Discuss about the Accounting Information System the in Public Sector.
Accounting Information System is also known as AIS in short and is described as a particular procedure that helps in gathering, storing and processing accounting as well as financial data and these are usually used by a firm’s internal users. These data are collected for the purpose of investors, tax authorities and creditors and as these are computer-based procedures, it also assists in tracking all activities (accounting) of a firm together with the information technology resources. AIS bring together the GAAP (Generally Accepted Accounting Principles) (traditional practices) with modern information technology resources. There are various elements found in the AIS that play a significant role in the “accounting cycle”, these include – customer information, employee information, revenue, tax information and expenses[1]. In addition, these data include analysts’ reports, sales order, check resisters, ledger, inventory, purchase requisites, invoices, trial balance, payroll and fiscal declaration information. Therefore, nowadays, selection of an accurate AIS/ ERP system based on the business type and size has become an obligatory factor[2]. Thus, in this report, business process of a Bakery firm has been described in detail and along with it the selection of vendor and software have been done for better operation of the business.
A baker is personnel who bakes breads, cakes and biscuits by the help of oven and other heat sources and sells them in market. The workplace where a baker bakes cakes, biscuits and breads and manufactures products is termed as bakery. A baker is also known as Pastry Chef and this can be of several kinds, these are – Baked Goods Producer, Bread Maker, Retail Baker, Commercial Baker and Bakery Chef. Generally, a baker mixes all the ingredients according to the particular recipe and bakes into various types of breads, pastries, cookies, cakes and biscuits. Then the grocers, wholesalers, restaurants and institutional food services sell these food products to the customers. Moreover, for maintaining a great quality of the food, the baker checks the quality of each of the component before preparing the food. Additionally, the baker also makes various equipments for baking purpose of several kinds of food in an accurate way[3]. Moreover, the baker mixes all the components of food with the help of a blender for making the mixture perfect. At first, the baker rolls, kneads, shapes and cuts the dough in an accurate size as per the requirement. Then, he places the particular dough within the pan, then shapes on the sheet, and keeps it on the oven at an applicable temperature for baking the food item on hot ovens or grills. Finally, the baker scrutinizes whether there is any change in the color of the food item, its state and then several toppings like glazes, icings and many more are added on the top of the finally baked item by the helps of spatulas and brushes as per the requirement. It has been found that the main activities of the particular business i.e. bakery firm are distribution of the manufactured goods to the clients, production of baked food products, employment of employees and accounting of the operational actions of the business. Other activities of the business are – to bake perfectly at accurate temperature, to accomplish the personnel accountabilities and also to control the organization’s inventory. Furthermore, sanitation, safety and budgeting are also regarded as chief activities of the particular organization.
Incorporation of Key Business Procedures
It is a common factor that for regulating a firm, several activities are needed for running it efficiently. Nonetheless, among all the actions, some are obligatory and for the particular bakery firm the indispensable procedures include – periodical analysis, determination of cost of sales and cost efficient production method[5]. Additionally, this process of the business operation also integrates accurate payroll structure, analysis of data and research on fiscal declaration and taxation payment[6].
The matter that is of more concern in case of any medium scale bakery firm is the deficit of implementation of accurate accounting system and proper data recording system[7]. Thus, in this case also the specified organization (bakery firm) should implement the following procedure of business for making the business operations more effective.
As per the report, the concerned organization is a medium scale bakery firm, so, its business operations are related to a manufacturing firm. Additionally, this bakery organization manufactures various kinds of goods and this include different types of constituent materials and methods[8]. As a result, this firm should integrate a perfect account system, which is capable to determine the costs of manufacturing of all goods perfectly.
The particular system of manufacturing several kinds of food items is generally accounted in a particular process that makes the firm able to manage all the products costs and assists in creating more cost efficient systems of production[9].
Generally, bakery is considered as FMCG manufacturer, so, it should implement particular type of method that can analyze the fiscal situation of the firm for a short time easily[10].
It can be said that for every firm, it is an important thing to possess an accurate payroll structure and a proper accounting system. As these systems, help in paying salary as well as other contributions to the employees.
Usually, within a firm, various kinds of data and information are available and these are associated with the business operations. Therefore, these data should be discussed in detail and conserved properly through the incorporation of accurate technologies.
The specified medium scale bakery firm generally makes the fiscal declarations every year. However, this should be prepared by the help of a proper accounting system especially, which can help the firm to prepare a critical pattern of fiscal declaration[11].
