ACCOUNTING SYSTEM

INFORMATION SYSTEM

- is a set of inter-dependent components which collectively accomplish certain objectives. - is a set of two or more interrelated components that interact to ach ieve a goal. Systems are almost always composed of smaller subsystems, each being designed t o achieve one or more organizational goals. When the Systems Concept is used in systems development, changes in subsystems c annot be made without considering the effects on other subsystems and the system as a whole. The system concept also encourages Integration, which eliminates duplicate recor ding, storage, reporting and other processing activities in an organization. INFORMATION -is data that have been organized and processed to provide meaning to a user. DATA - are facts that are collected, recorded, stored and processed by an inf ormation system. Kinds of data: 1. Facts about the activities that take place. 2. The resources affected by the activities. 3. The people who participate in the activity. Seven (7) characteristics that make information useful and meaningful for decisi on making: 1. Relevant 2. Reliable 3. Complete 4. Timely 5. Understandable 6. Verifiable 7. Accessible INFORMATION SYSTEM a system whose objective is to monitor/document the operations of some o ther system, called a target system. An information system cannot exist withou t a target system. ACCOUNTING INFORMATION SYSTEM Being an information system, an accounting information system has it target sys tem which is the business operation in a narrow sense. The target system of an accounting information system has to do with the aspect s of business operations that have to do with accountability of the assets/liabi lities of the enterprise, that ultimately leads to the determination of the resu lts of operations. Accounting Information system combines the study and practice of accounting with the design, implementation and monitoring of information systems.

Such system uses modern information technology resources together with tradition al accounting controls and methods to provide users the financial information ne cessary to manage their organizations. All information systems are systems, but not all systems are information system . All accounting information systems are information systems, but not all informa tion systems are accounting information system. SIX COMPONENTS OF AN ACCTG. INFO. SYS.: 1. The people who operate and performs various functions. 2. The procedures and infrastructures, both manual and automated, involved in co llecting, processing, and storing data about the organizations activities. 3. The data about the organization and its business processes. 4. The software used to process the organizations data. 5. The information technology infrastructure, including computers, peripheral de vices and network communications devices used to collect, store, process and tra nsmit data and information. 6. The internal controls and security measures that safeguard the data in the AI S. These six components enable AIS to fulfill three (3) important business functions: 1. Collect and store data about organizational activities, resources, and perso nnel. 2. Transforms data into information that is useful for making decisions so manag ement can plan, execute, control and evaluate activities, resources and personne l. 3. Provide adequate controls to safeguard the organizations assets, including its data, to ensure that the assets and data are available when needed and the data are accurate and reliable.