Академический Документы
Профессиональный Документы
Культура Документы
com
vol.2, No. 3(s), pp. 359-366 ISSN 1805-3602
Corresponding author: Noushin Ahmadi, Department of Accounting, Dolatabad Branch, Islamic Azad
University, Isfahan, Iran. E-mail: Noushin_a1420@yahoo.com
359
Social science section
The Definition of Accounting Information System Also, a properly designed AIS improves the ef-
Accounting is a system to record the financial fectiveness and efficiency of activities through the
events of the organization in order to report these following ways:
financial activities to stakeholders. According to 1. Improving the quality and reducing the cost
ASOBAT and GAAP, accounting system should of production or services; For example, AIS can be
provide information to assist management in plan- used to control machinery in such a way that as soon
ning and decision making (Wu, 1995). Therefore, as the operation was out of the range of acceptable
accounting is as an information system which has quality, the operator will be noticed.
two domains; external financial reporting and 2. Improving efficiency; AIS can help to im-
management reporting. The former is based on prove the efficiency of operations through provid-
the accepted accounting principles and the latter ing more timely information. For example, just in
is based on management preferences (Arab Maz- time (JIT) approach requires ongoing, accurate and
arYazdi, 2003). new information aboutthe inventory of raw materi-
Information systems process data but some- als and their whereabouts.
times it is thought that what is happening in infor- 3. Improving decision making: AIS can improve
mation systems of organizations include simply the decision making by appropriately providing ac-
raw data processing of financial and non-finan- curate information for the personnel.
cial events of the organization. But the fact is that 4. Sharing of knowledge: a properly designed
managers in different levels involved with a vari- AIS could lead to knowledge sharing. With knowl-
ety of issues which has different degree of com- edge sharing, the operations are improved and a
plexity in solving the problems. Also, the type of competitive advantage is created. For example, an
system that can help to solve this variety is posi- audit firm will be able to transfer the experiences to
tioned ina range of retrospective conventional da- the employees working in different departments by
tabase systems to prospective intelligent systems developing and using a network or system (Rom-
(Arab MazarYazdi, 2003). ney, 2000).
Therefore, AIS changes the economic and fi-
nancial activities to the form which is worthwhile AIS subsystems
for users (people who need information about eco- In order to explain how accounting informa-
nomic activities for their decision making). Also, tion system could achieve the mentioned goals, it is
in another AIS definition, it is stated that AIS is an needed to classify organizations’ activities into five
organized components which accumulate, classify, main cycles which are the subsystems of AIS:
process, analysis financial information and provide 1. Expenditure cycle which consists of activities
these information for internal and external stake- that involve the buying and paying for goods and
holders for making decisions (Moscove, 1997). services used by the organization.
2. Production cycle which includes activities
Responsibilities of Accounting Information System which convert raw materials and labors to the fin-
An accounting information system is composed ished products.
of people, practices and information technologies 3. Human resources cycle which consists of ac-
and in general it can be said that AIS has the follow- tivities that are involved in employing and paying
ing three main responsibilities: staff salaries.
1. Receiving and keeping data about the activi- 4. Revenue cycle which includes sales of goods
ties and transactions, so that the organization is able or services or receiving the cash.
to assess what happened. 5. Financing cycle which includes activity that
2. Converting data into information that is use- provides the funds needed for operations.
ful for decision making and helps management for As shown in Figure 1, the main activities of each
planning, implementation and monitoring of ac- of the five cycles have the give and get relationships
tivities. (e.g. the expenditure cycle is caused the loss of costs
3. Establishing the appropriate controls to pre- in order to gain goods and services or the revenue
serve the assets of the organization as well as orga- cycle is caused the loss of goods and services in order
nizations’ financial data. These controls ensure that to obtain cash) and provide data to the ledger and
data are available when they are needed and they are reporting system which prepared information for
correct and also reliable. internal and external users (Romney, 2000).
