Accounting Information System Essay

Executive Summary Accounting information system is an extremely important role in the enterprise management. As technology advances, the system software is constantly improving, constantly enhance the function of the system, thus improving the efficiency of enterprise management. Accounting information system network and multi-function trend is more obvious, how is the fastest way to management to provide the latest information to help decision-makers analysis, forecasting, decision-making, improve operational efficiency, will be the greater challenges of the accounting information system.

This study research and explore seven aspects of the accounting information system, we trying to find out that suits your needs accounting information system solutions for the enterprise. Key words Accounting information system network and multi-function trend decision-making 1. Introduction: Accounting information system is a subsystem of enterprise management information system. It is a system which deal with accounting business, provide enterprises with financial and accounting information and manage enterprise economic activity(Romney Marshall & Paul 2009).

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With the information technology birth and the rapid development, society is made industrial society into information society and accounting environment is facing great changes have taken place. So the increasing interest in business activity has heightened the need for the accounting information system. The case study showed that the RTE’s structure and daily operation. As the manager of the RTE, Rebecca is introduced the prototype of the accounting information system when the RTE in the early stages of the operation. Although the early succeed has brought its substantial profits.

However, with the expansion of business, Rebecca found some issues with management and control. She change the management model to solve the current predicament, however, it cannot treat inherent issues. At the same tome, competition is a common finding in business. A key problem is establishing a suitable accounting information system to control the management and supply chain. Because both of them were suffer from the dependency on accounting information system. The remaining issue is to find a way of consulting service. The present work extends the use of the reasonable model to manage the RTE.

In addition, an effort is made to improve the efficiency with accounting information system for RTE. This paper is divided into five sections. Section II describes what accounting information system is and how it would help the RTE. 2. Discussion 2. 1: Define information systems; explain how they work; and describe their benefits for business. What types of information systems could be used to support RTE? The information system is composed of people, computers and other peripheral devices which can perform information collection, transmission, storage, processing and maintenance (Bernard Jari & David 2000).

Its main task is to maximize the use of modern computer and network communication technology to strengthen enterprise information management. Information system establish the correct data for the investigation of human, material and financial resources, equipment, technology and other resources owned by the enterprise. Managers to make decisions based on data which it provides and continuously improve the management level of enterprises and economic benefits (Beynon 2009). If we want to know how information system is working, first of all we need to know the composition of it.

In general, an information system is made up of several parts(Romney Marshall & Paul 2009): —People using the system —Procedures and Instructions For collecting, processing, and storing data —Data —Software —Information Technology (IT) Infrastructure Computers, peripherals, networks, and so on —Internal Control and Security Safeguard the system and its data First, the managers collect and store data about organization with a standard set of procedures. The data include: Activities Resources Personnel Second, the managers use the information system transform data into information enabling.

Including the use of software input data, processing the data by computer and print the output reports and statements. Third, information system controls of the supply chain of RTE. Owing to containing large amounts of assets and financial data, it needs to provide adequate control to safeguard(Lo & Fisher 2014):. The benefits for business include: • Reduce Uncertainty • Improve Decisions • Improve Planning • Improve Scheduling Accounting information system can used to support RTE because it is a system which collection, storage, processing, transmission and output a large number of accounting information.

The accounting information system will be fully fused in the whole enterprise information system when enterprise information development to a certain extent (Beynon 2009). 2. 2 Explain how these information systems could help RTE in managing the business. How will the introduction of information systems affect management decision? making? The accounting information system could help RTE in managing business include(Romney Marshall & Paul 2009): Improve Quality and Reduce Costs. Managers based on accounting information system information provided, coordinate human, material and financial resources to achieve the expected goal.

The cost differences are derived from various activities of control. Accounting information system is statistics out some unnecessary expenses at a period of time. Improve Efficiency. Accounting information system is to make the RTE’s resources more fully utilized and use its resources to win in the competition. Improve Sharing Knowledge. The use of the computer network can make managers get more information. Improve Supply Chain. Supply chain is the major activity of RTE. Accounting information system can screen the best suppliers which can supply the best production.

Improve Internal Control. Enterprise management to achieve expected goal must establish a set of internal control system. Accounting information system can the effective manage of the internal of RTE’s employees, responsibility, finance and assets? Improve Decision Making. Decision making is the guarantee of the sustainable development of enterprises. According to the accounting information system, managers can find problems in time and formulate the corresponding countermeasures(Bernard Jari & David 2000). When the decision making was worked out, it is static.

