Importance Of Accounting Information System

Title As a business owner, it’s important to feel confident in the tools you use to run your business. Tools, from your employees to the different types of business systems, help you run your business smoothly and efficiently. But trying to learn, on your own, about a concept or system that is completely new to you can turn up fruitless and be time consuming. This is unnecessary stress in addition to the expected amount of stress that comes along with running a business. So, to give you peace of mind, I will enlighten you through clear definitions and thorough explanations, on the basic accounting equation, the four basic financial statements and their key elements, and the purpose of accounting information systems, so that you will be able to make an educated decision on an accounting information system, which will enable you to run your business smoothly and efficiently. In accounting, there is a basic equation that shows the relationship between a company’s assets and claims to assets, which is fittingly called the basic accounting equation. Claims to assets is further divided into liabilities and stockholders’ equity …show more content…
A reliable AIS will meet five basic principles identified by the American Institute of CPAs: security, confidentiality, privacy, processing integrity, and availability (Wiley). A secure AIS will only allow people who are authorized to access the system. Sensitive information that is put into the system will remain confidential, as it is protected from any unapproved releases. All customers’ personal information are collected, used and disclosed in an appropriate fashion, ensuring their privacy. Processing integrity is important as a lot of a company’s financial information is not only used for decision making, but also for legal purposes. With proper authorization, data is processed correctly, completely, and in a timely manner. Lastly, a reliable system will be available for any