Accounting Information Systems: Bringing Modern Technology to Accounting

While computers and accounting software have taken over some of the more mundane accounting tasks, they've also opened a window to a new field in the accounting industry. Accounting information systems have become the hot new accounting field and will be opening up new career paths for accounting professionals.

In manufacturing, the cost process is also heavily involved in the accounting information system to provide the cost of goods sold, so businesses can track the costs, analyze resources, and track performances.

What They Do

An accounting information system (AIS) is a computerized financial accounting system that takes input and runs the information through the steps in the accounting cycle. With these systems, the accounting process is dependent upon the information system, opening up the focused area of accounting information systems to address issues within these systems.

While the accounting information systems have no problems with calculations, someone needs to ensure that the system:

  • Provides the proper steps within the accounting procedure
  • Is properly used to produce relevant and accurate reports
  • Is secure and tamper-proof
  • Is auditable and provides controls

The Basics

An accounting information system will provide the following basic steps:

  • Processing a transaction
  • Classifying the data
  • Summarizing the data

In manufacturing, the cost process is also heavily involved in the accounting information system to provide the cost of goods sold so businesses can track the costs, analyze resources, and track performances.

How the Accountant Is Involved

Putting an AIS into place involves several steps, and the accountant of the business as well as an accountant for the information system itself both should be involved.

Support: Ongoing support must be available to tweak the system as needed. The final output of the AIS is the reports that are presented to management for review and analysis for their business decisions. The ultimate goal of the system is to get accurate and complete data for reports that not only meet reporting requirements, but provide the information in a usable format. The reports are classified within three categories of reporting: Filter: Filter reports pull data from the database to find information for a specific use. An example of a filter report would be pulling all customers within a particular zip code to send them a marketing letter to inform them that a new office is opening in the area.

Responsibility: Responsibility reports pull specific data within specific areas according to need. For example, a responsibility report could be monthly office supply expense data for an office manager or weekly sales data for a specific department for the department head.

Comparison: Comparison reports pull data to provide cost and revenue comparisons, such as sales data year to date for the previous year vs. the current year to track the increase, or worse, a decrease!

Accounting Technology Careers

There are specific degrees within colleges and business schools that provide a focus in information technology and other degrees that offer a focus in accounting – now schools are offering a combination of these two fields for a more specific accounting technology degree.

Accountants pursuing a career in technology could also receive certification from the Information Systems Audit and Control Association (ISACA). Their designation is known as the Certified Information Systems Auditor (CISA). Candidates for this certification must have five years of experience in auditing information systems. Other experience such as financial auditing or college credit may be used as a substitute for two years of this experience. There is also an exam that must be passed in this designation.

For years both the accounting industry and technology industry have offered impressive career prospects. Combined, these industries will offer an expertise that is quite marketable.

  • Planning: Obviously, the budget, scope, and objectives of the AIS need to be determined.
  • Analysis: The current accounting process is documented and the information is reviewed and analyzed. The system is planned and its goals are analyzed in this phase.
  • Design: The design phase physically develops the system according to the analysis of the needs and processes of the business.
  • Implementation: Specific parts of the system can be implemented according to a predetermined plan in order to test each aspect of the system. Phase implementation needs to be performed to test the system and also allow reduced disruption of the accounting process.