COMPONENTS OF ACCOUNTING INFORMATION SYSTEM (AIS)

Accounting information system (AIS) as a sub system of the overall business systems has some components that make it what it is. I have seen some articles on the web where the following; computer, accounting software, scanners and printers are given as the only components of AIS.

Are these groups of people right? Well, you will be the judge after reading this post. One of the characteristics of AIS is that it is dynamic enough to ensure the security of the accounting system of organization while at the same time congruently working with other management tools like; balanced scorecard, variance analysis, contribution analysis, budgeting, etc towards achieving the strategic goal of an organization.

You will agree with me that the four components of AIS that are identified by most highly rated sites and authors has not and cannot achieve the overall objective of a business entity. Come-on Chinweike, enough on this, go straight to the point. Ok, now let’s explore those ingredients that make a whole and complete accounting information system.

WHAT ARE THE COMPONENTS OF GOOD ACCOUNTING INFORMATION SYSTEM?

People: people are the main component of any system. Systems cannot operate itself, not even the most automated system. A lot of people think that AIS is all computerised based. No, the system can be either manual or automated. Having good people to manage other components of the accounting system is very important. The human resource team flex their muscle in hiring and retaining the best of breeds in a company. People are the only asset that a company has that cannot be included in either the asset register or the statement of financial position.

Way of doing things: procedures, policies, instructions and rules all make up good chunk of AIS. People that pilot the accounting system will surely be confused if there are no instructions and procedures to follow. For example, the budgetary control system which is within the AIS will not function properly if there is no procedure to follow through when implementing the functions of budgeting.

Data: this is in the form of information asset. Accounting information system will not be complete without having data that runs through the system. What is the need of having other features and infrastructures without having the data to make sense out of it? An accounting information system will not be complete without having one form of data or the other.

Date management and enhancement software: data management and enhancement tools which come in the form of accounting software and other resources work from the soft side of the system as a whole. The importance of accounting software for example cannot be overemphasised when it comes to developing and designing a company’s financial accounting systems as a whole. You will find out that the whole system will be inefficient and prone to errors and mistake if there are no software that does the routine and mundane part of the system that does not require much input from human beings. It will be suicidal to subject an accounting clerk to the torture of manually perform the calculation aspects of ratio analysis.

Governance and internal control: governance and internal controls are vital operational element of any successfully run organization. For a system to be effective, it has to be imbibed into the overall cultural atmosphere of the organization. These are perfectly captured in the way a business is controlled and managed. Corporate governance which is the system that describes how resources are managed and controlled is a corner stone that an accounting information system cannot deal without.

IT infrastructure: these are the hardware platform that acts as medium through which other components of accounting information system operates. Things like; computers, servers, networking devices (hubs, bridges, routers, and switches), printers, scanners, copier, etc all fall under this category of components.

It the part of the management functions to manage all the above components of accounting information system is an efficient and profitable way in order to achieve the overall goal of an organization. One of the main characteristic of a manager is to have the managerial skill needed in making these components run smoothly.