Accounting system automation (AIS) is a type of information system used to collect, store, process and distribute data related to accounting and financial transactions.
FUNCTIONS OF AIS –
· Collect and store data – All the data related to accounting and financial activities are collected through source documents and entered to journal which is further posted to ledgers.
· Recording transactions – Transactions regarding accounting and financial activities are recorded in the journal in chronological order.
· Safeguarding assets – AIS provides in built internal control to safeguard organisational assets against fraud, misuse, mistake etc.
PROCESSING CYCLES OF AIS –
· Processing cycle – This relates to sub systems within organisation which interacts with accounting department and are involved financial transactions.
· General ledger and reporting cycle – Entries are posted from journal to ledger.
· Data processing cycle – It involves identifying transactions regarding which data needs to be processed and then processing it in 4 stages i.e. Input, Process, Storage and Output along with alert, control and feedback.