ACC 400 Accounting Information Systems

For this assignment you should choose a business sector (such as hotel, bank, manufacturing etc.) and prepare a report describing

 

1) the characteristics of information useful to that sector,

 

2) explain the basic accounting information system (AIS) functions for that sector,

 

3) critically discuss the role of AIS in a company value chain and

 

4) evaluate the ways in which and AIS can provide management with information for decision making. The information in your paper will be based on research you conduct by reading text books, papers and websites and talking with a person that uses such a system in your chosen sector.

 

You should primarily discuss the features needed for the sector chosen. But, you should also discuss any other important issues that you find while conducting your research.

Introduction

Accounting information system is very important for all the organization and every organization whether profit or non-profit are mandatorily required maintaining accounting information. The report describes useful characteristics of information necessary for manufacturing sector by explaining the functions of the manufacturing sector (Abduljalil, &Zainuddin, 2015). The report will be based on the critical discussion of the role of accounting information system in an organization’s value chain and will evaluate the process through which accounting information system can offer management with necessary information for decision-making.

Characteristics of information useful in manufacturing sector:

Accounting information is viewed as the structure through which the accounting information system is captured, processed and reported. The accounting information system of manufacturing sector can be characterised as a system that collects and stores the useful data concerning an events, resources and agents. The AIS transforms the information, which the management can use to make the decisions concerning the events resources and agents (Sudaryanti et al., 2015). Conflict of goal originates when the activities of subsystem are not in place with the other subsystem. Goal correspondence takes place when the subsystem is in line with the company’s goal.

The more a system is complicated the higher will be the difficulty level to attain the goal. In it important in minimizing the duplication of records, storage, reporting and processing helps in promoting integration in manufacturing sector. For manufacturing sector, collection of data regarding an event that takes place, resources that are impacted by such events has been organized and processed to offer meaning to the users. Generally, there is large number of information and translating the same into good decision characterises the usefulness of information to the manufacturing sector. Nevertheless, a manufacturing organization generally suffers from overload of information when a large number of information of is collected (Al-Hiyari et al., 2013). On reaching an overload point, the quality of decision falls whereas the cost of producing the information increases.

Explanation to the basic accounting information system:

Accounting information system can be defined as the tool that is incorporated in the areas of information and technology to assist the managers in implementing control to the organizations economic or financial area. An astonishing advancement in the fields of technology has opened up the opportunity of generating and using the accounting information from a strategic viewpoint. Accounting information system tools are put together so that it can collect information and raw data and transforming the same information into financial information with the objective of reporting that information to the decision makers (Vanhoofet al., 2016). Numerous studies have analysed the effect the accounting information system in a strategic management by assessing the attributes of the accounting information system under several strategic priorities.

AIS also analyses the impact on performance of interaction amid certain types of strategies and different designs of techniques and information. The appropriate designs of accounting information system helps in supporting the business strategies by optimising the performance of the organization (Kaplan & Atkinson, 2015). Therefore, increasing the investment in AIS will assist in attaining a stronger and more elastic business culture to deal with regular changing business environment.

Critical discussion of the role of AIS in the company's value chain:

Accounting information system provides value and it is regarded as the vital part of an organization’s value chain. In regular sense, value chain represents creating the value of the finished components better than the sum of its parts. Value chain represents making an organization faster, making it more dependable, and offering better service, offering something in limited supply and providing the organization with enhanced features or customizing it. The ultimate role of accounting information system is to offer value to its customers (Quynh& Nguyen 2016). A manufacturing business shall only be profitable given the value generated by the organization is higher than the cost of producing its goods and services.

Accounting information system helps in improving the efficiency and lays down the platform for improved decision making through sharing of knowledge and information. Critically speaking, a well-designed accounting information system assists a manufacturing firm in generating profit by improving the efficiency and efficiency of its supply chain. An accounting information system creates value by offering correct and timely data to facilitate the performance of five value chain activities (Nakashima & Okuda, 2016). This is generally done by improving the quality and cutting down the cost of manufacturing the goods and services. These activities are at times referred to be in line with the labour activities. Information technology creates a significant impact on the efficiency and effectiveness through which the preceding activities are executed. A manufacturing company’s value chain can be joined with the value chain of its customers, suppliers and distributors.

Evaluation of AIS and decision-making:

Accounting information system provides the basis for taking structured, semi-structured and unstructured decisions. It characterizes the structured decisions, which are of repetitive and routine in nature by understanding that they can be delegated to the lower level employees in a manufacturing organization. The semi-structured decision is characterised as the incomplete decision, which requires a subjective assessment and judgements to support the formal analysis of data. This consist of setting up the marketing budget for new budget through the help of computer-based decision aids (Hribar et al., 2014). Unstructured decision is characterized as non-recurring and non-routine. Unstructured decision requires considerable amount of judgement and insight. The accounting information system supports the unstructured decision with the help of computer based decision assistance by providing facilities of gathering information from different sources. Hence, accounting information system helps in taking decision, which is related to inventory management, and relates the management control through efficient use of resources to achieve the organizations goals.

Conclusion:

The report has successfully highlighted the usefulness of accounting information system in manufacturing sector since AIS transforms the information, which the administration can use to make the decisions concerning the events resources and agents. Furthermore, AIS creates value by offering correct and timely records to enable the presentation of five value chain activities. Therefore, investment in AIS will contribute in achieving a stronger and more elastic trade culture to deal with systematic business environment.

References

Abduljalil, K. M., &Zainuddin, Y. (2015). Integrating Technology Acceptance Model and Motivational Model towards intention to adopt accounting information system. International Journal of Management, Accounting and Economics, 2, 347-539.

Al-Hiyari, A., AL-Mashre, M. H. H., & Mat, N. K. N. (2013). Factors that affect accounting information system implementation and accounting information quality: A survey in University Utara Malaysia. American Journal of Economics, 3(1), 27-31.

Hribar, P., Kravet, T., & Wilson, R. (2014). A new measure of accounting quality. Review of Accounting Studies, 19(1), 506-538.

Kaplan, R. S., & Atkinson, A. A. (2015). Advanced management accounting. PHI Learning.

Nakashima, M., & Okuda, S. Y. (2016). Implication of Internal Controls System and Accounting Information System.

Quynh Le, H. N., & Nguyen, B. H. (2016). Impacts of Effective Internal Control System and Information Technology on Quality of Accounting Information Systems: The Case of Vietnam.

Sudaryanti, D., Sukoharsono, E. G., Baridwan, Z., &Mulawarman, A. D. (2015). Critical Analysis on Accounting Information Based On Pancasila Value. Procedia-Social and Behavioral Sciences, 172, 533-539.

Vanhoof, E., De Bruyn, P., Aerts, W., &Verelst, J. (2016, May). Building an Evolvable Prototype for a Multiple GAAP Accounting Information System. In Enterprise Engineering Working Conference (pp. 71-85). Springer International Publishing.