This chapter also provides a command-line reference.
For the data to be useful, it must be complete, correct and relevant. On the other hand, examples of data that would not go into an AIS includes memos, correspondence, presentations and manuals. Before there were computers, AISs were manual, paper-based systems, but today, most companies are using computer software as the basis of the AIS.
Quality, reliability and security are key components of effective AIS software. Managers rely on the information it outputs to make decisions for the company, and they need high-quality information to make sound decisions.
AIS software programs can be customized to meet the unique needs of different types of businesses. The system could even be outsourced to a specialized company.
For publicly-traded companies, no matter what software program and customization options the business chooses, Sarbanes-Oxley regulations will dictate the structure of the AIS to some extent.
This is because SOX regulations establish internal controls and auditing procedures that public companies must comply with. Information Technology Infrastructure Information technology infrastructure is just a fancy name for the hardware used to operate the accounting information system.
In addition to cost, factors to consider in selecting hardware include speed, storage capability and whether it can be expanded and upgraded. Perhaps most importantly, the hardware selected for an AIS must be compatible with the intended software. One way businesses can easily meet hardware and software compatibility requirements is by purchasing a turnkey system that includes both the hardware and the software that the business needs.
Purchasing a turnkey system means, theoretically, that the business will get an optimal combination of hardware and software for its AIS. A good AIS should also include a plan for maintaining, servicing, replacing and upgrading components of the hardware system, as well as a plan for the disposal of broken and outdated hardware so that sensitive data is completely destroyed.
Internal Controls The internal controls of an AIS are the security measures it contains to protect sensitive data. These can be as simple as passwords or as complex as biometric identification.
An AIS must have internal controls to protect against unauthorized computer access and to limit access to authorized users which includes some users inside the company.
It must also prevent unauthorized file access by individuals who are allowed to access only select parts of the system. An AIS contains confidential information belonging not just to the company, but also to its employees and customers.
This data may include Social Security numbers, salary information, credit card numbers, and so on. All of the data in an AIS should be encrypted, and access to the system should be logged and surveilled. System activity should be traceable as well.
An AIS also needs internal controls that protect it from computer viruses, hackers and other internal and external threats to network security.
It must also be protected from natural disasters and power surges that can cause data loss. A third use for an AIS is that when a business is in trouble, the data in its AIS can be used to uncover the story of what went wrong.
The cases of WorldCom and Lehman Brothers provide two examples. It took extraordinary effort to untangle these systems to obtain the necessary information.
The Collapse of Lehman Brothers. The Bottom Line The six components of an AIS all work together to help key employees collect, store, manage, process, retrieve, and report their financial data.
Having a well-developed and maintained accounting information system that is efficient and accurate is an indispensable component of a successful business. Trading Center Want to learn how to invest? Get a free 10 week email series that will teach you how to start investing.
Delivered twice a week, straight to your inbox.Aug 01, · Accounting provides companies with various pieces of information regarding business operations.
It is often conducted by a company's internal accounting department and reviewed by a public. The American Accounting Association is the largest community of accountants in academia. Founded in , we have a rich history built on leading-edge research and publications.
Based on literature from the domains of organization science, marketing, accounting, and management information systems, this review article examines the theoretical basis of the information overload discourse and presents an overview of the main definitions, situations, causes, effects, and countermeasures.
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