Relationship Between Accounting Information Systems and Organizations

RELATIONSHIP BETWEEN ACCOUNTING INFORMATION SYSTEMS AND ORGANIZATIONS
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Relationship between Accounting Information Systems and Organizations
Organizations do shape their Accounting Information Systems to fit their demands but on the other hand, the Accounting Information Systems also shape the organizations regarding planning, organizing and controlling of resources in the routine operations. An accounting information system is a compilation of data and their procedures of processing that create the requisite information for its users.
Accounting is the systematic way of keeping financial records, reports, and the analysis of all transactions of an organization. An accountant is in charge of accounting duties, and the person has the mandate to follow the set rules and regulations of accounting. Accounting consists of three basic activities that include; identifying, recording and communicating the economic affairs of an organization to the interested users while Information is raw data that has been processed and organized to give meaning to the users. Usually, better information and more information translate into superior decisions (Agbejule, 2005).
Information has several benefits in the organization such as reduction of uncertainty, better decision-making, and improved ability to timely schedule and plan activities. The characteristics that make the information useful to the organization includes; reliability, relevance, completeness, timeliness, understandability, verifiability, and accessibility. Also, information is provided for both internal and external users. External users use information that is either mandatory like those that are required by the government entities or essential information like those required in conducting businesses with external parties, for example, purchase orders. On the other hand, internal users use discretionary information that focuses on the production of information that ensures the benefits exceed the costs, meaning the information has positive values (Chenhall and Langfield-Smith, 1998).
A system can be defined as a set of interrelated components that interacts to achieve the set goals of an organization while an input is a device that enter the raw data into an accounting system. Typically, inputs include workstations or ordinary personal computers that run the applications. Data can also be input from electronic communication devices, scanning devices for e-commerce and electronic data interchange (EDI). Recently, most of the financial systems are "Web-enabled" to allow connection of devices to the Internet. The basic processing of the data is achieved by the use of computer systems that range from the small individual personal computers to the large-scale organization servers. The primary processing models are still the "double-entry" accounting systems that were initially found application in the fifteenth century. Also, a typical output device such as a computer display or monitor, non-impact and impact printers, and electronic communication devices for e-commerce and EDI. The output contents can encompass all the types of financial reports ranging from the tax reports and budgets to international financial statements...