It has been noted that for every firm, payment of taxation has become a significant debt[12]. Therefore, the particular bakery firm should support these methodologies, which can make the specified procedure of tax return simpler.
The inclusion of key procedures of business is considered as an important factor as accurate output is necessarily required for attaining the firm’s goals. Therefore, for analyzing the above stated methods, the below stated results can be delivered and this might assist the specified firm to operate effectively and profitably.
The cost of sales of any product is taken as the main structure for assembling the selling price of the manufactured goods or services. Therefore, it is considered as a significant factor for the firm’s management department as it assists in incorporating a proper accounting or costing system. This will help the bakery firm to determine the appropriate cost of sales. Additionally, this implementation strategy of appropriate method of pricing also guides the organization to detect the selling prices of the products (baked food items) in a systematic manner. In addition to this, the detection of the selling prices of different food items (baked) will also assist the organization to modify, change and incorporate the perfect pricing strategy.
As per the particular report, this study of accounting system has been studied for a medium scale bakery, so all the activities of the corporation are equivalent to a manufacturing company. As a result, according to a manufacturing unit, within this bakery firm, many indirect expenses rise for ineffective utilization of material or labor[13]. Moreover, the cost control system is able to detect the factors that are liable for unproductive usage and assists the specified firm to eliminate these factors.
According to the annual analysis of the data and information, it can be said that these are associated with the fiscal matters. As it would assist the management department of the bakery firm, this will help to understand the firm’s operations and performances for a short duration of time. Therefore, this will become relatively simpler for the managers of the organization to undertake different defensive measures. Nevertheless, if the result of this particular analysis becomes negative and certain positive traits can be detected for the accomplishment of the corporation for a short span of time. Moreover, this can also use the similar factors for long run.
It has been found that the elimination of the particular features for extreme costs and the development of the efficiency of the level of production and other actions of the organization assist in increasing the firm’s profitability. Moreover, this specified organization i.e. bakery firm can also be considered as a capable corporation for analyzing the information gathered and those are related to the recent market situation for setting the marketing strategies accurately.
The particular medium scale bakery organization requires accurate accounting software and should possess the below mentioned features:
Accounting software should contain certain particular features that might record the production expense effectively. Moreover, an accounting software should remain capable to generate fiscal reports according to the demand[14]. In addition to this, the particular software of accounting can be represented as a contrast among the various kinds of cost items for various periods.
According to the researcher, generally a medium sized bakery firm has over 1000 accounting transactions in a specified accounting year. Based on the perspective of an accounting expert, all the transactions (accounting) are uniformly noteworthy and relevant, particularly for the fiscal declarations of the corporation. Furthermore, the fiscal declarations of the previous time-period are also required for evaluating the performance of the firm. Therefore, the specified accounting software should consist of information recording system and data intermittently. The cause for this is that the procedure of recording might also assist in bringing out the data, whenever needed and can be taken out from the accounting software.
It has been found that the accounting software provides opportunities towards the basic construction of economic. As a result, this should compose of perfect systems for accounting the inventories, creditors and debtors. Moreover, the payroll system of accounting aids to record all the salary payments and other fiscal benefits of the company’s employees. In addition, this system is also composed of various characteristics that might assist in tracing the transactions of the business on a regular basis[15]. Furthermore, it should also give certain information in a recapitulated way about the fiscal declarations. In addition to these, internal network of the firm should regulate the software and security should be included so that the picked up individuals can only get admission to the vital data.
Figure 2: Requirement of Systems[16]
Accounting Software Package Vendors
As per the stated needs, primarily three vendors have been selected for accounting package and for gathering details about every accounting software packages. The essential vendors include – SAP, MYOB and DacEasy.
Opined to the opinion of the investigators, various kinds of accounting software are there that are available presently. Nonetheless, the particular medium scale bakery firm has a single option regarding selection of the most appropriate option among all kinds of software (accounting) on the basis of the size and structure of the particular business operation[17]. According to further study, the software of accounting can primarily be differentiated into three kinds, these are – high-end software, low-end software and medium-end software.
As a result, this can be commanded that the medium scaled bakery firms should select the medium-end accounting software for operating their business operations smoothly. Moreover, this particular accounting software might also assist the organization to serve its objectives efficiently. Nonetheless, the inclusion of the high-end accounting software within a medium-scaled bakery firm might result into increased expenditure. Moreover, this might also require a long time for including the specified accounting software.
