SUBMITTED TO:

K.M. GOLAM MOHIUDDIN PROFESSOR DEPARTMENT OF ACCOUNTING & INFORMATION SYSTEMS UNIVERSITY OF CHITTAGONG.

SUBMITTED BY:
MD. ALIUL ISLAM B.B.A (4TH YEAR) CLASS ROLL: 4355 EXAM ROLL: 2005/33 SESSION: 2004-2005 DEPARTMENT OF A.I.S. UNIVERSITY OF CHITTAGONG.

DATE OF SUBMISSION:

1. Definition of Information Technology:

Information technology (IT) is a tool or a system that keeps data and information in an organized fashion for fast access and distribution through the use of computers. It was first called electronic data processing (EDP) in its infancy. According to the PCMag.com Encyclopedia, it also encompasses information management and computer science. Information technology (IT) includes the management information systems (computers, hardware, software, networks) used to automate and support business tasks and decision-making. IT is used to automate simple, routine tasks such as word processing and advanced processes such as production, scheduling and logistics. In this manner, information technology enables businesses to operate efficiently and profitably. The business sector must communicate internally with its workers and externally with its suppliers and customers on an efficient basis. Information technologies including word processing, publishing software, email, internal computer networks, and the internet facilitate these communications. Information technology is a term that encompasses all forms of technology used to create, store, exchange and utilize information in its various forms including business data, conversations, still images, motion pictures and multimedia presentations.

2. Significance of Information Technology In Business:

Information technology has developed rapidly since the 1980s. Its scope and implementation has changed as technology advances and the overall approach to handling information shifts. The need to optimize the vast scale of information continually presents itself which necessitates the need for a system by which this information can be stored, manipulated, and distributed quickly as well as accurately. Information technology plays an important role in accounting processes because it improves financial reporting procedures and prevents errors in financial statements.

Process Improvement
Information technology (IT) includes the management information systems (computers, hardware, software, networks) used to automate and support business tasks and decision-making. IT is used to automate simple, routine tasks such as word processing and advanced processes such as production, scheduling and logistics. In this manner, information technology enables businesses to operate efficiently and profitably.

Cost Reduction
Automation improvements achieved by deploying information technology usually decrease the number of personnel required. Economies of scale gained through the deployment of information technology reduce the overall cost for businesses to produce products and services. This has an overwhelmingly positive effect on the financial goals of a business.

Quality Assurance
Quality assurance entails systematic testing to ensure that a business is producing quality goods and services for its customers. Rigorous quality standards help business outputs meet the required specifications. Quality assurance can be used within processes such as marketing, customer support and accounting, as well as product testing. The effective and efficient processing of information related to achieving quality assurance goals is key to the delivery of quality goods and services to business customers.

Communications
The business sector must communicate internally with its workers and externally with its suppliers and customers on an efficient basis.

Information technologies including word processing, publishing software, email, internal computer networks, and the internet facilitate these communications. Mobile devices including PDAs and Internet-based social media networks are evolving as contemporary information technology platforms for business communications and becoming strategic to the business sector.

Competitive Intelligence
Strategic, competitive advantage plays a fundamental role in the success of a given business within its sector. Information technology has become fundamental to acquiring competitive advantage. The combination of process improvements, cost reductions, communications and quality assurance all contribute to the competitive advantage of a business unit. However, the constant identification and analysis of new risks and opportunities are critical to the ongoing success of a business. Evolving Internet aggregation technologies, including social networks, blogs and subscription databases, are becoming important tools needed to achieve and maintain advantages within the business sector.

3. Accounting Information for Technology and Business:

Technology in accounting business structures has created a market demand for accountants with skills in computer technology into the work force. Information systems and computer applications are mandatory requirements in most colleges if a person is to obtain an accounting degree. Accounting with technology has improved the efficiency of most business modules.

Technology and Cost Accounting

Cost accounting is the lifeblood of any organization with consumers or a client base. Technology, through an accounting information system, allows the collection of data by accountants and managers to make decision pertaining to the cost of operations (expenses) in relation to income and the factors which impact profitability. Cost accounting can be classified as a decision support function enhanced by the use of software and information technology tools to determine overhead and labor costs, job orders, forecasting and process control accounting. Knowledge of automated general ledger programs is important in cost accounting analysis.

