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Answer:
A system as according to James Hall (1999) is defined as a set of
interrelated components that interact to achieve a goal or to serve a
common purpose.
An information system is then a set of formal procedures by which data is
collected, processed into information and distributed to the users.
According to Gelinas(1999), a system can only be if it contains more than
one part with each part functioning independently of the others though all
parts serve a common objective as shown below.
Input
process
output
The input represents the economic events that take place in business for
example the gathering of elements of financial statements by the
accountants like assets and liabilities, the processing stage represents
the recording, journalising and posting information, then the output
represents the reports that come out for example the statements of
financial position. An information system comprises of two broad systems
which are accounting information systems (AIS) and management
accounting information systems (MIS).
Users of AIS:
Users of AIS are many and they use it for various reasons. Some need the
information for internal use and others for external use. Suppliers and
creditors mainly need to know about a companys financial position. They
need to know whether a company is liquid and solvent enough to meet its
obligations when they are due.
Management need the AIS to get enough information for making
economic decisions. Shareholders are also concerned as they need surety
that the company in which they have entrusted their wealth is reliable.
The government needs this information as well for security reasons and
tax purposes.
These are the computer programmes and software used to process data
so as to come out with the required information for example omni and
pastel which is used by most organisations in Zimbabwe like Ernest and
Young company.
Information technology infrastructure
These are the hardware used to operate the system meaning the
equipment that make up the physical components of a system. These
allow data to be entered, retrieved and stored.
Internal control
These are the security measures to protect sensitive data for example the
use of passwords to check on the people that have accessed the system,
the information they wanted and as well the time they did so and this will
be to most organisations by use of the database security as it protects
data from corruption and theft.
A well designed AIS successfully performs the following duties;
It captures data on the elements of financial statements, that is it has to
document changes in assets, liabilities, equity and other transactions
using either the debit or credit or the negative(-) or positive(+), this will
be on the processing stage of the system.
It also transmits the data into relevant and reliable information and does
this in a reasonable time, it outputs information that is beyond the
financial statements, as according to Vaassen(2004), for example
transaction histories and customer characteristics.
It as well recognises and adapts to the cost benefit constraint. AIS is all
about choices and trade-offs as stated by Gelinas (1999), what should l
capture?, what information technologies should l use?, therefore in doing
all this, information is obtained and the benefit of having this information
must outweigh the costs.
However no AIS is completely successful or totally unsuccessful as stated
by James Hall(2005), it can also be successful if it achieves most of the
goals set out for it.
Usefulness of AIS:
Usefulness of MIS:
MIS ensures a good SWOT analysis for the business according to Eddy
Vasseen(2004) since it considers both financial and non-financial practises
. A business is bound to having quality decisions because it obtains from
its information the real strengths, weaknesses, opportunities and threats
and hence the decisions made from the real information are more reliable
in terms of status of the business, whether it is still able to perform
operations or not.
MIS gives rise to a good communication base and better planning in the
business. In a business, MIS operates with the use of bottom up and top
down information flow when gathering data to input in the system thus
the lower level employees have more to communicate with the upper
level management as they share ideas hence planning comes up through
making use of a variety of ideas as well as the decision support system
(DSS), and quality decisions are made.
MIS also reduces the problem of human error, this is possible as there will
be no use of human judgements and interpretations which are mostly
biased. An example can be when there is a decline in the sales levels in
business, one can simply blame the sales representatives but after use of
MIS it can be discovered that the problem maybe a change in the seasons
or consumer tastes and preferences.
computers as input, these computers then process the data for example
assets, equity and liabilities with the help from software packages like
pastel and then produce the statement of financial position as output.
Conclusion:
Conclusively, it can be deduced that MIS and AIS complement each other.
For information from AIS to be relevant it requires some significant
support from MIS, which is the same for AIS which requires support from
MIS for it to be effective and efficient, hence both the systems are useful.
References
Accounting information systems, 3rd Edition, Eddy Vaassen(2004)
United Kingdom.