Assessment of the Characteristics of the Accounting Software Packages
As per the investigators, MYOB and DacEasy are the two most useful accounting software packages that are suitable for medium sized or small sized businesses. Depending on the detailed study, this can be said that both MYOB and DacEasy, the accounting software is constituted of four portions – debtors, creditors, pay structure and stock[19]. Generally, the fiscal reports of the organization can be prepared in many ways. Nonetheless, the analysis of the software can be done on the basis of several grounds, such as – ease in software usage, helps in the process of documentation, its scalability and substitutes of reporting.
It has been found that both the online and printed documents can be made through usage of both DacEasy and MYOB software systems. According to the researchers, the DacEasy software usually assists a business to detect a perfect location within the index. There are many substitutes that assist the managers of a firm to search through help button and this button is positioned on the screen. On the contrary, for MYOB, this help button is positioned on each screen. Therefore, in this particular case, data can be developed quickly.
It has been found that DacEasy helps in setting up deposits directly. Additionally, this particular accounting software features the employees, quarter, tax deposits, month and yearend with the intension to structure the payment. On the other hand, for MYOB, the payment pattern is manageable by utilization of various options, but, in this system, the employees’ status cannot be individualized.
The gap between the pricing pattern of both accounting software i.e. MYOB and DacEasy cannot be differentiated distinctly. The particular edition of single usage has been sold, but, multiple user editions are recently networked.
It can be said that construction of MYOB is relatively easier than DacEasy and is also considered as suitable for using. So, it guides the new comers of fiscal management to construct the accounting tasks[20]. In addition, installation method of MYOB is also simple and any portion of it is available through navigation bar. Besides, DacEasy can also be operated easily and the clients get other options of navigation through screen from one to other section. However, the design of tool bars is not suitable for the clients as it is not structured accurately.
Generally, DacEasy provides options regarding time billing and payroll section can be filled up with time billing data. Therefore, this report is attained on time and in case of MYOB billing duration and reference can be set up for particular credit term.
DacEasy has lower flexibility to generate report and it is capable to develop 50 various types of reports. However, MYOB is able to produce over 190 types of reports and this would help in capturing and represent data about vendors, employees, organization and customers.
In case of DacEasy, vendor section is comprised of various accounts payable, such as – printing cheques, managing vendors, quotes and purchase order. On the other hand, MYOB bears quotes, e-payment, tax forms and purchase orders and these can be printed easily. In addition, it has been pointed out that this software is unable to develop credit memos for vendors.
Usually, DacEasy assists to feature the customer details – sales, banking, invoices and many more. Moreover, the goods to be transported cannot be predicted and the invoices via email are unable to send by using this system. However, MYOB are able to manage accounts receivable easily[21]. In addition, computations of customer charges, various charges and incomes can be easily performed. Nevertheless, shipping as well as shipping costs cannot be traced and projected respectively, as this software does not provide shipment instrument.
MYOB is the most suitable accounting software for the particular medium-scaled bakery firm as it will help the business by guiding the process to prepare fiscal reports and it is also user-friendly[22]. Moreover, there is no difference between the costs as the package of cost is identical to each other. Furthermore, its installation method and structure is also easier and it provides facility of bidirectional transfer. In addition, MYOB is more flexible than other accounting software (DacEasy). Therefore, MYOB provides various amenities during billing time. In case of MYOB, average and standards costs, LIFO and FIFO methods can be utilized for calculating inventory cost[23]. Moreover, the early learners of financial management section can use this software, as it is simple and easy. As a result, a medium-scaled bakery should use the MYOB accounting software for running the business smoothly.
Figure 3: Facility of MYOB[24]
Conclusion
Thus, it can be concluded that incorporation of MYOB accounting software in a medium-scaled bakery business is the most suitable one, as; it serves competence to print the fiscal charges such as tax forms, purchase order and the consumer related invoices. In addition to this, the accounting software MYOB generally holds multiple users in security level. The reason behind this is that MYOB assists in transmitting the collected data and information over the internet or the organization. In addition, it has been found that MYOB is relatively simpler to use and is also less expensive.
References
Bonollo, E., Lazzini, S. and Merli, M.Z., 2016. Innovations in Accounting Information System in the Public Sector. Evidences from Italian Public Universities. In Strengthening Information and Control Systems (pp. 199-216). Springer International Publishing.