Account Auditing and Technology

Merging of traditional accounting concepts with computer technology has improved the area of audit for the review of account discrepancies. For large corporations, account errors can cost millions of dollars. Accounting software applications have integrated resident and custom made program routines to audit accounts. Applied computer technology in the area of audit can randomly select accounts for auditing according to parameters established by management.

Microcomputer and Network Technology

Microcomputers and Local Area Network (LAN) technologies have allowed smaller organizations and businesses compatible tools to automate accounting functions. Personal computers process integrated software accounting programs such as Microsoft Excel, Lotus 1-2-3 (with Domino). Turnkey software applications made for small business accounting such as QuickBooks and Peachtree provide an "out-of-the-box" solution for accounting groups. Turnkey accounting programs are effective for businesses that have less than 25 users on a computer network. Individuals seeking a career in accounting should be familiar with the role of microcomputers and software applications in business accounting.

Management of Accounting Information System

An information system is defined as a process of data transactions updating logical and relational type database structures, including data security and transaction exception reporting. An accounting information system is a management support system that can range from inventory accounting systems to logistical accounting systems. For individuals

seeking to become programmers of accounting business systems, the accounting information systems field focuses on the process of developing data routines, maintaining and cataloging databases, and processing specialized data for periodic reporting.

Educational Requirements
Colleges and vocational schools have two- to four-year curriculum, which highlight use of technology in accounting and business systems. An associate or bachelor's degree in accounting with a background in business management, business accounting or information systems can prepare an individual for the knowledge needed for accounting and understanding the technology used in the career field as it applies to business.

4. The Importance of Information technology in Accounting:

Generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) require a company to prepare full and accurate financial statements. A company's senior management establishes adequate computerized accounting systems to prepare accurate operating reports. Accounting is a business practice that helps firm record operating transactions in financial accounts and

report operating data at the end of each month. On the other hand, computerized accounting involves the tools, methods and computer software and hardware that a firm uses to automate recording and financial reporting processes. Information technology plays an important role in accounting processes because it improves financial reporting procedures and prevents errors in financial statements. Computerized accounting activities help an accountant perform month-end close procedures. These activities also help company report profit information over a period, such as a month or quarter. An accountant uses computerized accounting software to make journal entries in financial accounts, such as assets, liabilities, revenues, expenses and equity. The accountant debits an asset or expense account to increase its amount and credits it to reduce the account balance. The opposite is true for revenue, liability and equity accounts.

5. How Information Technology Improves Customer Service:

Information Technology (IT) has made life easier for customers and businesses alike. Activities and processes that may have taken days to complete now only take minutes. This time is now reallocated to more valuable activities that can benefit the business and the customer. Through IT advances, businesses can serve the customer more effectively and efficiently and the customer receives better customer service.

Faster Service
IT has helped the business deliver faster service to the customer. For example, customers often interact through IVRs (interactive voice response). The IVR system allows the customer to speak her request and the system's "behind-the-scenes" intelligence directs the customer to the proper department. Customers can also place an order outside of normal operating hours with an IVR system. Through the advances made using the Internet, customers can place an order online at their convenience. This allows the customer to interact with the company on their terms and does not place restrictions on the customer.

Records Maintenance
IT has made it easier to maintain customer records. When the customer requests address changes, that information is retained in the computer systems and can be accessed by anyone in the company. If an employee in the sales department needs the information, it can be readily accessed although it may have been updated by a person in the customer service department.

Increased Revenues
IT has aided companies in offering better products and services to the customers. Businesses can analyze customer complaint trends. By using the information in the computer systems, the business can understand where it is not meeting the customers' expectations. When the reasons for the complaints are minimized, customers have a better impression of the company. In turn, the customers purchase more products and are open to products the company may up sell to the customer.

Warning
Do not allow IT to substitute for providing excellent customer service. The customers still expect to be treated properly and respectfully. Also, always allow customers the option of speaking with a representative. Customers

become frustrated when the company is so automated that the person cannot reach a representative. 6.

