Computerized Accounting and Information Systems

Management Information System (MIS) is used the most common form of information system. A management information system is a system that provides the information necessary to take decision and manage an organisation effectively.

Every medium sized to large organisation has a well established information system that is meant to generate the information required for decision-making. With the increasing use of information system in organisations, Transaction processing systems (TPS) have started playing a vital role in supporting business operations.

Information Technology (IT) follows the GIGO principle (Garbage in-Garbage out), it is necessary that input to the IT-based information system is accurate, complete and authorised. This is a achieved by automated by automating the input, A large number of devices are now available to automate the input process for a TPS.

A simple computerised accounting system accepts the complete transaction data as input; stores such data in computer storage media (say hard disk) and retrieves the accounting data for processing as and when required for generating an accounting report, as output. 

MIS is supportive of the institution's long-term strategic goals and objectives. MIS is viewed and used at many levels by management: Operational, Tactical and Strategic.

General controls relate to the environment (access to programs), application controls relate to specific processing (exception reports), and user controls involve manual verification of results.

Accounting Information System (AIS) identifies, collects, processes, and communicates economic information about an entity to a wide variety of users. Such information is organised in a manner that correct decisions can be based on it. 

In Tally, the shortcut key to export reports to various formats like ASCII, HTML, or XML is ALT+E.

Testing the integrity of system output using test data is a classic method for verifying application controls, which ensure that data is processed correctly.

Testing for the serial sequence of source documents is an application control (input control), not a general control. General controls focus on the environment, such as segregation of duties or access logs.

Application software consists of programs developed to help the user perform specific tasks, such as word processing or accounting.

Data is the raw input that, when processed and organized, becomes information useful for decision-making.

Data entry is the process of inputting data into the computer system so that it can be processed.

Transaction processing systems typically consist of three main components: input, processing, and output.

In an online transaction processing system, the processing of data occurs immediately upon entry to provide real-time results.

Revalidation is the process of verifying that the output generated by a system is correct and consistent with the input data. It acts as a final check to ensure the validity of the processed information.

Data are facts and may consist of numbers, text, etc. These are gathered and entered into a computer system. The computer system in turn stores, retrieves, classifies, organises and synthesizes the data to produce information according to pre-determined set of instructions.

Data validation ensures the accuracy and reliability of input data by comparing the same with some predetermined standards or known as data. This validation is performed by error detecting and error correction procedures. 

A transaction could be internal or external. When a department requisitions material supplies from store, an internal transactions is said to have occurred. However, when the purchase department purchases materials from a supplier, an external transaction take place. The scope of financial accounting is confined to external transactions only.

Data validation ensures the accuracy  and reliability of input data by comparing the same with some predetermined standards or known data. This verification is performed by error detection and error correction procedures.

Transaction Processing Systems (TPS) are among the earliest computerised systems catering to the requirements of large business enterprises. The purpose of typical TPS is to record, process, validate and store transactions that occur in the various functional area of a business for subsequent retrieval and usage.

Real-time processing provides offline outcome in the form of information and reports without time lag between the transaction and its processing. The accounting reports are generated by query language popularly called Structured Query Language (SQL).

Accounting Information System (AIS) identifies, collects, processes, and communicates economic information about an entity to a wide variety of users. Every accounting system is essentially a part of the Accounting Information System (AIS) which in turn is a part of the broader system, viz. the organisation's Management Information System.

The accounting information system (AIS) receives and provides information to the various sub-systems of the institutional/integrated MIS. Accounting information system (AIS) is a collection of resources, designed to transform financial and other data into information.

Revalidation in the context of ATM transactions ensures that the requested action (dispensing money) has been successfully completed and recorded by the system.

A transaction processing system (TPS) collects, stores, modifies, and retrieves the transactions of an organization. These steps involve input, processing, and output.

Data validation is the process of ensuring that data is clean, correct, and useful. It involves checking input against predefined rules or standards to prevent errors.

Real-time processing systems process data immediately as it arrives, providing near-instantaneous output without the delay associated with batch processing.

Reporting is the phase in an information system where data is organized and presented in a format useful for decision-making.

Transaction Processing Systems were originally developed to handle the high volume of data generated by large business enterprises, which required automated record-keeping.

Storage involves keeping transaction data securely. In the context of an ATM, the record of the withdrawal is stored in the database for future reference and reporting.

The Integrated Test Facility (ITF) involves creating a dummy entity (like a department or branch) within the client's system. Auditors then process test transactions through this dummy entity alongside real transactions to verify system integrity.

Tailored (custom) software allows for granular access control, enabling administrators to restrict user permissions based on their specific roles and departmental needs.

The ability to import and export data is a critical feature for accounting software, as it allows for integration with other systems and data portability.

When selecting accounting software, factors like flexibility, the size of the organization, and security/secrecy are all essential considerations to ensure the software meets business needs.