in the IT decision-making process. This is in seam to slight business where the owner-manager is ordinarily the IT decision maker (Thong 1999). In small business, thitherfore, the characteristics of the owner-manager are critical in determining the organisations attitude to IT (Rizzoni 1991). The particular owner-manager characteristics serious to IT adoption are innovativeness, computer self-efficacy, level of IT knowledge, education, and IT training experience (Thong 1999). Compeau and Higgins (1995) define computer self-efficacy as a judgement of ones capability to utilization a computer. Small businesses that have CEOs (typically the owner) that have undertaken computer training and possess computer self-efficacy are much likely to implement IT (Delone 1988, Raymond 1988). Co nversely, owner-managers pot inhibit distributively worthwhile IT achievements through hostility or detachment toward IT (Thatcher and Perrewe 2002).Characteristics of the Technological originationThe characteristics of the technological fundament itself are in addition an important determinant in the decision to adopt IT. Applying Rogers (1983) theory to the adoption of accounting bundle as the innovation, the software moldiness be perceived better than the predecessor system (most likely a manual accounting system) must be consonant with the needs of the adopter, such as capable of handling GST must be easy to learn and engross the results must be apparent and the accounting software should be available on a trial basis.oer the past decade, the advent of powerful, lowly cost micro-computers coupled with user-friendly accounting software, have improved and lifted the barriers to IT innovation adoption. This has led to an incr hush up in the adoption of IT by small business (Thong 1999).Characteristics of the OrganizationThe characteristics of the organization are early(a) variables that influences the decision whether to adopt IT. Organizational characteristics such as business size, employees level of IT knowledge, industry sector, business location, and information-intensity has been analysed in previous research studies (See for arche character references snitch 1999 Burgess 1998 Wenzler 1996 Attewell 1992 Yap 1990 and Delone 1988). Generally, the larger the effect of employees, the greater the sales turnover, the more information-intensive the industry the more likely a small business will adopt IT innovation.Moreover, businesses tend to suffer option poverty (Thong 1999) in cost of financial capacity, available epoch and IT skilled staff to assuage innovation adoption.Characteristics of the EnvironmentThe characteristics of the environment in which the organisation operates relates to variables such as disputation and immaterial agen ts. For example, Link and Bozeman (2001) established that competition leads to innovative technology adoption. Treadgolds (1990) training indicated that small businesses with high IT adoption rates had been influenced by external agents such as trade associations, wholesalers, voluntary groups and franchisors. Wenzler (1996) found that small business customers were a signifi sesst reason for implementing IT, more so than the influence of competitors.This paper broaden the external agent influence to the role of accountants in the decision to adopt accounting software. Many small businesses are impeded by resource poverty, consequently the owner-manager does not have the available time or notes to source, analyze, review and implement software applications. Public Practice Accountants are in a unique position to provide systems analysis, design, implementation and support advice to their clients, thereby spreading the cost of acquiring this expertise among multiple customers. The accountant, therefore, could generally provide this service more efficiently and effectively, than if the small business owner performed the croak himself or herself.Furthermore, at the time of this study, the introduction of the Goods and Services Tax (GST) was an external influence on small business owner-managers decisions to adopt a CAS (see for example Lief 2000).Motivating factors for the adoption of bill software 2The advent of powerful, low cost microcomputers, together with user-friendly accounting software, has allowed a greater number of business to implement IT in recent years (Raymond and Bergeron 1992). The need to facilitate financial focusing is another motivating factor for adopting accounting software (McMahon and Holmes 1991 Gorton 1999). Moreover, almost researchers have identified a link between the use of CAS and enhanced business performance (see Gorton 1999 Smith 1999 and Reid and Smith 2002). An substitute(a) view is that a growing SME faces increased financialchallenges and consequently there is a greater need for careful attention to financial management and financial describe (McMahon 2001).The major(ip) bene rifles of implementing a CAS are to increase business force and to facilitate timely information (Burgess 1997). The impediments to implementing a CAS are lack of time (Proudlock et al. 1999), owner-managers view that the CAS is costly (Head 2000), sensing that the technology is not suited to the temperament of the business (ABS 2000), and lack of IT expertise (ABS 2000 Burgess 1997).Accounting information systems engine room 3Input The input devices that needed win Accounting information systems let instandard personal computers or workstations cart track applicationss postning devices for standardized data entryelectronic conference devices for electronic data interchange (EDI) ande-commerce. impact Basic treat is achieved through computer systems in the personal