Accounting and Financial Information Systems

Accounting and Financial Information Systems

Accounting and Financial Information Systems:

The financial function of the enterprise consists in taking stock of the flows of money and other assets into and out of an organization, ensuring that its available resources are properly used and that the organization is financially fit. Accounting Information System is a system of collecting, storing and processing financial and accounting data that are used by decision makers. is linked to all the information systems in an organization. It is usually a computer-based method for tracking accounting activity in conjunction with information technology resources.

The components of the accounting system include:

  1. Accounts receivable records,
  2. Accounts payable records,
  3. Payroll records,
  4. Inventory control records,
  5. General ledgers.

Financial information systems rely on external sources, such as on-line doses and custom produced reports, particularly in the areas of financial forecasting and funds management. A FIS is used in conjunction with a decision support system, and it helps a firm attain its financial objectives because they use a minimal amount of resources relative to a predetermined margin of safety. The essential functions that financial information systems perform include:

  1. Financial forecasting and planning,
  2. Financial control,
  3. Funds management,
  4. Internal auditing.