Creating an Accounting Information System

Creating an Accounting Information System
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Creating an Accounting Information System
The main goal in establishing an excellent accounting information system is a collection of data, processing the data and finally come up with well-researched reports (Eastburn & Boland, 2015). This gives the management the best options to use in the production of timely decisions. Since information is necessary for setting up a business, it is therefore essential for the management to uphold basic understanding of accounting information system. This essay will expound on some principles engaged in setting up an excellent accounting information system.
Control
This principle states the entire accounting information system must be based on excellent internal controls. The internal controls refer to the set procedures and practices that are used in monitoring and controlling the business progress. Such practices include systems password control, monthly bank account information and securing of confidential business information. This kind of control to the internal business information safeguards the integrity of the information or the data being processed in the information system.
Relevance
In business, it is important for the information to be produced in timely intervals. Moreover, the produced information must be useful and easily understood by the relevant personnel. The accounting department is characterized by storing financial information at different intervals such as monthly or quarterly.

Such kind of information is not necessary for the real running of the business. Currently, the financial information is required to be produced almost immediately since the faster the information is present, the more useful it is.
Compatibility
The compatibility principle entails the system confirmation of the company’s events and internal structure. This means accounting software is expected to have its operation in the industry that the company is operating from. For instance, a bank will go for purchasing software that can monitor banking transactions including the teller and the ATM instead of purchasing manufacturing planning software.
Cost-effectiveness
Accounting information system must meet the cost-effectiveness thereby outweighing information cost. The desired output can only be met by cutting down the cost-effectiveness. Additionally, if the cost flexibility is incorporated therefore this will contribute much more to achieve the business goals.
In conclusion, for development of an accounting information system, it is crucial to follow the stated principles since it will give close monitoring of the entire business.
Reference
Eastburn, R. W., & Boland Jr, R. J. (2015). Inside banks’ information and control systems: Post-decision surprise and corporate disruption. Information and Organization, 25(3), 160-190.