Solution
Robert answered on
Dec 22 2021
Accounting information system
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2013
Name of the Institute
Name of the Student
[ACCOUNTING INFORMATION SYSTEM]
The assignment aims to develop an understanding of Accounting Information Systems structure and their
use in the business setting. The task is to answer questions relating to transaction processing, ethics, fraud
and internal control. This assignment itself includes several assignments, each of which comprises a part
of the students’ task. However, it is well encouraged to include any additional information that students
may think will be useful in completing the task.
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Introduction
An Accounting information system i.e. (AIS) which is a system of collecting, storing, and
processing of data which is financial and accounting in nature that is used by the top
management to take decisions regarding the firm. AIS are nothing but computerized based
information retrieval which is in line with the information technology resources. The resulting
eport is generally data of statistics which is used by the internal management of the company or
either it can be used by the external stakeholders such as creditors, investors, consumers and
many others so interested. In today’s business model, information technology has formed an
integral part and in order to survive the competition and staying fit in the business, an AIS model
is a must for the business to run properly.
What is a system?
Generally people take system as visual images of computers and its accessories along
with the programming stuff. But this is not the end of system; it has a
oader terms and
oader
definition. Some systems are generally of natural genre and others being artificial. Natural
systems are comprised of systems of electrons, protons and others whereas artificial systems are
generally human made. These systems are the systems we are talking about in the paper.
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Framework of Information Systems
There are two types of systems as mentioned above. However, since our paper is on
Accounting Information system, so presently we will be discussing that. AIS is based on the
process of subsystems that include the processing of financial as well as non financial
transactions which in turn directly affects the financial information for the organization. The vital
information processed through the system in turn helps the reports to be prepared so the input of
the systems needs to be fair enough to generate reports as desired.
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Transaction Processing Systems
The Transaction Processing Systems or TPS is the central function to the overall
functioning of the information systems of the computers. The TPS converts the economic events
such as financial transactions, recording the financial issues in the accounting ledgers and
journals, and then onwards, processing the financial information to the operations personnel to
support their daily operations.
However, as the systems are designed these days, they are more prone to attacks on the
grounds of weak internal controls. The weaker internal controls are somewhere intentional and
somewhere due to the lack of expertise knowledge. This leads to the distorted system of
information technology and leaves lot of loopholes in between which is cashed by the top
management or personnel and frauds occur.
Many of the cases we have seen that frauds have been executed due to lesser internal
controls or supervision. The logic behind the internal controls are that the framework of
information system is not being maintained strong due to which there is a widened gap and the
same is enjoyed by the other person who makes the most out of it. This is also a
each of ethics
which forms an essential part in the organization and is a major
eakdown of the organizations
principles and norms. The ethics from the point of view of information systems pertains to
maintaining of confidential data of the company and not abusing their authority to
each the
internal controls so set.
We can see that the presence of AIS is a big advantage to the firm since it automates the
processing of information within the organization and also adds a streamline reporting
procedure. However, a wave of scandals have left the information system prone to attack by the
personnel in charge of the same and having a sound knowledge. It has left the authorities to insist
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on implementing stringent internal controls as well as a streamlined transaction processing
systems. This was majorly executed with the introduction of Sa
anes Oxley Act of 2002 which
made it mandatory for companies to review the generated reports of the internal control
management and have a monitoring system of evaluating such controls on rigorous basis in order
to point out deficiency in the same and work on it time to time.
SOX and provision of attest and advisory services
Prior to the effect of SOX, accounting firms could cater services concu
ently to every
audit clients for the attestation services. SOX legislation however imposed greater restrictions on
the part of non audit services that the auditors should cater to the audit clients. Generally the
services provided by the audit firm is not illegal on the grounds that the cu
ent attest services
such as bookkeeping or other allied services related to the maintenance of accounting records or
financial statements of the company, designing of systems and implementation of the same,
valuation services or appraisal services, opinions on true and fair value, actuarial related services,
auditing internal control system, management functions,
oking functions, investment banker or
investment adviser, or any other such services that the Board finds to be not related to the
attestation part of the practicing firm, is impermissible. This is for the better transparency in the...