Q #1 (i): Accounting information system (AIS) is the part of 4th industrial revolution?
An Accounting Information System is part of the 4th industrial revolution because it
integrates cutting-edge technologies, such as AI, cloud computing, and data analytics, to
revolutionize traditional accounting practices. It automates tasks, enables real-time data
access, enhances accuracy, and supports data-driven decision-making, transforming the
way businesses manage their finances in the digital age.
Q #1(ii): What is relationship between 4th revolution and Accounting information system (AIS)?
The 4th industrial revolution and Accounting Information System are closely related
as the revolution introduces advanced technologies that empower the accounting field. The
system utilizes automation, AI, and data analytics to modernize financial processes,
ensuring more efficient and data-driven accounting practices in the digital era.
Q #1(iii): Write 1st, 2nd, 3rd and 4th industrial revolution.
1st Industrial Revolution: The period from the late 18th to early 19th century, marked by
mechanization through water and steam power, transforming agriculture to industrial
economies.
2nd Industrial Revolution: Occurred in the late 19th and early 20th century, driven by
electricity and mass production, leading to rapid industrial growth and transportation
advancements.
3rd Industrial Revolution: Emerged in the late 20th century, with the rise of computers and
automation, revolutionizing manufacturing and communication processes.
4th Industrial Revolution: The current era, characterized by the integration of advanced
technologies like AI, IoT, and data analytics, transforming industries with smart automation
and digitalization.
Q#2: Who are the users of Accounting information system.
--Management: They use AIS to make informed decisions, plan budgets, and analyze
financial performance.
--Accountants: They rely on AIS to record transactions, prepare financial statements, and
ensure compliance with accounting standards.
--Investors: AIS helps them assess a company's financial health and make investment
decisions.
--Auditors: They use AIS data to verify accuracy and assess internal controls during financial
audits.
--Regulators: AIS provides them with financial data to monitor compliance with laws and
regulations.
--Employees: They access AIS for payroll, expense reimbursements, and other financialrelated tasks.
--Suppliers and Creditors: They use AIS to evaluate a company's creditworthiness and
payment history.
--Customers: AIS may impact pricing decisions and customer credit policies, affecting their
interactions with the company
--Government Agencies: Regulatory bodies and government institutions may access AIS
data to monitor businesses, ensure financial transparency, and enforce tax regulations.
Q#3: What are the components of Accounting information system?
The AIS is made up of majority six parts. This are listed below:
i.
ii.
iii.
iv.
v.
vi.
Users: This includes anyone who is using the accounting information system. CFOs
(chief financial officers), accountants, managers, accounting executives, auditors, and
so on. It helps in smooth working & coordination of different departments.
Procedure & instructions: AIS is coded with certain procedures & instructions that
regulate how financial information is collected, stored & processed. These are both
manual & automated methods and can come from internal or external sources.
Data: The accounting system has a database structure to store information in one
central location to keep it easily accessible by all the department. The system will
save each & every piece of information relevant to the company’s finances. This may
include:
 Transaction data
 Sales analysis
 Inventory data
 Payroll information
 General ledger
 Outstanding data
Software: AIS has a software component that’s essential to store & process the data,
analyze it & disseminate the data among the organization.
IT infrastructure: This refers to the hardware that is essential to operate the AIS like
a computer, server, router, barcode scanner, printer, and other components that are
used in daily business operations.
Controls: Accounting Information System (AIS) must have internal controls to
protect data against unauthorized computer access and to limit access to authorized
user, which includes some users inside the company.
Q#4: Types of accounting information. (Types of AI “Accounting Information”)
The types of accounting information can be categorized as follows:
Financial Accounting Information: This type of information includes financial statements
like the balance sheet, income statement, and cash flow statement. It provides a summary
of a company's financial performance and position.
Managerial/Management Accounting Information: This information is used by internal
management for decision-making and planning. It includes budget reports, cost analysis,
and performance metrics.
Cost Accounting Information: It involves tracking and analyzing the cost of producing goods
or services, helping management with cost control and pricing decisions.
Advanced accounting information: Advanced accounting information includes detailed and
sophisticated financial data and analysis that goes beyond basic accounting practices. It
helps in informed decision-making and gaining deeper insights into a company's financial
performance and risks.
International Accounting Information: Involves accounting standards and practices used in
different countries, considering currency exchange rates and international financial
reporting standards (IFRS).
Q#5: What are the types of Accounting information system (AIS)? (Types of AIS)
The accounting information system can be categorized into three types, i.e. manual.
Legacy, Integrated system.
Manual Systems: Manual Accounting Information System involves traditional, hands-on
methods of recording financial transactions and data using paper-based ledgers, journals,
and physical documents, without the use of computerized technology.
Legacy Systems: These were in use before the advent of the high-end technically advanced
accounting systems. This system helps in knowing the historic data of the firm but lacks the
flexibility & reliability of modern-day software.
Modern Systems: These are windows-based technologies that are more user-friendly than
legacy accounting systems. They are cheaper as compared to legacy systems and can be
installed quickly with very few bugs.
Q#6: What are the Functions of AIS (Accounting information System)?
There are basic 3 main functions of an AIS (accounting information system)
1. Efficient & effective storage of financial data.
2. Manage the data & produce information in form of useful reports.
3. Ensure 100% control over data & accurately process it.