Chang, H., Ittner, C.D. and Paz, M.T., 2014. The multiple roles of the finance organization: Determinants, effectiveness, and the moderating influence of information system integration. Journal of Management Accounting Research, 26(2), pp.1-32.
Christensen, H.B., Nikolaev, V.V. and Wittenberg?Moerman, R., 2016. Accounting information in financial contracting: The incomplete contract theory perspective. Journal of Accounting Research, 54(2), pp.397-435.
Collier, P.M., 2015. Accounting for managers: Interpreting accounting information for decision making. John Wiley & Sons.
Demski, J., 2013. Managerial uses of accounting information. Springer Science & Business Media.
Demski, J., 2013. Managerial uses of accounting information. Springer Science & Business Media.
Diatmika, I.W.B., Irianto, G. and Baridwan, Z., 2016. Determinants of Behavior Intention Of Accounting Information Systems Based Information Technology Acceptance. Imperial Journal of Interdisciplinary Research, 2(8).
Du, K., Huddart, S. and Xue, L., 2015. Accounting Information Systems and Asset Prices.
Guragai, B., Hunt, N., Neri, M. and Taylor, E.Z., 2014. Accounting Information Systems and Ethics Research: Review, Synthesis, and the Future. Journal of Information Systems.
Ibrahim, A., 2013. Impact of Accounting Information System onthe Quality of Financial Information-An Applied Studyofthe Ministry of Finance and National Economy (Doctoral dissertation, Sudan University of Science and Technology).
Ismail, W. and Ali, A., 2013. Conceptual Model for Examining the Factors that Influence the Likelihood of Computerised Accounting Information System (CAIS) Adoption Among Malaysian SME. International Journal of Information Technology and Business Management, 15(1), pp.122-151.
Jiao, F., 2016, March. Risk Assessment and Control for Accounting Information System Based on Fuzzy Analytic Hierarchy Process. In Measuring Technology and Mechatronics Automation (ICMTMA), 2016 Eighth International Conference on (pp. 580-583). IEEE.
Jones, N., 2014. ACCTG 621 Accounting Information Systems, Sections 1 and 2.
Mancini, D., Dameri, R.P. and Bonollo, E. eds., 2015. Strengthening Information and Control Systems: The Synergy Between Information Technology and Accounting Models (Vol. 14). Springer.
Meng, F., 2014, August. Design of Accounting Information System of Modern Enterprises under Informatization Environment. In 2014 2nd International Conference on Education Technology and Information System (ICETIS 2014). Atlantis Press.
Mesbah, K., Jalil, A. and Yuserrie, Z., 2015. Validation of the Theoretical Framework for Adoption of Accounting Information System Using Structural Equation Modelling. International Journal of Industrial Management (IJIM), 1, pp.1-10.
Pastukhov, A., 2015. Automatic control and maintaining of cooling process of bakery products. Agronomy Research, 13(4), pp.1031-1039.
Prasad, A. and Green, P., 2015. Organizational competencies and dynamic accounting information system capability: impact on AIS processes and firm performance. Journal of Information Systems, 29(3), pp.123-149.
Susanto, A., 2016. The Influence of Accounting Information System Quality to Accounting Information Quality and its Implications to the Good Study Program Governance. International Business Management, 10(24), pp.5767-5776.
Taheri, S., Momeni, A.R. and Hashemi, H., 2016. Analyzing The Result Of The Effect Of Information Technology On Qualitative Features Of Information In Accounting. Journal of Current Research in Science, (1), p.623.
Wang, F., 2015. Research on the problems and countermeasures of enterprise accounting informatization. Information Management and Management Engineering, 94, p.327.
Wang, P., Che, F., Fan, S. and Gu, C., 2014. Ownership governance, institutional pressures and circular economy accounting information disclosure: An institutional theory and corporate governance theory perspective. Chinese Management Studies, 8(3), pp.487-501.
Wijaya, R.E., Ludigdo, U., Baridwan, Z. and Prihatiningtias, Y.W., 2015. Paradigm Blurred: Opera Cake in Management Accounting Information Research. Procedia-Social and Behavioral Sciences, 211, pp.859-865.
Zhang, L. and Ni, G.A., 2016. Research on Accounting Information System Based on Business Process. International Journal of Simulation
[1] Prasad, A. and Green, P., 2015. Organizational competencies and dynamic accounting information system capability: impact on AIS processes and firm performance. Journal of Information Systems, 29(3), pp.123-149.
[2] Collier, P.M., 2015. Accounting for managers: Interpreting accounting information for decision making. John Wiley & Sons.
