Question 1: What role do accountant’s play in today’s information intensive organizations?
The accountant has the role of staff function in any organization as they are not the part of revenue generating divisions of the businesses. However, they have important role in information intensive organization for evaluating the financial and operating performance of the companies. The complex business structure of the companies is required to be monitored by the various departments along with different viewpoints. Moreover, the accountant provides the financial data management by means of collecting and maintaining the accounting data. Further, such recorded data is helpful in analyzing operational and financial efficiency of the organizations. The analysis helps in decision-making of the business operation of the managers. The accountant has the role to provide the input data to the management in analyzed way where the key indicators of operation and others performance related metrics can be found for decision-making (Smith & Binti Puasa, 2016). The information intensive organizations require capturing right information and sharing the same to the right people at right time rather gathering more information. The accountant has the role of managing information in such way so that management might find the right information at the right moment.
Question 2: How can an accounting information system provide management with information for better decision-making?
The accounting information system (AIS) comprises of information related to the accounting transaction as well as the operating expenses of the business. Moreover, the accountants also keep records of the capital expenditure and estimation of return on investments. Further, the costing information is also derived by the accountant for measuring the margin of profit or efficiency of the any division in profit-making (Diatmika et al. 2016). Therefore, the AIS is important in decision-making as it provides data regarding costing, operational efficiency, capital expenses, cash flows, requirement of working capital and cost of capital. Hence, the management might make decisions related to capital budgeting, pricing, value addition to the loyal customers, inventory control and manage the human resources. The application of AIS is dependent on the transaction data of the businesses for gathering information related to operation such as inventory management, operating efficiency, budgeting, cash flow control and pricing of the products. The gathered information helps the management in decision-making by providing right direction as well as flaws in the business process.
Question 3: Explain the three fundamental benefits of information technology to accounting information systems.
The three fundamental benefits of information technology for AIS are providing information storage system, assisting with decision-making tools and assisting in business process of the companies. The information storage is the basic application of information system that provides the data for AIS for analysis purpose. Further, the decision-making process is triggered with the information system as AIS gathers data from the system. The last fundamental benefit is providing assistance with the business process as information system can send and deliver right information to the right person at the right time to the significant people associated with the businesses (Romney et al. 2000).
Question 4: Identify the components of an accounting information system.
The accounting information system comprises of several components such as information system, database, tools for analyzing data, receiving and data capturing system, transaction tracking system, operational process system and risk measurement system. These components are connected with each other for creating successful AIS. There are software based components such as database system, information system, data transmission system and others. All of these components are designed on basis of the requirement of the AIS and possess different features for different environment.
Question 5: How can an AIS add value to the organization?
AIS has the power to add value to the organization in many ways. The first application of the AIS is to provide support of decision-making to the management regarding operational as well as capital budgeting. The system of accounting and associated information system helps to gather and analyze large amount of data for the measuring the organizational effectiveness and efficiency (Bodnar & Hopwood, 2012). Hence, the AIS of the organizations provide the management key input at the right moment for making right decision. Such application is valuable for the sustainability of the firms for long-term. Moreover, business process also improves due to application of AIS. The AIS may detect the loyal customers by finding the repeat customers along with understanding the consumer behavior of a period.
Bodnar, G. H., & Hopwood, W. S. (2012). Accounting information systems. Upper Saddle River: Pearson.
Diatmika, I. W. B., Irianto, G., & Baridwan, Z. (2016). Determinants of Behavior Intention Of Accounting Information Systems Based Information Technology Acceptance. Imperial Journal of Interdisciplinary Research, 2(8).
Romney, M. B., Steinbart, P. J., & Cushing, B. E. (2000). Accounting information systems (pp. 638-641). Upper Saddle River, NJ: Prentice Hall.
Smith, J., & Binti Puasa, S. (2016, February). Critical factors of accounting information systems (AIS) effectiveness: a qualitative study of the Malaysian federal government. In British Accounting & Finance Association Annual Conference 2016.