Managers according to the accounting information system’s information for external changes and thus makes the corresponding modification. The accounting information systems can improve decision—making by the following of Identify situations that require action. 1. Hierarchy. In the pyramid structure, different departments need different information of economic activity. Accounting information system can use digital terminal, let different employees define their goals that it can greatly improve the efficiency. 2. Integration. Manager can make the correct decision when higher the integration of the operating activities of information.

Provide alternative choices. In the production task, there are several options which based on the different time, human and financial resources to complete a task. Accounting information system could real-time monitoring of the production process. Once the one hand impediments, the system will redeployment of existing resources and by anther way to complete the task. Reduce uncertainty. The market is constantly changing. Decision-making in the implementation process will be subject to a number of factors. Generating uncertainty factors are (Lo & Fisher 2014): 1. Inflation and price changes 2. Changes in production capacity 3.

Changes in funding and duration 4. Changes in economic policies and regulations Most of these factors can not be controlled in advance. So accounting information system could have technical and economic analysis of these uncertainties, calculate the probability of its occurrence and the degree of influence on the decision-making and choose the best solution of the economic effects. Provide feedback on previous decisions. If the feedback is slow will cause commodity production cycle becomes longer, thereby increasing the loss caused by the product backlog or caused by supply and demand out of line and thus can not meet the needs of consumers.

With the accounting information system, managers and consumers would extensive contact and catch the selection of merchandise and demand feedback (O’Brien 2003). For example: A selling food in RTE at the beginning is always in short supply performance. When it will meet, supply and demand will become balanced. Once to meet the consumption needs, the product in the market performance of oversupply. Accounting information system connected to the internet and interaction with customer to obtain feedback about the product.

So that, the feedback can help enterprises allocate resources better. Provide accurate and timely information. Accurate and timely information ensure that the accounting information system is an efficient system. 1. The principle of authenticity The principle of truthfulness is the accounting should be based on actual economic business; truthfully reflect the economic business, financial condition and operating results. RTE’s data was input by the administrator. The accounting information system has security settings and people can’t modify the input data except administrator.

The same time, the accounting information system has its own verifiable; it can reduce the chance of error. 2. The principle of timeliness Accounting should be timely, guarantee accounting information and objects consistent in time. Accounting information system is a real-time system. It input the RTE’s data timely registration and schedule in preparing financial statements in order to facilitate decision-makers. 3. Use Porter’s Competitive Forces Model to explain how these information systems could be used to gain competitive advantages.

According to Michael porter’s theory of enterprise competitive strategy, enterprise competitive advantage is determined by the industrial structure which consists of five competitive forces in an industry( enter the threat, threat of substitution, the buyer bargaining power, the bargaining power of suppliers and the existing competitors, competition). In the fight against the competitive forces, RTE must adopt the corresponding development strategy and set up it owns competitive advantage (Porter, 2008). Food industry analysis of porter five competitive models 1. The competition between existing competitors.

The goal of business is to market share, RTE’s goal is the same to all of the restaurants. Therefore, the RTE would have a phenomenon of conflict and confrontation in the implementation; conflict and confrontation constitute the existing competition between the restaurants(Porter, 2008). How to gain a competitive advantage? Price advantage Price advantage is a common means of competition. Accounting information system was according to the network information to choose the best Cost-effective suppliers. Once RTE can get the low price of raw materials, it will reduce costs relative to its competitors. Efficiency advantages

Accounting information system real-time display of the current production process of RTE. It would reasonable allocation of materials and deliver when some departments need. So it makes RTE productivity is higher than its competitors. 2. New entrant threat. New entrants may occurs competition to RTE with raw materials and market share, eventually leading to reduced levels of RTE earnings, the worst case may endanger the survival of RTE. How to gain a competitive advantage? Communication advantages RTE can use the accounting information system to consolidate the relationship between suppliers; in order to ensure the supply of raw materials.

Customer feedback is very important for RTE. Since the accounting information system is an Internet-based system, managers can communicate to customer with network; understand the customer’s tastes and our own shortcomings, so as to enhance the competitiveness of their own products. 3. The threat of substitutes. Porter argued that the lower the price of the alternatives, the better the quality, the lower the cost of users to convert, its competitive advantages that can be derived more obvious(Porter, 2008).