computers to large-scale enterprise servers. Howe ver, touch model is still the double-entry accounting system . issue Output devices used includecomputer displays,impact and nonimpact printers,electronic communication devices for EDI and e-commerce.The output can be financial reports from budgets and measure reports to multinational financial statements.Uses of AIS 3AISs cover all business functions from backbone accounting transaction processing systems to sophisticated financial management planning and processing systems.Financial reporting starts by capture important business transactions such as normal production, purchasing, and selling activities then these transactions are classified and summarized for intrinsic decision making and for external financial reporting.Cost accounting systems are used in manufacturing and service party. This accounting system will attention these organizations to track (measure) the costs for the production of goods and/or performance of services. In addition,it can provide advanced analyse s tracking the cost of product or service. foc development accounting systems are used for planning, monitoring, and control for a variety of activities . This allows managerial-level employees to have access to advanced reporting and statistical analysis. The systems can be used to gather information, to develop various scenarios, and to choose an optimal answer among alternative scenariosDevelopment 3The development of AIS includes five basic phases the time period associated with each of these phases can be as short as a hardly a(prenominal) weeks or as long as several years. This five phases include signifier 1 planning In this phase the entails determination of the eye socket and objectives of the project, the definition of project responsibilities, control aimments, project phases, project budgets, and project deliverables.Phase 2 analysis This phase is used to both determine and inscription the accounting and business processes used by the organization. It include three type of analysis which areData analysis is a thorough review of the accounting information that is currently being collected by an organization. up-to-date data are then compared to the data that the organization should be using for managerial purposes.Decision analysis is a thorough review of the decisions a manager is responsible for making. Then models are created to support the manager in gathering financial and related information to develop and design alternatives, and to make actionable choices.Process analysis is a thorough review of the organizations business processes. These processes can then be modified or reengineered to improve the organizations trading operations in terms of lowering cost, up(p) service, improving look, or improving management information.Phase 3 design The design phase takes the abstract results of the analysis phase then develops and involves the detailed design of all inputs, processing, storage, and outputs of the proposed accounting system.I nputs may be defined using screen layout tools and application generators. bear upon can be shown through the use of flowcharts or business process maps that define the system logic, operations, and work flow.Logical data storage designs are identified by modeling the relationships among the organizations resources, events, and agents through diagrams.Output designs are authenticated through the use of a variety of reporting tools such as report writers, data extraction tools, query tools, and on-line analytical processing tools.Phase 4 ImplementationThe implementation phase consists of dickens unproblematic parts construction and delivery.Construction includes the selection of hardware, software and vendors for the implementation grammatical construction and testing the network communication systems building and testing the databases writing and testing the new program modifications and installing and testing the total system from a technical standpoint.Delivery is the process of conducting terminal system and user bankers acceptance testing preparing the conversion plan installing the production database training the users and converting all operations to the new system.Phase 5 support This phase has two objectives.The send-off is to update and maintain the AIS. This includes fixing problems and updating the system for business and environmental changes. For example, changes in generally accepted accounting principles (GAAP) or tax laws great power necessitate changes to conversion or reference tables used for financial reporting.The second objective of support is to continue development by interminably improving the business through adjustments to the AIS caused by business and environmental changes. These changes might result in future problems, new opportunities, or management or governmental directives requiring additional system modifications.The Accounting information systems is very recyclable for companies and businesses in order to make th e accounting process easier by spacial computer program or other system . Accounting software, make it easier to accumulate financial data for use in taxes, payroll, and other clerking requirements.The step of the accounting system 4Step1 Recording ( recording expenses and profits that are very important to keep on file).Step2 Information processed for use (when processed, it is filed in the areas where it is most important).Sep3 Communication phase (common communications of this data will be used for payroll and tax purposes).In the first step all the data recorded in the accounting system in daily basis or minute by minute as sales, profits, expenses, and many other