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Accounting Information Systems

IT is continually changing the nature of accounting and the role of accountants. Write a
two-page report describing what you think the nature of the accounting function and the
AIS in a large company will be like in the year 2030.
In the year 2030, I see the accounting function having evolved to a fully virtual or online based
environment. This would be made possible by the technological innovations that would have
been made. As we see today, businesses have evolved from the traditional shopping at a physical
store to the now widely used online shopping models. The convenience brought about by this
innovation, have enabled users to buy and sell their products at the comfort of their homes.
To the companies, this has enabled them to increase their customer base since online platforms
can be accessed by anybody in any location on the planet. The increase in market also translates
to increase in profits; which is essentially the goal of any business.
The accounting function will change in nature in many ways. The accountants would be required
to understand how to operate AIS software having gone through training of the same. I think that
it will not be enough for one to only know or learn about the conventional means of accounting
such as being entry clerks or inputting journal entries. It would be a requirement that they know
how to operate an AIS because it will become part of every function of their work.
I think that their work would change massively for example from being entry clerks because
there would be machines that would do these tasks. Their work would change to implementation
and maintenance of these AIS machines. I think that the accounting function would change to
include an audit task. They would be required to audit these machines to ensure that they are
accurate and free from manipulation. The auditors would also be responsible to ensure that all
employees who access the system have the appropriate clearance to do so.
In large companies, Accounting Information Systems will be more important because it will
enable the organizations to save money because most of the tasks would be done by machines
hence less workforce to pay. I think that these AIS systems would be integrated into ERP
systems which would help massively in decision making as every aspect of the business is
handled centrally. I also think that education on these systems and how they operate would
evolve from conventionally being taught in tertiary institutions to lower levels of education like
high schools.
With technology and accounting information systems becoming the norm every company will
have to use the system, to reach its profit goals and increase its business. As a result of the
company’s dependency on the systems professional like accountants must learn how to use,
create, and understand those systems. The only way any of this is possible is through the
education of how to work, the benefits, the uses of account information system for a company.
How do an organization’s business processes and lines of business affect the design of its
AIS? Give several examples of how differences among organizations are reflected in their
An organization’s AIS must reflect its business processes and its line of business. For example:
a. Manufacturing companies will need a set of procedures and documents for the production
cycle; non-manufacturing companies do not.
b. Government agencies need procedures to track separately all inflows and outflows from
various funds, to ensure that legal requirements about the use of specific funds are
c. Financial institutions do not need extensive inventory control systems.
d. Passenger service companies (e.g., airlines, bus, and trains) generally receive payments in
advance of providing services. Therefore, extensive billing and accounts receivable
procedures are not needed; instead, they must develop procedures to account for prepaid
e. Construction firms typically receive payments at regular intervals, based on the
percentage of work completed. Thus, their revenue cycles must be designed to track
carefully all work performed and the amount of work remaining to be done.
f. Service companies (e.g., public accounting and law firms) do not sell physical goods and,
therefore, do not need inventory control systems. They must develop and maintain detailed
records of the work performed for each customer to provide backup for the amounts billed.
Tracking individual employee time is especially important for these firms because labor is
the major cost component.
The value of information is the difference between the benefits realized from using that
information and the costs of producing it. Would you, or any organization, ever produce
information if its expected costs exceeded its benefits? If so, provide some examples. If not,
why not?
Most, if not all, organizations produce information only if its value exceeds its cost. However,
there are two situations where information may be produced even if its cost exceeds its value.
a. It is often difficult to estimate accurately the value of information and the cost of
producing it. Therefore, organizations may produce information that they expect will
produce benefits in excess of its costs, only to be disappointed after the fact.
b. Production of the information may be mandated by either a government agency or a
private organization. Examples include the tax reports required by the tax agencies like
KRA and disclosure requirements for financial reporting.