Computerized Accounting Systems:

Generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) require a company to prepare full and accurate financial statements. A company's senior management establishes adequate computerized accounting systems to prepare accurate operating reports. The biggest impact IT has made on accounting is the ability of companies to develop and use computerized systems to track and record financial transactions. Paper ledgers, manual spreadsheets and handwritten financial statements have all been translated into computer systems that can quickly present individual transactions into financial reports. Most of the popular accounting systems can also be tailored to specific industries or companies. This allows companies to create individual reports quickly and easily for management decision making. Additionally, changes can be made relatively easy to reflect any economic changes in business operations.

7. History Of Computerized Accounting Systems:

Accounting software has changed throughout history. Some computerized systems and software of historical importance include Ada's original computing machine, the IBM 9Pac, Peachtree software, and Quicken software.

The First Computing Machine

The first computing machine ever created was used for accounting. Countess Ada Lovelace worked on a general purpose computing engine. Along with the mathematicians Charles Babbage and Louis Menebria, Ada's writings describe how the computing engine operates and what it can calculate. As the first description of how to build a computer, this is the basis of computerized accounting.

IBM 9Pac
After World War II, large-scale computerized accounting systems were available in the United States. The IBM 9Pac was one of the first programming systems used by business employees that did not require large amounts of specialized programming knowledge. A 9Pac manual

from 1961 explains that this system could be used to add up the amounts of sales recorded by each salesman at a company. Many modern accounting systems are derivatives of IBM's computerized accounting software.

SAP
SAP is a German software company, founded by German computer programmers who left IBM. SAP focuses on large-scale business software. In 1973, the company offered its first software release, called SAP R/1. SAP added additional elements to its software packages to create systems to aid in executive decision making, as well as components that allow automated financial transactions. SAP's original customers were German industrial corporations, and the company is now one of the largest worldwide vendors of computerized accounting software.

Peachtree
Peachtree was one of the first publicly available computerized accounting programs. The company was founded in Atlanta, Georgia, which is famous for its peaches. Peachtree was first sold in 1976 at the Computer System Center, a computer store in Atlanta where the software creators worked. Since it was included with the original IBM PC as well as sold in stores, Peachtree was the first accounting program that was widely known among the general public.

Intuit
Quicken is a computerized accounting program for personal finance. According to its creator, the business software firm Intuit, Quicken was introduced in 1983 and simplified functions such as reconciling checkbooks and tracking budgets. Intuit also introduced QuickBooks, a more comprehensive small business accounting program, and Turbo Tax, an automated program to calculate federal and state income taxes.

8.

Importance Of Computerized Accounting Systems:

Companies often use a computerized accounting system to process and maintain accounting transactions and records. The system absorbs and stores this data by using modules such as accounts payables, accounts receivables, trial balance and payroll. A computerized accounting system is either specifically designed for a certain company or it is

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purchased from a third-party (e.g. Timberline or MAS 200). A computerized accounting system is a valuable tool for many companies.

Speed
The system processes data rapidly. Once the information is keyed into the related module such as payroll or accounts payable, the system processes and stores it instantly.

Automatic Generation
The majority of computerized accounting systems have features such as order-entry and generation of associated invoices. The employer can create accounts for their clients, storing their names, addresses, orders and invoices for as long as necessary. A computerized system also allows the employer to make and print account statements. Further, many accounting systems have a payroll feature, which enables complete payroll processing, including the generation and printing of checks and reports.

Timeliness
The employer is able to print and reprint customer orders, invoices, and all other accounting transactions as required. He can also easily find employees' payroll data such as current address and pay amount without having to search through filing cabinets to locate personnel files.

Eradicates Manual Processing

A computerized accounting system eliminates manual processing. The latter involves processing and recording the company's incomes, expenses, profits, losses, and reconciliation by hand, creating much room for error. Payroll transactions and the business' tax transactions are also recorded manually. With a computerized accounting system, the employer has a smoother record-keeping and balancing process.

Staff Motivation
A computerized accounting system often requires the staff to undergo training to learn new skills, making them feel motivated. Further, the employer can outsource training to a representative from the software company, creating less pressure on staff members to administer the training themselves.

Simplifies Audits
If the federal or state government decides to audit the company, a computerized accounting system simplifies the process. Normally, before the audit takes place, the auditor notifies the employer by mail about the specific documents required for the audit. Depending on the nature of the

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audit, documents may include tax statements, payroll registers and chart of accounts. A computerized accounting system can store many years of information. If the audit requires it, the employer can access information dating from many years back. If, during the audit, the auditor spontaneously requests an accounting document, the employer can quickly retrieve it from the system instead of rummaging through storage boxes to locate hard copies.

