Financial n accounting Essay Example | Topics and Well Written Essays - 1500 words

Financial n accounting - Essay Example In past, these systems include manual processes but now due to technology advancement the accounting information system changed into Computerized Accounting Information System. Improvement in technology have replaced manual accounting system with computerizes ones. As computers become faster, less expensive, and easier to use; all organizations are using computers in their day to day business. With the help of computers, companies can now capture, process, store, and transmit data. It controls the topics which are related to organization’s economic- financial area. It helps in decision-making process, performance evaluation, facilitating company’s transaction and in internal controls through computerized accounting information system. It combines concepts and accounting principles to record, process, analyse the financial information and then produce it to its end users for the purpose of making economic decisions. Firm’s performance can be improved, through oper ational efficiency and increased profitability (Fowzia and Nasrin, 2011, p.1). Software tools in the Computerized Accounting Information System (CAIS) Accounting software This software consists of basic accounting functions like input, processing and output. There are two types of accounting software i.e. low-end software and high-end software. Personal computer based accounting system enable companies to provide better and timely information. Income tax Currently tax preparation software is available for companies. So, even in a short period of time complex calculations can be done. Audit Trial balance software helps auditors to handle different types of adjusting entries, to input the working trial balance and mechanically compute the adjusted trial balance. Word processing Word processing software is used by the accountants to prepare reports, memos, billings and financial statement. Graphics software It is used by the managerial accountants and auditors to graph the data in repo rts and financial statements. Image processing It captures electronic image of data so that it can be stored and shared. Accountants can process all the electronically by just scanning the paper documents in computer. Electronic data interchange A company can exchange documents electronically with other company with the help of electronic data interchange. Electronic funds transfer It enables companies to make collections and payment electronically. So, if companies are in a view to pay for accounts payable to a supplier, it can do it with the help of electronic fund transfer. Purpose of Computerized Accounting Information System Computerized accounting information system (CAIS) can be single programs or even part of a larger system like enterprise resource planning. The purpose of the system is to reduce manual steps in accounting process and offer automated activities in order to improve reporting. Every function plays a minor part in accounting information system. Individual func tions include accounts receivable, accounts payable, fixed assets, payroll, general accounting and cash management. CAIS often have modules that enable accountants to handle financial information related to their accounting tasks. Use of CAIS in the functioning of Organization CAIS saves time, reduce errors and eliminate waste by adopting