Development Of Accounting Information Systems

Developing Accounting Information Systems (AIS) includes five basic steps that include planning, analysis, design, implementation, and support. The time period associated with each of these steps can be as short as a few weeks or as long as several years depending on the objectives.

Planning—project management objectives and techniques The very first phase of AIS development is planning the project. This involves determination of the scope and objectives of the project, the definition of project responsibilities, control requirements, project phases, budgets, and final products.

Analysis - The analysis phase is used to determine and document the accounting and business processes used by the company. These processes are usually redesigned to take advantage of the operating characteristics of modern system solutions.

Data Analysis is a review of the accounting information that is currently being collected by a company. Current data are then compared to the data that the organization should be using for managerial purposes. This method is used primarily when designing accounting transaction processing systems.

Decision Analysis is a review of the decisions that a manager is responsible for making. The primary decisions that managers are responsible for are identified on an individual basis. Then models are created to support the manager in gathering financial and related information to develop and design alternatives, and to make actionable choices. This method is valuable when the primary objective of the system is decision support.

Process Analysis is a review of the company business processes. The organizational processes are identified and segmented into a series of events that are able to either add or change data. These processes can then be modified or reengineered to improve the organization’s operations in terms of lowering cost, improving service, quality, or management information. This method is used when automation or reengineering is the system’s primary objective.

Design The design phase takes the conceptual results of the analysis phase and develops detailed, specific designs that can be implemented in subsequent phases. It involves the detailed design of all inputs, processing, storage, and outputs of the proposed accounting system. Inputs may be defined using screen layout tools and application generators. Processing can be shown through the use of flowcharts or business process maps that define the system logic, operations, and work flow.

Logical data storage designs are identified by modeling the relationships among the organization’s resources, events, and agents through diagrams. Also, entity relationship diagram (ERD) modeling is used to document largescale database relationships. Output designs are documented through the use of a variety of reporting tools such as report writers, data extraction tools, query tools, and on-line analytical processing tools. In addition, all aspects of the design phase can be performed with software tool sets provided by specific software manufacturers.

Reporting is the primary driving force behind the development of an Accounting information system. If the system analysis and design are successful, the reporting process provides the information that helps drive management decision making. Accounting systems make use of a variety of scheduled and on-demand reports. The reports can be tabular, showing data in a table or tables; graphic, using images to convey information in a picture format; or matrices, to show complex relationships in multiple dimensions. There are numerous characteristics to consider when defining reporting requirements. The reports must be accessible through the system’s interface. They should convey information in a proactive manner. They must be relevant. Accuracy must be maintained. Reports must meet the information processing (cognitive) style of the audience they are to inform.

There are three basic types of reports: A filter report that separates select data from a database, such as a monthly check register. A responsibility report that meets the needs of a specific user, such as a weekly sales report for a regional sales manager. The comparative report that is used to show period differences, percentage breakdowns and variances between actual and budgeted expenditures.

The primary data capture devices are screen designs and system interfaces. Storage is through the use of normalized databases that assure functionality and flexibility.

Business flowcharts are used to document the operations of the systems. Modern Accounting information systems use specialized databases and processing designed specifically for accounting operations. This means that much of the base processing capabilities come with the accounting software.

Implementation The implementation phase consists of primarily of construction and delivery. Construction includes the selection of hardware, software and vendors for the implementation, building, and testing the network communication systems. This involves building and testing the databases, writing and testing the new program modifications, and installing and testing the total system from a technical standpoint. The delivery also includes the process of conducting final system and user acceptance testing, preparing the conversion plan, installing the production database, training the users, and converting all operations to the new system.

Tool Sets are a variety of application development aids that are vendor-specific and used for customization of delivered systems. The tool sets allow the addition of fields and tables to the database, along with ability to create screen and other interfaces for data capture. They also help set accessibility and security levels for adequate internal control of the accounting applications.

Security can be available in several different forms. Physical security of the system must be addressed. In most cases,  the equipment for the accounting information systems is locked in a room that is only accessed by technicians. The access to Software controls are set at several levels, depending on the size of the accounting information systems.

The first level of security occurs at the network level, which protects the organization’s communication systems. Next is the operating system level security, which protects the computing environment. Then, database security is enabled to protect organizational data from theft, corruption, or other forms of damage. Lastly, application security is used to keep unauthorized persons from performing operations within the accounting information systems .

Testing is performed at four levels. Stub or unit testing is used to insure the proper operation of individual modifications. Program testing involves the interaction between the individual modification and the program it enhances. System testing is used to determine that the program modifications work within the Accounting information systems as a whole. Acceptance testing ensures that the modifications meet user expectations and that the entire Accounting information systems performs as designed.

Conversion involves the method used to change from an old accounting information system to a new accounting information system. There are several different ways to achieve this goal. One option is to run the new and old accounting systems in parallel for a specified period. Another method is to directly cut over to the new system at a specified point. A third option is to phase in the system, either by location or system function. A fourth is to pilot the new system at a specific site before converting the rest of the company.

Support has two objectives. The first is to update and maintain the accounting information systems . This includes fixing problems and updating the system for business and environmental changes. For example, changes in generally accepted accounting principles (GAAP) or tax laws might necessitate changes to conversion or reference tables used for financial reporting.

The second objective of support is to continue development by continuously improving the business through adjustments to the Accounting information systems caused by business and environmental changes. These changes might result in future problems, new opportunities, or management or governmental directives requiring additional system modifications.