Reduces Embezzlement
Computerized accounting software makes it difficult for employees to steal money from the company. For example, if a payroll employee tries to pay herself more than the allowed amount, her theft will most likely be discovered because the accounting system stores all saved transactions.

9. Manual Verses Computerized Accounting:

Manual accounting requires that all journal entries, invoices and other financial documents be created by hand. Computerized accounting allows users to input information into accounting software programs.

Speed
Computerized accounting produces information much faster than manual accounting. Accounting software packages, such as QuickBooks and Peachtree, come with built-in databases that allow users to input data.

Accuracy
Manual accounting systems are prone to mathematical errors and misplaced numbers. With a computerized accounting system, your company data is automatically calculated based on numbers you input.

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Financial Statements
In a manual accounting system, you have to prepare your company's income statement, balance sheet and statement of owner's equity by hand. Information from your journal entries helps formulate your company's financial statements. Computerized accounting systems allow financial statements to be created from information stored in the database.

Cost
The cost of computerized accounting systems can range from hundreds to thousands of dollars for large businesses. A computerized accounting system may save on man hours used for creating financial statements and other reports. For this reason, many small and mid-sized businesses use computerized accounting software.

Reports
Reports are created in a timely manner when using a computerized accounting system. Reports generated from computerized accounting software allow managers to run the company in a more efficient manner. Creating reports in a manual accounting system may lead to more staff frustration and result in having to work with outdated information.

10. ADVANTAGES OF COMPUTERIZED ACCOUNTING:

a. Increased Functionality
Computerized accounting systems have also improved the functionality of accounting departments by increasing the timeliness of accounting information. By improving the timeliness of financial information, accountants can prepare reports and operations analyses that give management an accurate picture of current operations. The number of financial reports has also been improved by computerized systems; cash flow statement, departmental profit and loss, and market share reports are now more accessible with computerized systems.

b. Improved Accuracy
Most computerized accounting systems have internal check and balance measures to ensure that all transactions and accounts are properly balanced before financial statements are prepared. Computerized systems will also not allow journal entries to be out of balance when posting, ensuring that individual transactions are properly recorded. Accuracy is also improved by limiting the number of accountants that have

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access to financial information. Less access by accountants ensures that financial information is adjusted only by qualified supervisors.

c.

Faster Processing

Computerized accounting systems allow accountants to process large amounts of financial information and process it quickly through the accounting system. Quicker processing times for individual transactions has also lessened the amount of time needed to close out each accounting period. Month- or year-end closing periods can be especially taxing on accounting departments, resulting in longer hours and higher labor expense. Shortening this time period aids companies in cost control, which increases overall company efficiency.

d.

Better External Reporting

Reports issued to outside investors and stakeholders have been improved by computerized accounting systems. Improved reporting allows investors to determine if a company is a good investment for growth opportunities and has the potential to be a high-value company. Companies can utilize these investors for equity financing, which they use for expanding business operations.

11. HOW TO PREPARE TO SWITCH FROM MANUAL TO COMPUTERIZED ACCOUNTING:

Switching from manual to computerized accounting is a step-by-step process that can be accomplished easily and efficiently. If it is the end of the fiscal year, you can start with the beginning of the new fiscal year. There is no need to input data from prior periods, except for the year-end financial statements. If it is not the end of the year, you need to decide if you want to wait until the end of the year or input into the system all of the detailed data up to that point in the year.

Instructions: Step 1:
Research and decide on the computer equipment that you will need for your computerized accounting system. Most PCs today have the capacity for an off-the-shelf accounting package for a small business. Make sure that your computer has a hard drive with several gigabytes of storage space. As time goes on your computerized records will grow and you want the computer to last a few years. You also will want word processing and spreadsheet programs, as well as Internet and email capability.

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Step 2:
Set up your computer equipment and establish your Internet connection. This step is important because all accounting software packages will have online help available if you run into a problem. Also as part of your computer setup establish a means of backing up your files. You should backup your data every day or even more often when you work on something critical. Files can be easily backed up on portable drives. It is important to realize that an accounting system is a database from which information is retrieved when needed.

