Essay Example on Accounting Information Systems

An information system in accounting is a formal structure in the business, which collects, stores, manages, and processes data to its final output. Consequently, the data is used by managers, consultants, accountants, and financial analysts to make financial and business decisions. Traditionally, accounting systems were manual based but due to the emergence of technology, information systems are currently computer-based. Ostensibly, accounting systems vary due to factors such as the type and size of the enterprise as well as nature and volume of the data in the business. Notably, the systems are widely used because of their confidentiality, reliability, availability, and processing integrity (Peavler 2017). Although many organizations are resistant to change, managers should be quick to adopt the emergence of any form of technology since change is inevitable and it occurs on the best interests of the business units.

Markedly, the three approaches that may be used by a company include; opting for an outsourced development from another company in situations where the company lacks internal profession to come up the elucidation. The enterprise may also purchase it as software where the company does not have a skilled person or alternatively, develop an in-house system in cases where the company has enough expertise and finance. Apparently, all the three approaches have advantages and disadvantages although a disadvantage to one company might be an advantage for another and vice versa (Drapkin 2013). Ostensibly, for the company, I would opt for the in-house development where the company uses its employees to improve and implement the system in accordance with the company`s needs.

Notably, this kind of approach enables a company to modify their system in the exact way that fits the enterprise. Also, the company connects directly to the people who are using the system as well as the IT team and hence the system can be customized in a way that best suits the users. However, this approach necessitates the company to come up with a group of programmers who will work closely with the company on a joint work line hence providing an easier coordination between the teams (Prabhakar 2017). Also, the system allows the company to have full control over its functionality as well as in-depth knowledge concerning its interphase.

Some of the factors that make in-house systems advantageous over other approaches are that unlike the purchased software where the company has to rely on the manufactures for guidance in case the software stops functioning, in the inbuilt systems the IT personnel work in close range with the company and may offer solutions to any challenge arising. Additionally, the company is in possession of the final product as well as the knowledge obtained during the development process. Fortunately, the software developed fits perfectly the desires of the company (Hall 2012). The in-built software enables a company to differentiate themselves from the competitors as well as provides the enterprise with a competitive advantage regarding solving a challenge. In out-sourcing, due to the difference in geographical positions, it is usually challenging to conduct meetings and face to face conversations (Prabhakar 2017). However, inbuilt software overcomes the challenge since the software developers are present anytime their services are needed.

Resources that are required for a successful implementation of AIS include the hardware, software, data, and the resource management enterprise. The hardware consists of the whole machine unit together with the components that make it operate such as the input and output devices, and the storage devices. The software is made up of a set of instructions, which are in the form of programs that run the whole machines. Data, on the other hand, are information that is collected, processed, and stored by the computers. The resource management enterprise comprises if the people who create the programs and run them in the computer unit (Gelinas, Dull, Wheeler & Hill 2017). The above resources are essential during the implementation of a new accounting information system.

Although in-house applications have significant advantages to organizations, they also have setbacks. Some of the set-backs include; the employees of a company might not be in a position to develop sophisticated programs, and therefore, it will necessitate the firm to look for an outside consultant who is not familiar with the working of the organization. Consequently, the results might be detrimental to the enterprise. Also, customized software usually lack scalability, and hence it can be challenging during the process of upgrading. However, if a company has skilled personnel who can keep up with time, the in-house built software will perform the best compared with other approaches (Hall 2012). In, essence, change is inevitable hence companies should always strive to adjust to the changing technology.

An accounting information system is a formal structure in the business, which collects, stores, manages, and processes data to its final output, which is used by managers, consultants, accountants, and financial analysts to make financial decisions. Notably, the approaches used by companies to acquire AIS includes; outsourcing development from another company in a situation where the company is lacking an internal expertise to develop the solution. Another approach is purchasing it as software where the company does not have a skilled person, or developing in-house software in cases where the company has enough expertise and finance. Of the above three, the in-house development is the best because it can be customized according to the interest of the organization. Therefore, organizational managers ought to be flexible when it comes to enterprise technology since change is inevitable.

Bibliography

Drucker, P.F., Hesselbein, F. and Kuhl, J.S., 2015. Peter Drucker's Five Most Important Questions: Enduring Wisdom for Today's Leaders. John Wiley & Sons.

Gelinas, U.J., Dull, R.B. and Wheeler, P.R., 2011. Accounting Information Systems: Cengage Learning.

Hall, J.A., 2012. Accounting information systems. Cengage Learning.

Peavler, R. 2017. The Business Owner's Guide to Accounting Information Systems. The Balance.

Prabhakar, B. 2017. Advantages, Disadvantages between in house developed MES system and industry standard MES systems.LinkedIn Corporation.