RTE is facing the threat of substitution from two aspects: The new ordering mode restaurants Due to the development of the network, the traditional telephone ordering mode gradually replaced by network ordering. Customer with they are curious and will interested in network ordering restaurants to devote more attention. Traditional fast-food chain enterprises Business concepts and ideas of the traditional fast-food chain are continually updated. They began to implement traditional fast food and drinks are complementary strategies. Like McDonald’s and McCafe. How to gain a competitive advantage?

Network applications make the operation of many companies to be shared on the network. Accounting information system to collect and process the information and set the network statement to manager. Managers by the network statements, examine sales growth of alternatives, production capacity and profitability expansion of alternative products manufacturers. 4. Bargaining power of supplier. Porter argued that suppliers mainly by increasing the factor prices and reduce the quality of the unit to influence the profitability and competitiveness of existing enterprises(Porter, 2008).

Accounting information system by the collection and comparison of data of suppliers screened the best suppliers in order to support the operation of the RTE. 5. Bargaining power of buyers. In the food industry, the purchaser influencing factors which can not be ignored. The purchaser taken competition means including: the low level of prices, demanding higher quality or more services, and even forced to lower price competition between enterprises. Therefore, managers can use the accounting information system categories of users and give a variety of products and services according to different customers(Porter, 2008). . What are the information requirements of RTE? What business processes should RTE consider making computerized? Why? Relevant The capacity of information to make a difference in a decision by helping users to form predictions about the outcomes of past, present and future events or to confirm or correct prior expectations. Reliable The quality of information that assures that information is reasonably free from error and bias and faithfully represents what it purports to represent. Complete

The inclusion in reported information of everything material that is necessary for faithful representation of the relevant phenomena. Timely Provide information available to a decision maker before it loses its capacity to influence decisions. Understandable The quality of information enables users to perceive its significance. Verifiable The ability through consensus among measurers to ensure that information represents what it purports to represent or that the chosen method of measurement has been used without error or bias. The business processes of RTE include: Revenue

Expenditure Production Human Resources Financing With the development of computer, computer data processing technology has been widely used in the field of accounting. Total of these processes could consider making computerized. 1. Revenue and Expenditure Maintain the security and integrity of the corporate assets. Any enterprise has its own assets, if there are no certain measures to protect, the assets have suffered losses due to waste, corruption, theft, and other behavior, Therefore, the establishment of computer control system is to prevent the loss of corporate assets. . Production Promote the improvement of economic efficiency. Computerized Accounting Information System aims to promote the rationalization of management and operations, improve management and economic efficiency. 3. Human Resources Effective assess employee’s work performance. Computerization not only conducive to the implementation of the principles and policies of the enterprise, but also provides a basis for appraising staff performance. 4. Financing Ensure that the accounting information is accurate, complete and reliable.

Accounting information must be accurate and reliable which is the enterprise to improve operational management. Establish appropriate computer control system can improve the correctness of the decision-making. 5. Explain how collaboration and communication among key stakeholders could be supported using information systems. Explain the use of computer networks (intranets and extranets) and the Internet to serve their needs. Bank, customers and supplier are most direct key stakeholders for RTE. Bank: With the accounting information system, RTE can found the best interest rate loan.

The Bank analysis the data and provide to RTE with the best financial solutions to help its development (Beynon 2009). Customer: Customer needs is RTE’s goal. With the information system, RTE based on customer feedback, organize to customer needs, in order to achieve different customers with different services (Beynon 2009). Suppliers: Communication with suppliers is very important. Because materials provided by suppliers, price and delivery time are constantly changing. Provide the right product in the right place at the right time for the right price (Beynon 2009). Intranets

Business objectives The manager can use the computer and accounting software to statistics a period of business operation in the past. So the manager will accord the past data to formulate the future business objectives. IT resources Computer network Application put the in-store separate IT equipment integrated into a system. With the computer and network participation, the administrator can store business data into the system, thereby achieving office automation. Extranets IT processes Once the accounting information system is established, data will be centralized processing.

For example: • Manager was according to the distance of customers and the efficiency of the deliver to allocate the delivery tasks. • Compare by the computer program to filter the best suppliers. 6. What management challenges will affect organizational change during the implementation of the computerized information system? In today’s situation, the accounting information system has been developing rapidly. Current challenges mainly include in the comprehensive management and information security management. 1.

The integrate management of accounting information system RTE production and business activities is an interrelated whole. Accounting information system to reflect and supervision of financial position and operating results. A failure of business operation or a waste of productive resources also will directly affect the profits of RTE. Therefore, RTE not only need to manage financial data, but also comprehensive management of resources, staff and production processes for the entire restaurant. Existing accounting software in the integrated management of enterprise business is still not perfect (Spagnoletti, Paolo & Resca 2008).