[3] Pastukhov, A., 2015. Automatic control and maintaining of cooling process of bakery products. Agronomy Research, 13(4), pp.1031-1039.
[4] Du, K., Huddart, S. and Xue, L., 2015. Accounting Information Systems and Asset Prices.
[5] Demski, J., 2013. Managerial uses of accounting information. Springer Science & Business Media.
[6] Mesbah, K., Jalil, A. and Yuserrie, Z., 2015. Validation of the Theoretical Framework for Adoption of Accounting Information System Using Structural Equation Modelling. International Journal of Industrial Management (IJIM), 1, pp.1-10.
[7] Jones, N., 2014. ACCTG 621 Accounting Information Systems, Sections 1 and 2.
[8] Jiao, F., 2016, March. Risk Assessment and Control for Accounting Information System Based on Fuzzy Analytic Hierarchy Process. In Measuring Technology and Mechatronics Automation (ICMTMA), 2016 Eighth International Conference on (pp. 580-583). IEEE.
[9] Taheri, S., Momeni, A.R. and Hashemi, H., 2016. Analyzing The Result Of The Effect Of Information Technology On Qualitative Features Of Information In Accounting. Journal of Current Research in Science, (1), p.623.
[10] Susanto, A., 2016. The Influence of Accounting Information System Quality to Accounting Information Quality and its Implications to the Good Study Program Governance. International Business Management, 10(24), pp.5767-5776.
[11] Chang, H., Ittner, C.D. and Paz, M.T., 2014. The multiple roles of the finance organization: Determinants, effectiveness, and the moderating influence of information system integration. Journal of Management Accounting Research, 26(2), pp.1-32.
[12] Ibrahim, A., 2013. Impact of Accounting Information System onthe Quality of Financial Information-An Applied Studyofthe Ministry of Finance and National Economy (Doctoral dissertation, Sudan University of Science and Technology).
[13] Zhang, L. and Ni, G.A., 2016. Research on Accounting Information System Based on Business Process. International Journal of Simulation–Systems, Science & Technology, 17(7).
[14] Bonollo, E., Lazzini, S. and Merli, M.Z., 2016. Innovations in Accounting Information System in the Public Sector. Evidences from Italian Public Universities. In Strengthening Information and Control Systems (pp. 199-216). Springer International Publishing.
[15] Wang, P., Che, F., Fan, S. and Gu, C., 2014. Ownership governance, institutional pressures and circular economy accounting information disclosure: An institutional theory and corporate governance theory perspective. Chinese Management Studies, 8(3), pp.487-501.
[16] Wijaya, R.E., Ludigdo, U., Baridwan, Z. and Prihatiningtias, Y.W., 2015. Paradigm Blurred: Opera Cake in Management Accounting Information Research. Procedia-Social and Behavioral Sciences, 211, pp.859-865.
[17] Mancini, D., Dameri, R.P. and Bonollo, E. eds., 2015. Strengthening Information and Control Systems: The Synergy Between Information Technology and Accounting Models (Vol. 14). Springer.
[18] Meng, F., 2014, August. Design of Accounting Information System of Modern Enterprises under Informatization Environment. In 2014 2nd International Conference on Education Technology and Information System (ICETIS 2014). Atlantis Press.
[19] Ismail, W. and Ali, A., 2013. Conceptual Model for Examining the Factors that Influence the Likelihood of Computerised Accounting Information System (CAIS) Adoption Among Malaysian SME. International Journal of Information Technology and Business Management, 15(1), pp.122-151.
[20] Demski, J., 2013. Managerial uses of accounting information. Springer Science & Business Media.
[21] Christensen, H.B., Nikolaev, V.V. and Wittenberg?Moerman, R., 2016. Accounting information in financial contracting: The incomplete contract theory perspective. Journal of Accounting Research, 54(2), pp.397-435.
[22] Wang, F., 2015. Research on the problems and countermeasures of enterprise accounting informatization. Information Management and Management Engineering, 94, p.327.
[23] Guragai, B., Hunt, N., Neri, M. and Taylor, E.Z., 2014. Accounting Information Systems and Ethics Research: Review, Synthesis, and the Future. Journal of Information Systems.
[24] Diatmika, I.W.B., Irianto, G. and Baridwan, Z., 2016. Determinants of Behavior Intention Of Accounting Information Systems Based Information Technology Acceptance. Imperial Journal of Interdisciplinary Research, 2(8).
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