Accounting Information System involves the use of information technology in accounting procedures. It is a component Management Information System. AIS are used to generate accurate reports. These reports are either for internal management purposes or for external users. MIS are management aids that help managers in planning projection and decision-making. AIS is used to prepare ledger accounts such as sales, accounts receivable and accounts payable. It’s also used in preparing financial statements and budgets. The AIS is also used in personnel management.
It manages pensions, benefits schemes payroll and tracks workforce. The AIS has financial accounting systems, a cost accounting system and a management accounting system. A financial accounting system processes raw business transactions data to generate financial systems. A cost accounting system allocates costs in the production process to particular stages or products. This helps management achieve cost effectiveness. A management accounting systems helps in decision-making where management is faced by a number of options. AIS have become useful tools in management.
AIS enables management of organizations with huge branch networks control and manage all these branches from a central location. It is also useful in big organizations with several departments. It reconciles information from different sources and processes it to help management make optimal decisions. It produces financial information on demand reducing costly delays. Advances in the information technology field have spurred the use of AIS. It has replaced a lot of paperwork and allows accumulation of huge amounts of data at low cost. (Hollander, A, et al, 1996: 126)