Definition of Accounting Information Systems

Updated April 17, 2017

Accounting Information Systems (AIS) are systems that are used to record the financial transactions of a business or organisation. The system combines the methodologies, controls and accounting techniques with the technology of the IT industry: computers, software and the user interface. The software used to track transactions provides internal reporting data, external reporting data, financial statements, and trend analysis capabilities. This information is essential to decision makers and top executives


The ledger book and pencil have been replaced by a computer and keyboard. Since the data is entered by people, errors in the data do still occur. The software records the data into accounts that track to the proper places within the assets, liabilities and equity columns. This information can be queried, combined, sorted, and reproduced to create many different evaluative tools or reports.

Input Devises

The input devices are computers, clone workstations, fax machines, and scanners. The secondary input tolls are the keyboard and mouse. All of these tools are available to help get the information into the storage drive of the computer system. The software that the user interfaces with can be either server or we based. Software loaded onto a company server is much more secure than information downloaded to a web based software package. It is important to remember to back up your material twice every day.

Output Devises

When you want to create a statement or report you will need to extract the information from the accounting information system through an output devise. These kinds of devises include printers, electronic transfer methods or PDAs. The information entered goes through a process of being coded by the software. This way, the computer generates the financial reports, and the user does not have to spend her time creating one. As long as the data was entered properly, the data that comes out will be accurate.

The Effects of AIS

Accounting information systems come in all sizes. The software that a large company uses will be very different from a small business. Large corporations have complex accounting issues like: derivatives, real estate, stocks, bonds, investments and multiple divisions, locations, and products. Smaller companies often do not have as many of these complex issues. Therefore, the software has to be much more robust as does the AIS itself. The enterprise resource planning system (ERP System) is large-scale AIS that are used for such companies. They use high end technology that is present throughout the organisation. These large systems also have applications in the supply chain management and financial reporting arenas. The accounting regulation and code is built into the software.


Accounting information systems have made the job of bookkeeping and accounting much easier. The knowledge needed to be an accountant is still necessary. However, much of the time intense work can now be done with fewer employees in a shorter time period. Accounting information systems have revolutionised the industry of accounting, tax compliance and attestation.

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About the Author

Michael Owens is a corporate recruiter and business owner in Houston, TX. He joined Demand Studios in 2009, writing for eHow Money and eHow Business & Personal Finance. Michael has a master's certificate in accounting from Keller Graduate School of Management.