Step 3:
Research and decide which accounting software package is best for your business. Most small companies do fine with an out-of-the-box software package, such as QuickBooks or Peachtree.

Step 4:
Set up the software package by following the built-in menus. Establish a chart of accounts for your general ledger. Set up your bank accounts and add any necessary information about your vendors and your customers.

Step 5:
Enter the detailed transaction data necessary to bring the computerized books up to date. You will need to enter the end-of-year financial statements from the prior year as your beginning balances for the current year. Then key in the detailed transaction data for each month of the current year until you are up to date. If it is the end of the year, simply set up the beginning balances for the New Year and work forward, entering accounting data as transactions and events occur. You are now operating on a computerized accounting system.

Step 6:
Decide if you want prior year financial statements entered into the system. In order to provide history in the computerized records, you can add the financial statements from prior years. You can do this monthly, quarterly or annually going back several years. There is no need to add the detailed transaction data to the history but there should be a trail going back to the manual records.

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12. HOW TO MOVE FROM MANUAL TO COMPUTERIZED ACCOUNTING:

Even a small business can benefit from computerized accounting. While the switch from paper to computers requires an initial transition phase, it could soon pay off in recovered errors and duplications. Once you choose the right software, it's just a matter of creating template files and transferring data from your books and ledgers to the databases and spreadsheets. Learning how to put data to use in reporting, printing statements or billing in familiar formats is the next step. Remember to save your files often and copy data to CDs.

Instructions
Step 1:
Gather all paper components of your manual accounting system. Include expenditure sheets, general ledgers, wage statements, accounts receivable and payable, and any daily written transactions. Collect debit and credit journals, assets and liabilities data, real estate and equity records, and inventory sheets.

Step 2:
Set up computer forms and spreadsheets that mimic your paper accounting system. Create forms and spreadsheet template files for daily, weekly, monthly and yearly accounting activities. Save files using

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specific and meaningful names. Avoid using cryptic names that will only serve to confuse you later when you're looking for data.

Step 3:
Enter data using your computer accounting software. Start with current data and develop a schedule to input data from previous months as desired. Save your files often.

Step 4:
Practice tasks such as retrieving data from your newly created accounting files. Perform a task that would normally be done in your accounting business, but instead of searching for answers on paper, search using your new accounting software. Learn the features of your computer accounting software through its tutorials and help menus.

Step 5:
Save important and end-of-month files on CDs for easy retrieval. Create CDs for client accounts, both as a backup measure and for audits.

Step 6:
Consider getting a backup system for your accounting files. Tape backups require backup tape drives, a backup scheme and lots of tapes. You'll either need to have lots of tapes on hand or rotate tapes that are writing over.

Step 7:
Train your employees to use the new software or consider the additional costs of hiring computer savvy staff.

13. ACCOUNTING INFORMATION SYSTEMS:

Accounting information systems are useful for companies and businesses wanting to make the accounting process easier by utilizing a computer program or other system that will perform payroll and other functions.

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These systems, commonly including accounting software, make it easier to compile financial data for use in taxes, payroll, and other bookkeeping requirements. Recording is the first step in these systems that are used by companies including pertinent data such as expenses and profits that are very important to keep on file. After the recording phase, the information will be processed for use. When processed, it is filed in the areas where it is most important. These systems have various groupings or categories to maintain files until they need to be used in the future for whatever reasons. The final step that is part of most software programs is the communication phase. This is the process of actually utilizing the records that have been recorded and processed. Common communications of this data will be used for payroll and tax purposes. "The thoughts of the diligent tend only to plenteousness; but of every one that is hasty only to want."

The use of information systems is very important in recording vital financial data that will be used in the future. Major corporations, especially in the retail industry, will keep such data as sales, profits, expenses, and many other items for future use in financial reports. Recording will be done often on a daily basis, if not on a minute-by-minute basis with more complex and detailed accounting software. This is very important also because it will not only be used for daily practices, but will be necessary for tax purposes for the remainder of the year. Also, much of this data has to be kept on file for a number of years, in the event of an audit or other financial issues that may arise. Legal issues can cause severe problems and even end in the destruction of a company. By using computerized accounting information systems to organize and retain this data, companies have a much better chance to survive and succeed.

