Theories And Progression In Accounting Information Systems

Discussion and Analysis

The value of the accounting information is relevant and critical irrespective of the nature of the organization, (i.e., Whether it has been formed with the purpose to earn profit or not) but still there are various aspects which are to be analyzed in detail so as to bring into the notice the thin line of differences lying between them (Arnott, Lizama, & Song, 2017). In order to assist the process of this analysis the four different articles, i.e. Bansah, EA (2018), ‘The threats of using computerized accounting information systems in the banking industry’, Accounting & Management Information Systems / Contabilitate si Informatica de Gestiune, vol. 17, no. (3), pp.440–461 Jiwon Suh1, J. S. ed., Harrington, J. and Goodman, D. (2018) ‘Understanding the Link Between Organizational Communication and Innovation: An Examination of Public, Non-profit, and For-Profit Organizations in South Korea’, Public Personnel Management, 47(2),pp.217–244,  Stearman, S. W. 1,. (1995) ‘The Not-for-Profits Toolbox’, Journal of Accountancy, 180(3), pp.50–62, Kneževi? S., Stankovi?, A. and Tepavac, R. (2012) ‘Accounting Information System as a Platform for Business and Financial Decision-Making in the Company’, Management (1820-0222), (65), pp. 63–69. doi: 10.7595/management.fon.2012.0033. ALIEID, E. E. M. (2016) ‘The Role of Accounting Information Systems in Making Investment Decisions’, Internal accounting & Risk Management, 11(2), pp. 233–242 have been accessed through the process of extensive online search. There are major aspects discussed in the following sections in relation to these articles by way of summarised description and development of these theories. Some common and different themes were also noticed in these articles along with its managerial implications and finally the report focuses the attention on the study limitation and future research direction proposed in these articles.

Bansah, EA (2018), ‘The threats of using computerized accounting information systems in the banking industry’ Accounting & Management Information Systems

In this article the study is aimed at investigating the various sources along with causes due to which the presence of susceptible vulnerabilities have been noticed by the financial firms using computer assisted information system together with the measures available to mitigate the impact of these risks (Alexander, 2016). The major sources for such risks as identified are the threats from the outsiders, virus attacks, power failures etc, The main causes for the same as described were weakness in the internal control system, unauthorized access and copying of data, lack of the system to take the frequent back up along with infrequent system software updates and lack of the appropriate policy for the system usage. But there is lack of measures noticed for the prevention of these risks, hence it is better to give proper attention before their occurrence.  

Jiwon Suh1, J. S. ed., Harrington, J. and Goodman, D. (2018) ‘Understanding the Link between Organizational Communication and Innovation: An Examination of Public, Non profit, and For-Profit Organizations in South Korea’, Public Personnel Management (Choy, 2018).

This article focusses on the media richness theory which talks about the fact that positive communication can have a positive impact so as to introduce innovation in the organizations of the profit oriented approach. Similarly in case of the not for profit organization it is the meeting with the executive director and number of communications channels used by it that brings about the innovation, but nothing has been noticed in case of the effect of such communication for the public sector undertaking.

Common Themes Amongst Various Studies Conducted

Stearman, S. W. 1, (1995) ‘The Not-for-Profits Toolbox’, Journal of Accountancy, 180(3), pp.50–62, Kneževi? S., Stankovi?, A. and Tepavac, R. (2012) ‘Accounting Information System as a Platform for Business and Financial Decision-Making in the Company’

As per this article at first the categorisation of the organisations information system as qualitative and quantitative has been made (Visinescu, Jones, & Sidorova, 2017). The second thing is the subcategorization of the quantitative information as financial and non financial information has been made. In the financial information the relevance of the accounting information generated through the basis of the double entry book keeping system which are relevant both for the internal and external users of such financial information has been considered. Further it prescribes the qualitative characteristics of such accounting or financial information system like availability, reliability etc. so as to assist the managers to take significant business and financial decisions based on such accounting information system.

1. E. M ALIEID, (2016) The Role of Accounting Information Systems in Making Investment Decisions’, internal accounting & Risk Management

As per this article the use of the accounting information or its relevance while making the investment or capital budgeting information has been discussed. It clearly says that though the accounting information has the highest significance in the day to day administrative decision, but the same is not applicable in case of capital budgeting decision (Farmer, 2018). As in capital budgeting decision various tools such as average rate of return, net present value, internal rate of return and payback period etc. are used wherein only the average rate of return where the accounting information is of utmost importance and in case of other tools it is simply used either to predict the cash flow from operating activity or the calculation of the weighted average cost of capital.

