Accounting Information System

1440 Words6 Pages
The Impact of Accounting Information System (AIS) on Small and Medium Enterprises Introduction of an Accounting Information System – AIS An Accounting Information System (AIS) is the collection, storage, processes, analyses and disseminates of financial and accounting data used by internal management to report information to owners, investors, debtors, creditors also government tax authorities. An accounting information system is a subset of Management Information System (MIS) which is responsible for offering timely and accurate financial and accounting information as well as statistical reports to facilitate the internal management decision marking along with facilitation offered to the external parties. An accounting information…show more content…
This report explores the level of awareness towards the importance of financial management from the preparation of accounting statements and its information usage the business. In the context of SMEs, accounting information is important as it can help the firms manage their short-term problems in critical areas like costing, expenditure, and cash flow also taxation daily accounting transactions by providing information to support monitoring and well control. Defined Small and Medium Enterprises (SMEs) Small and Medium Enterprises have been defined in various ways according to the capital of the enterprises, size, the number of people employed and capacity by the enterprises, the owners and management of the enterprises and sales volume. Also they are characterized by the relatively small amount of capital and turnover. According to the International Labour Organization (ILO, 1997), no single definition can capture all the dimensions of “micro,” ”small,” “medium” or “large” nor can it expect to reflect the differences between firms, sectors or countries at different levels of development. The International Accounting Standard Committee Foundation (IASCF) (2007) defines an SME as an entity that does not have public accountability and thus, publishes general purpose financial statements for external…show more content…
It is clearly shown that there are more advantages if management of small and medium enterprises take the necessary level of introducing the company system. If a correct system which is suitable for the company is implemented there will be a positive impact which will increase the profitability of the company. With the increase advancement in technology and the popularity in using technology by the general public, it is always advisable for SMEs to introduce some sort of an AIS to their company. This way they should be able to concentrate more on their core activity as the computer system will reduce the workload in maintaining accounts. Reference Dr Al Smirat, Belal Yousef (2013), The use of accounting information by small and medium enterprises in south district of Jordan, (An imperial study), Research journal of finance and accounting. Vol.4, No 6, 2013, pp. 169, 170 http://smallbusiness.chron.com.(2014)disadvantages-using-accounting-software,(online) 3823.html, (Accessed 26 Mar.2017) http://www.eleveraccounting.com/9-advantages-computerized-accounting (online) (Accessed 26
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