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The Accounting Information System

The Accounting Information System - additional processing...

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The Accounting Information System The system of collecting and processing transaction data and communicating financial information to decision makers is known as the accounting information system . Factors that shape these systems include: the nature of the company's business, the types of transactions, the size of the company, the volume of data, and the information demands of management and others. Most businesses use computerized accounting systems—sometimes referred to as electronic data processing (EDP) systems. These systems handle all the steps involved in the recording process, from initial data entry to preparation of the financial statements. In order to remain competitive, companies continually improve their accounting systems to provide accurate and timely data for decision making. For example, in a recent annual report, Tootsie Roll states, “We also invested in
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Unformatted text preview: additional processing and data storage hardware during the year. We view information technology as a key strategic tool, and are committed to deploying leading edge technology in this area.” In addition, many companies have upgraded their accounting information systems in response to the requirements of Sarbanes-Oxley. In this chapter we focus on a manual accounting system because the accounting concepts and principles do not change whether a system is computerized or manual, and manual systems are easier to illustrate. However, many of the homework problems in this and subsequent chapters can also be done using the computerized general ledger package that supplements this text....
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