The major common themes noticed in all of these given articles are summarized hereunder:

1. All of the articles uniformly accept that it is the accounting information system which has its significant influence on the successful working of any organization.
2. In all of the above articles the accounting information system has been recognized as significant in making decisions by the managers(Alieid, 2016).
3. Though the qualitative information has its own relevance but more important is the quantitative accounting information so as to assist the decision making process.
4. All of the above articles emphasizes the need to maintain the accurate accounting information(Heminway, 2017).
5. Without the accounting information, no matter which types of tools or measures are available in the hands of the managers it can never assist to make significant managerial decision.

The major differences amongst these articles are summarized as follows.

1. The first article is primarily focused to reveal the various sources and causes of risks associated with the use of computerized based accounting system primarily in the banking industry. It further recognizes that the best measure to prevent the probability of these risks is to pay proper attention before their occurrence.
2. The second article talks about the impact or the influence of the organizational communication depending on the nature of the various organization which may either be profit oriented or may be not for profit organization and the public sector undertaking organization too. It further talks about the means of communication or the ways to be communicated within or outside the organization(Dichev, 2017).
3. The third article which recognizes the relevance of the accounting information system both for the internal and external users of such information and the qualitative characteristics which it should possess in order to assist the decision making for the business and financial decisions(Jiwon Suh1, 2018).
4. The fourth article talks about the use of accounting information system while making the significant investment decision .It is because the various financial tools that are used while making these capital budgeting decision and the use of the accounting information along with these tools of analysis differ depending on the use of the specific tool or techniques of the capital budgeting(Kew & Stredwick, 2017). 

The management implication of the above study and findings are mentioned here under:

1. The first article clearly specifies that the use of computer based accounting system has imposed a large amount of risks associated with the preparation and presentation of the accounting information system which demands the careful dealing of these risks with the appropriate measures.
2. The second theory suggests the managers that it is at first they need to see the accurate nature of the organization before the use of various means of communication .It is because as the nature of organization varies so as the means of communication too demand the different means of communication(Werner, 2017).
3. The third article says that in order to make the business and financial decision it is only the quantitative information in form of Accounting information that is to be considered, hence they should focus on this aspect only.
4. The fourth article tells the managers that it is the technique they choose to analyze the capital budgeting decision that finally decides whether the particular accounting information shall be relevant or not(Linden & Freeman, 2017).

Conclusion – Study limitation and future reference 

Each of the above articles has been drafted on the basis of the significant case study made by the concerned research scholar and appropriate care has been taken by them while reaching to the final conclusion. Hence the only limitation underlining the above studies is that before applying the theory prescribed through these article, the manager needs to make the careful analysis of each and every aspect of his own organization, as even though the final conclusion may be same, but there are limitations associated with these case studies too, hence it is suggested to consider these limitations as well.

References

Alexander, F. (2016). The Changing Face of Accountability. The Journal of Higher Education, 71(4), 411-431.

Alieid, E. E. (2016). The Role of Accounting Information Systems in Making Investment Decisions. Internal Auditing & Risk Management, 11(2), 233-242.

Arnott, D., Lizama, F., & Song, Y. (2017). Patterns of business intelligence systems use in organizations. Decision Support Systems, 97, 58-68.

Choy, Y. K. (2018). Cost-benefit Analysis, Values, Wellbeing and Ethics: An Indigenous Worldview Analysis. Ecological Economics, 145. Retrieved from https://doi.org/10.1016/j.ecolecon.2017.08.005

Dichev, I. (2017). On the conceptual foundations of financial reporting. Accounting and Business Research, 47(6), 617-632. doi:https://doi.org/10.1080/00014788.2017.1299620

Farmer, Y. (2018). Ethical Decision Making and Reputation Management in Public Relations. Journal of Media Ethics, 33(1), 1-12.

Heminway, J. (2017). Shareholder Wealth Maximization as a Function of Statutes, Decisional Law, and Organic Documents. SSRN, 1-35.

Jiwon Suh1, J. S. (2018). ‘Understanding the Link Between Organizational Communication and Innovation: An Examination of Public, Nonprofit, and For-Profit Organizations in South Korea. Public Personnel Management, 47(2), 217-244.

Kew, J., & Stredwick, J. (2017). Business Environment: Managing in a Strategic Context (second ed.). London: Chartered Institute of Personnel and Development.

Linden, B., & Freeman, R. (2017). Profit and Other Values: Thick Evaluation in Decision Making. Business Ethics Quarterly, 27(3), 353-379. Retrieved from https://doi.org/10.1017/beq.2017.1

Visinescu, L., Jones, M., & Sidorova, A. (2017). Improving Decision Quality: The Role of Business Intelligence. Journal of Computer Information Systems, 57(1), 58-66.

Werner, M. (2017). Financial process mining – Accounting data structure dependent control flow inference. International Journal of Accounting Information Systems, 25(1), 57-80.