tem such as performance evaluation, planning and The Definition of Management Information System
control techniques, and other concepts that are rooted Different authors do not agree on the definition
in the organization theory. A new concept that is spe- of management information systems. Also, differ-
cifically associated with AIS is total quality manage- ent names has been suggested for this kind of infor-
ment (TQM). TQM refers to the production of high mation system (IS) such as information processing
quality products and achieving the customer satisfac- system, information and decision making system,
tion. The production sub-system of a manufacturing organization information system, computer data
organization has the main responsibility for achieving processing system, management reporting system
high-quality goods and production. and resources of information (Sagheb, 2001). In one
The main role of the AIS in production quality is definition, MIS describes as a consolidated report-
tojustify the level of quality from a financial standpoint ing system which is designed specifically to assist
that is desired by the management. AIS plays an im- managers in planning, implementing and control-
portant role in TQM environmentdue to the impor- ling the activities of organization (Dugan, 2009).
tance of the costs estimation. Accountants can cal- In another definition, Davis (2010) is described
culate the quality costs and to determine whether the MIS as an integrated system consisting of human
quality of products provides a positive margin or not. and machine which is prepare in organization to
Another concept that is associated with AIS is re- produce valuable information for supporting opera-
engineering. Re-engineering is defined simply as start- tions, management and decision making in an orga-
ing from the zero (nothing). For companies, it requires nization. This system is a combination of computer
an understanding of the work processes and the goals software and hardware, databases and manual meth-
and objectives of the organization, and drawingthe ex- ods and models for analyzing, planning, controlling
isting methods to redesign them. Managers are often and also decision making (Judge Zadeh, 2008).
engage in excessive detail and management crisis and According to Peter keen (2006), MIS is designing,
in fact, they cannot see the forest due to existence of presenting and effective using of information systems in
trees. Re-engineering helps the management to ask organization. In the above definition, the word organi-
himself how he can improve a specific process or is it zation is used and the word management has not con-
necessary that a process be in current situation or not? sidered. Therefore, the MIS topic is considered more
It is possible to re-engineering the accounting process general than the information system. It means, although
as well as production process. For example, an order- this topic is related to the managers, but also involves
ing process is a good model for change. In some insti- all other members of the organization and the structure
tutions a long time is spent in order to complete the and design of the organization. The term organizational
order of each customer. This time can be reduced by information systems may be more appropriate, but the
using re-engineering the whole process of the produc- term management information system is more used and
tion. For example, order processing consists of several accepted (Kroenke, 1992). Management information
separate steps in which the order form is transmitted system is a set of data which is designed with minimal
from person to person. Each employee is doing a costs to provide timely and accurate information and
small part of the duties for each order. When an em- consists of the following major sections:
ployee performs only a limited set of tasks, he becomes 1 - Information flow model which extends from
completely efficient. But it is true that although this the origins to certain specified purposes.
will increase the efficiency, but on the other hand, it 2 - The computer as a tool for information pro-
wastes the time during the transmission of order from cessing.
individuals or groups of individuals toother individu- 3 - Software for understanding data under dif-
als. By using the re-engineering of order process, it is ferent commands (Rngryz, 2009)
possible to give the responsibility of processing a set But the intersection of these definitions is that all
of orders to one person from beginning to end. This the definitions consider MIS as an information sys-
is not only save the time but also identifying the re- temwhich provides information for decision making.
sponsible for each order is possible. Moreover, when a
customer wants to control a specific order, there is just MIS subsystems
one responsible person for that order and that respon- Similar to other systems, MIS is also consists
sible person can identify the situation of specific order of subsystems. Perhaps the most important set of
(Moscove, 1997). subsystems in every corporation is a functional in-
formation system. These are called the functional pany include marketing, finance, human resources
information systems because they support the or- and production. The functional sub-systems of
ganization’s key functions. While there are differ- MIS with examples associated with the input data
ent types of functional information systems, but and output data are presentedin the following parts
four developed systems in a manufacturing com- (Wilkinson, 1997).
Although, above mentioned information sys- assurance that useful data are gathered and pro-
tems are defined as MIS sub-systems, but the most cessed from different recourses and sent to specific
part of these system’s information is provided by the sections to prepare needed information for individ-
AIS and all other information should be obtained uals or group of individuals (Jawadekar, 2002).
from the organization’s environment. For example,
in marketing information systems, the information The Relationship between AIS and MIS
of sales and costs are provided by AIS and informa- The relationship between MIS and AIS is com-
tion about products, competitors, customer char- plex and sometimes controversial and there are dif-
acteristics and their preferences should be obtained ferent opinions have been expressed in this regard.
from the environment (Bodnar, 1993). However, Regarding the above discussion about these two
the role of MIS in an organization can be compared systems, the components of information systems in
with the role of heart in body that information is like one company can be summarised as what presented
blood and MIS is like the heart. MIS also provides in figure 2 (Wilkinson, 1997).