After the process of recording information with software, the next step that is taken is processing. With most accounting software or programs, there are different files and categories where records can be stored. This filing or storage can be done manually by the individual or group of people who works with the accounting information systems. Programs can also be set to do this automatically as information is entered into the system. Certain criteria can be set up in the program to allow the program to place files and data in the places or areas where it is supposed to go. There will usually be different categories for different data and some of the categories may include accounts payable, accounts receivable, payroll, purchasing, and other information that needs to be recorded and retained . The final step is the process of communicating the data in the area in which it should be communicated. First, and most importantly, tax records that are recorded and processed can be communicated at the time that filing taxes is done. Some major corporations that are broken down into quarters may utilize this data on a quarterly basis. Other companies,

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especially smaller businesses, may only be concerned with this information on an annual basis. For large corporations, like major retailers, there are often several smaller stores or branches of the company that must share information through accounting software or systems. This information can help the company forecast sales, profits, loss, and a variety of other things. Many corporations share this information on a daily, weekly, or quarterly basis. The process of communication is probably the most important stage of accounting information systems because this is the point where results are known and records will be put to use. The use of these systems is a very big part of businesses and corporations. Using resources available through accounting information systems allows major corporations and small businesses to record transactions and other financial information for use in the future. These tools can make the process much smoother, save money for the business, and save a great deal of time. With accounting software, computerized documents will make it easy to file and send documents to the IRS or other interested individuals. Money will be saved by not having to utilize the services of an accountant or CPA. This will also save time because expenses, payroll, and other financial matters can be completed by the owner at the business, with no need to take paperwork or other materials to an accountant for tax and payroll purposes. Taking advantage of this type of system can provide many great benefits to a large or small business. Accounting is a very important part of running and maintaining a business and the success of a company will often heavily rely on the practices and procedures that are used in the bookkeeping efforts of the company.

13.1. HISTORY OF COMPUTERIZED ACCOUNTING:

The classic AIS included paper ledgers that contained all financial transaction of a company. With the growth of technology over the past several decades, accounting software has replaced the old paper system.

13.2. DEFINITION OF ACCOUNTING INFORMATION SYSTEMS:

Accounting Information Systems (AIS) are systems that are used to record the financial transactions of a business or organization. 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

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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. Accounting Information Systems (AIS) are a subset of a company's total Management Information Systems. Companies use the MIS to aid their business decisions and ensure profitable business operations.

13.3. FEATURES OF ACCOUNTING INFORMATION SYSTEMS:

AIS software has two main features: financial transaction recording and financial information reporting. After accountants input financial transactions into the AIS, reports can be generated to review this information.

13.4. CONSIDERATION OF ACCOUNTING INFORMATION SYSTEMS:

Company management must decide how large the AIS will be and what type of information must be collected. Information may be recorded electronically, bypassing human input and allowing managers quicker access to select information

13.5. COMPONENTS OF ACCOUNTING INFORMATION SYSTEMS:

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.

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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.

13.6. ADVANTAGES OF ACCOUNTING INFORMATION SYSTEMS:

Many AIS programs are web or server based, allowing managers to gather and review financial information from multiple locations at one time. Centralized reporting can shorten turnaround time for implementing changes in business operations. Accounting information systems is designing a data processing system using software. It can also be done manually. The computerized systems make accounting job easier by the use of software which can compile financial, tax and payroll data. It can perform other bookkeeping functions. The system collects and processes transaction data. Then it disseminates financial information which management and company stakeholders use to make decisions.

Efficiency
Computerized financial information systems are faster and more efficient in processing data. The use of hardware such as scanners automatically generates accounting information without much ado. The information is available almost immediately. The cost of hardware such as computers is low and the availability of cheaper and user-friendly accounting software makes accounting information systems affordable. Computerized financial systems enable users to access it promptly by the click of a mouse. Unlike manual, which by the way is still very much in existence as some companies want to keep both electronic and manual accounting information systems, the user does not have to go through a pile of paper work in order to locate the information he needs.

Cost Effectiveness
Accounting information system makes the maintenance of a bloated financial department irrelevant. The software does most of the work that would otherwise require several employees. The accounting software can journal and prepare documents such as the trial balance. Journals and

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ledgers are recorded in the computer data bases. There is also software that can perform functions such as billing budgeting and preparing payroll. Accounting information systems help cuts the payroll for accounting staff substantially.