At the same time, some of the production process has its own characteristics. Thus, according to the different levels of integrated enterprise, how to use computer integrated processing accounting information which is a big challenge. 2. Information Security Management How to ensure the safety of the accounting information system will become an important issue of accounting information management. International Standardization Organization defines information security are “information integrity, availability, confidentiality and reliability. Therefore, the security of the accounting information means accounting information system has the integrity, availability, confidentiality and reliability(Peltier & Thomas2001). So accounting information system security management generally includes three categories: • The physical security management, including computer room, cable, host. • The network and information security management, including network unblocked, accurate, and online information security. • Application security management, including procedure’s application development and database operation safety. 7.

State and explain the security and ethical issues may arise from the introduction of information systems in the business? The security risk of accounting information system • The authenticity and reliability of accounting information. Open network environment, the accounting information has exists risk of distortion. Although paperless information can effectively avoid some due to man-made causes of the distortion of accounting, but still can’t rule out the behavior of electronic documents, electronic books being modified without leaving any traces (Spagnoletti, Paolo ; Resca 2008). The enterprise’s important data leak. In the information technology rapid development today, information is particularly important in the enterprise’s operation and management. It has already become an important capital of enterprises and even determines the success or failure of enterprises in the fierce market competition. Enterprise’s financial data is a major commercial secret, in the process of network transmission, is likely to be illegal intercepted by competitor, then cause immeasurable loss. Therefore, to assure the safety of financial data also not allow ignoring. Whether the accounting information has been tampered with. Accounting information could be illegal intercepted and malicious tampered with by hackers or competitors at any time in the process of network transmission. At the same time, the computer virus can also affect the information of security and authenticity. These are the problems to be solved. • The security of computer hardware. Network accounting relies mainly on the automatic data processing function, and this function is very concentrated, tiny error and interference of natural or man-made, can cause serious consequences (Peltier ; Thomas2001).

For example, the lack of safety management, make computer stolen or the files in the magnetic medium carrier like optical disk, disc are not been appropriate storage, can cause information loss or leak, etc. 3. Conclusion: Management information is the key link in the long-term development and improves the core competitiveness of enterprises. Traditional accounting system can not meet the needs of the modern enterprise management. Create a computerized accounting information system allows enterprises to make full use of existing resources, make the right decisions quickly and adapt to market competition.

The study focuses on a restaurant how to build it own accounting information system. In the course of this analysis, we have demonstrated that accounting information system to give RTE a great deal of help. At the same time, additional research should focus not only upon how to establish the accounting information system, bur also the challenge development strategy and issues. Especially, such research can establish a generic model to meet the needs of more companies. 4. Recommendations: Intelligent accounting decision support system, the accounting information system should integration into the ERP management.

The basic idea of ERP is put the enterprise operational processes as a tight links of the supply chain; the goal is full coordination of internal and external resources in order to establish a comprehensive competitive advantage. Accounting software development must be integrated into the enterprise ERP macro layout. Accounting information system intelligent is future direction. Forecast resources of financial analysis and business decisions to help make the right decisions for managers. So the manager of RTE should focus on: External Strengthen the information network.

Upgrade accounting software. Enhance communication with suppliers. Internal Application of ERP system. The improvement of enterprise management system. 5. References: Romney, Marshall B ; Paul John Steinhart (2009) “Accounting Information Systems”. Upper Saddle River, NJ: Pearson Prentice Hall. Porter, M. E. (2008) “The Five Competitive Forces That Shape Strategy”, Harvard Business Review, January, pp. 79–93. Beynon Davies P. (2009). “Business Information Systems”. Palgrave, Basingstoke O’Brien, J A. (2003). “Introduction to information systems:” essentials for the e-business enterprise.

McGraw-Hill, Boston, MA Bernard Aboba Jari Arkko & David Harrington (2000) “Introduction to Accounting Management”, RFC 2975, IETF. Lo & Fisher, (2014) “Intermediate Accounting”, 2nd edition, Pearson, Toronto, ISBN 978-0-13-296588-0 Spagnoletti, Paolo; Resca A. (2008). “The duality of Information Security Management: fighting against predictable and unpredictable threats”. Journal of Information System Security 4 (3): 46–62. Peltier, Thomas R. (2001). “Information Security Risk Analysis” Boca Raton, FL: Auerbach publications. ISBN 0-8493-0880-1.