As the above figure represents various commu- for this relationship is that the AIS just provides
nications between MIS and AIS could be noted, the financial information and processes the business
following section discusses the views expressed in transactions while the MIS encompasses a wider
this relationship. range and includes non-financial information
First and foremost mentioned view is that AIS (Gelinas, 1990). This relationship is represented in
is one of the subsystems of MIS. The main reason Figure 3 as well.
Another approach that has been proposed is that expected. The AIS and MIS have some common
the AIS consists of both financial accounting system characteristics and in other words they have over-
and management accounting system. Management ac- lapping. The responsibility of MIS is to provide in-
counting system just provides services for managers and formation to managers for decision making. This
other internal users and financial accounting system information could be financial in nature or informa-
provides services for shareholders and other external us- tion related to changes in the productivity or stock.
ers and AIS has more users. Therefore, it is concluded It is clear that the economic information in the MIS
that MIS is a part of AIS since AIS will cover more users is generally accounting information (Wilkinson,
(Li, 1983). Figure 4 represents this relationship better. 1997). Figure 5 represents this relationship.
Figure 4. Relationship between AIS and MIS Figure 5. Economic information in the MIS
But according to Figure 4 and previous discus- That part of AIS which is independent of MIS
sion, another relationshipAIS and MIS also can be isthe financial accounting component placed out-
Similarities Differences
Both systems are sets of human, machine and a set of In addition to managers and other internal users,
procedures and these factors have the same effect on AIS provides information for other external users so
both systems. that it has more users.
Both systems are composed of subsystems that providing
AIS uses financial data, but MIS uses non-financial
information in each of them requires the cooperation of
data besides the financial data.
MIS and AIS.
The aim of both systems is to provide information to
improve decision making and increase the effectiveness
and efficiency.
Management accounting provides information directly
to MIS and indirectly to other external users.
Financial accounting provides information directly to
external users and indirectly to the MIS.
Therefore, regarding the similarities and differ- ArabmazarYazdi, M, (2003). Accounting Informa-
ences between MIS and AIS, it seems that the best tion System.
expected relationshipbetween these two systems is the Arabmaza rYazdi, M, (2006). Application of expert
overlapping overview. The point that should be noted systems in accounting education.Proceedings of
is that one overview cannot be eliminated until the fans the Eighth Congress of Iranian accounting, Ma-
support that point of view. In fact, different offered randiz publishing, p: 53-66.
opinions are defendable by providers and advocators.
Bodnar G.H, & W.S, Hopwoosd (1993). Accounting
Information systems. Fifth Edition, Prentice Hall.
References
Dugan R, & R , Fulweiler (2009). Managing Technolo-
Anvari Rostami, A. (1998).Understanding the fun- gy (The Role of management Information systems).
damentals of management information systems. Gelinas, U , A , Oram, and W, Wiggins (1995). Ac-
Tarahane Nashr. counting Information systems. PWS –kent.
Jawadekar, W.S. (2002). Management Information Information systems. 8th Edition, Prentice Hall.
Systems.Second Edition, Tata MC Graw Hill. Sajadi, S.H &Tabatabaienejad, S.M. (2006). Ac-
Kroenke, D. (1992). Management Information sys- counting Information Systems. ShahidChamran
tems. Second Edition, MC Graw Hill. University Press, first edition. .
Li, D.H. (1983). Accounting Information systems: A Sagheb Tehrani, M. (2001). Information Technol-
Control Emphasis. Irwin Inc. ogy Management. First Edition, The Center for
Moscove, S.A., M,Simkin & N, Bagranoff , (1997). Public Management Education.
Core Concepts of Accounting Information Systems. Wilkinson J.W, & M. Ceruho (1997). Accounting
Fifth Edition, Wiley. Information systems Essential Concepts and
Rangriz, H. (2007). Analysis and Design of Management applications, Third Edition.
Information System. Tehran,Bazargan publication. . WU, F. H (1983). Accounting Information systems,
Romney, MB, & PJ, Steinbart, (2000). Accounting Theory and Practice. MC Graw Hill.