Accounting Information System Descriptive case: SAP

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2012-11-08T12:25:15Z
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The effect of technology in today’s business world cannot be underestimated, the advent of technology has brought significant changes to the way of life of many individuals, businesses, social systems etc. Technology has provided us with new tools for communicating, acquiring and sharing knowledge and information. In this regard for businesses to remain competitive and achieve their aim they have to rapidly adjust business practices, techniques, methods and functions to new technological innovations. The impact of technology on accounting has brought very subtle changes to accounting itself but has greatly changed the accounting practices, methods, techniques and the way accounting books are kept. Like any other business function, information technology has facilitated the accounting function thereby making the work of the accountant to become easier that is technology has speed up the process of producing financial statements like income statements, balance sheets etc. In this light it is important to investigate the effect of information technology on devices which are used to produce these financial statements (accounting information systems). Accounting information system is defined as a system which collects, records, stores and processes data to provide information for decision making (Romney and Steinbart, 2008). This implies that the purpose of an accounting information system is to process the financial data of businesses and provide users with necessary information.
Purpose: This research addresses the question related to the effect of modern information technology on accounting information systems. The first part of this research consist of detailed theoretical knowledge on accounting information systems, this section is followed by how modern information technology changed the accounting information systems from «stand alone» systems to accounting information systems which are integrated to all business functions , the next section is a short introduction of the SAP Company and its products. The area of focus is on the SAP R/3 integrated systems with special emphasis on the functions and constituents of the financial accounting and controlling modules which performs the accounting task in SAP. Methodology: After doing extensive literature review on accounting information systems and the changes it is undergoing with the influence of modern information technology, we decide to do an illustrative case by using SAP. From this point, the focus is on the financial accounting and controlling modules of the SAP R/3 application which performs the accounting task in SAP. After a thorough analysis of the literature review and the illustrative case, we came out with some findings. Findings: The findings from our research led to the conclusion that the impact of modern information technology is beneficial to the accounting function and the organization as a whole because it automates the accounting information systems thereby reducing the work load of accountants that is accountants no longer have to perform time consuming tasks like recording journal entries posting these entries to ledgers accounts and preparing trial balance as a result accountants become more involved in dynamic functions of the organization. Further, it allows information to be available on a real time basis, thus providing managers with a real time capability to make more informed and accurate business decisions.

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Accounting Information System, SAP
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