items will be used for future use in financial reports. Much of this data has to be kept on file for a number of years for example tax purpose.The succeeding(a) step that is taken is processing. In this stage most accounting software or programs, have different files and categories where records can be stored this f iling or storage can be done manually by the idiosyncratic or group of people who work on it and can also be set to do this automatically as information is entered into the system. veritable criteria can be set up in the program to allow the program to place files and data in the places or areas where it is supposed to go.The final step is the process of communicating the data in the area in which it should be communicated. First, and most importantly, tax records that are recorded and processed can be communicated at the time that filing taxes is done. Most corporations communicate there financial information on every quarter basis, other companies especially smaller businesses on an annual basis. In large corporations, like major retailers, there are a lot several smaller stores or branches of the company that must share information through accounting software or systems This information can help the company forecast sales, profits, loss, and a variety of other things. Many co rporations share this information on a daily, weekly, or quarterly basis. The process of communication is probably the most important stage of accounting information systems because this is the point where results are known and records will be put to use.Most of the businesses and corporations now use the accounting system and become galactic part of them. Using resources available through accounting information systems allows major corporations and small businesses to record transactions and other financial information for use in the future. Moreover that the use of the accounting system by this company can makethe process much smoother, save money for the business,and save a great deal of time.easy to file and send documents to the IRS or other interested individuals.no need to take paperwork or other materials to an accountant for tax and payroll purposes.Taking advantage of this type of system can provide many great benefits to a large or small business. Accounting is a very im portant part of running and maintaining a business and the success of a company will often heavily rely on the practices and procedures that are used in the clerking efforts of the company.The effectiveness of the computerized accounting 5(Markus- 1983) shown that successful implementation of accounting systems requires a fit between three factors 17. A fit must be achieved with dominant allele view in the organization or perception of the situation. Second, the accounting system must fit whenproblems are normally solved, i.e. the technology of the organization. Finally, the accounting system must fit with the culture, i.e. Systems will be useful when information provided by them is used effectively in decision-making process by users.(Otley-1980)20 argues that Accounting Systems are important parts of the fabric of organizational life and need to be evaluated in their wider managerial, organizational and environmental context. Therefore, the effectiveness of accounting information systems not only depends on the purposes of such systems but also depends on hazard factors of each organization.(Ives-1983)Accounting information systems are said to be effective when the information provided by them serves widely the requirements of the system users. Effective systems should systematically provide information which has potential effects on decision-making process 12.Accounting information usually is categorized under two groupsinformation that influences decision-making and mainly used for the purpose controlling the organization andinformation that facilitates decision(Huber-1990) 11 argues that, integration of accounting information systems leads to coordination in organization which, in turn, increases the quality of the decisions. (Cameron-1986 / Delone-1992) show that the effectiveness of accounting information systems depend upon the quality of the output of the information system that can satisfy the users needs 3,8.Generally, accounting information syste ms 1) provide financial reports on a daily and weekly basis and 2) provide useful information for monitoring decision-making process and performance of the organization. (Simon-1987) 22 in his study used the first part of the above statement as measure of control for management and the second part for evaluating the effectiveness of the accounting information systems via continuous monitoring.Accounting information system is a computer-based system that (Nicoloau-2000) 19 defines as a system that increases the control and enhances the corporation inside the organization. Management is engaged with different types of activities which require good quality and reliable information. They also need non-financial information such as production statistics, quality of production and so on. However,( Essex and Magal -1998 ) said that quality of information generated from AIS is very important for management 10.(Kim-1989) 13 argues that usage of AIS depends on the perception of the quality of information by the users. Generally the quality of information depends on reliability, form of reporting, timeliness and relevance to the decisions.(Doll and Torkzadeh-1988) 9 for studying the satisfaction of users use some concepts to measure the effectiveness of the accounting information systems. These concepts are information content, accuracy, format, ease of use and timeliness.