For example, consultants might use the information in an AIS to analyze the effectiveness of the company's pricing structure by looking at cost data, sales data and the 39 steps book revenue.
One way businesses can easily meet hardware and software compatibility requirements is by purchasing a turnkey system that includes both the hardware and the software that the business needs.
In particular, specially trained accountants work with AIS to ensure the highest level of accuracy in a company's financial transactions and recordkeeping and to make financial data easily available to those who legitimately need access to it, all while keeping data intact and secure.
For publicly traded companies, no matter what software program and customization options the business chooses, Sarbanes-Oxley regulations will dictate the structure of the AIS to some extent.The system should also be easy to use and should improve, not hinder, efficiency.If an existing program does not meet a company's needs, software can also be developed in-house with substantial input from end users or can be developed by a third-party company specifically for the organization.(Also check out Case Study: The Collapse of Lehman Brothers, and An Inside Look At Internal Auditors.) Valukas's report also noted, "Lehman's systems were highly interdependent, but their relationships were difficult to decipher and not well documented.An AIS must have internal controls to protect against unauthorized computer access and to limit access to authorized users which includes some users inside the company.Internal Controls The internal controls of an AIS are the security measures it contains to protect sensitive data.A third use for an AIS is that when a business is in trouble, the data in its AIS can be used to uncover the story of what went wrong.(Learn how you can get a job in this field, read A Guide To Careers In Accounting Information Systems.) AISs In Real Life We've seen how a well-designed AIS allows a business to run smoothly on a day-to-day basis or hinders its operation if the.These can be as simple as passwords or as complex as biometric identification.Quality, reliability and security are key components of effective AIS software.Lehman's systems provide an example of how an AIS should not be structured.This is because SOX regulations establish internal controls and auditing procedures that public companies must comply with.For example, management can establish sales goals for which staff can then order the appropriate amount of inventory.It must also prevent unauthorized file access by individuals who are allowed to access only select parts of the system.
(section 404 of the Sarbanes-Oxley Act, which regulates companies' internal financial controls and procedures.
The data included in an AIS will depend on the nature of the business, but it may consist of the following: sales orders customer billing statements sales analysis reports purchase requisitions vendor invoices check registers general ledger inventory data payroll information timekeeping tax information, this.Valukas's report states, "At the time of its bankruptcy filing, Lehman maintained a patchwork of over 2,600 software systems and applications.With a well-designed AIS, everyone within an organization who is authorized to do so can access the same system and get the same information.An AIS also simplifies getting information to people outside of the organization when necessary.Mid-sized and large businesses might use Microsoft's Dynamics GP, Sage Group's MAS 90 or MAS 200, Oracle's Peoplesoft or Epicor Financial Management.Small businesses might use Intuit's Quickbooks, Sage Peachtree Accounting, or Microsoft's Small Business Accounting but there are many others.These documents might have a tangential relationship to the company's finances, but excluding the standard footnotes, they are not really part of the company's financial recordkeeping.Many of Lehman's systems were arcane, outdated or non-standard." The examiner decided to focus his efforts on the 96 systems that appeared most relevant, and the examination required training, study and trial and error just to learn how to use the systems.Before there were computers, AISs were manual, paper-based systems, but today, most companies are using computer software as the basis of the AIS.In 2002, WorldCom internal auditors Eugene Morse and Cynthia Cooper used the company's AIS to uncover 4 billion in fraudulent expense allocations and other accounting entries.