13.7. WARNINGS OF ACCOUNTING INFORMATION SYSTEMS:

Failing to review the information collected and reported may hamper the effectiveness of the AIS. Ineffective AIS programs create a "garbage in, garbage out" environment, causing delays for management decisions. The benefits of accounting information systems are obviously immense. But there is also a downside such as losing information if the system is attacked by computer viruses. Of courses anti-virus software has improved, but no computer or computer system is 100 percent immune from virus attacks. The other problem is power failure. When that occurs information could be lost if not properly saved. The computerized information systems are also prone to fraud if there are no proper internal and external controls.

14.

ACCOUNTING 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 revolutionized the industry of accounting, tax compliance and attestation. Accounting software has increased the effectiveness and efficiency of accounting firms and businesses over the past several decades. Computerized software has also streamlined accounting workflow, allowing companies to focus on producing goods and services.

Facts
Accounting software is a computer program that allows accountants to record and process financial transactions electronically. Several types of accounting programs exist, depending on the type of company and size of business operations.

Features
Modules are utilized in accounting software to separate each accounting function. These modules are broken down by accounting

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function, such as accounts payable, accounts receivable, fixed assets and general ledger.

Benefits
Most accounting programs integrate spreadsheet and word applications into the accounting system. This allows accountants the ability to export financial transactions into a manageable format for preparing and reviewing information.

Misconceptions
Companies usually associate high installation and maintenance costs with accounting software. However, many of the programs available today can be customized to fit small and large businesses without sacrificing functionality.

Warnings
Although accounting software can improve the accuracy and validity of financial transactions, it is still subject to the "garbage in, garbage out" theory. Accountants must review and verify financial transactions to ensure that all information reported represents a true picture of the company's financial health.

14.1. BENEFITS OF USABILITY OF ACCOUNTING SOFTWARE:

The benefits of usability include:

Increased productivity Decreased training and support costs Increased sales and revenues Reduced development time and costs Reduced maintenance costs Increased customer satisfaction

Increased Productivity
The average software program has 40 design flaws that impair employees' ability to use it. The resulting cost of lost productivity can be up to 720%. (Landauer, 1995, The Trouble With Computers, MIT Press.) Productivity within the service sector would raise 4% - 9% annually if every software program were designed for usability. (Landauer, 1995, The Trouble With Computers, MIT Press.)

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Office workers "futz" with their machines an average of 5.1 hours each week, costing American businesses $100 billion annually in lost productivity. Almost one-fifth of the workers' time is spent waiting for programs to run or for help to arrive, with double-checking printouts for accuracy and format following as a close second. (SBT Accounting System, 1997) Over the past 30 years, productivity growth in the seven richest nations has fallen from an average of 4.5% per year in the 1960s to a rate of 1.5% in recent years. The slowdown has hit the biggest IT spenders -- servicesector industries, especially in the U.S. (Gibbs, "Command and Control." Scientific American, July 1997)

Decreased Training Time

The number of computer users in the workplace has increased from 600,000 in 1976 to 80 million today. (Tanaka, "Workplace Injuries Spark Cottage Industry." San Francisco Examiner, 3/29/98) A study of MIS managers found that the training time for new users of a standard personal computer was 21 hours, whereas it was only 11 hours for users of a more usable computer. (Diagnostic Research, 1990, "Macintosh, MS-DOS, Or Windows: A Synopsis Of What MIS Managers And Business Computers Had To Say.)

Increased Sales and Revenues

50% of all technology projects fail to meet chief executives' expectations. (CSX Index and American Management Association, 1998) Combining hardware, software, networks and the people needed for computer support and training, the total spending on IT in 1996 was approximately $500 billion in the U.S. and more than $1 trillion worldwide. (Paul A. Strassman, Method Software, Scientific American, 7/97) Government statistics indicate one-third of the overall real growth in the U.S. was attributed to IT, and IT will continue to be the "engine of continued economic growth" for decades to come. (Ira Magaziner, Senior Advisor to the President, "White House Policy Advisor Ira Magaziner Tells ACM Policy98 Conference That Internet Should Be Market-Driven, Not Regulated." CMP Tech Web, Business Wire 5/12/98)

Reduced development time and costs

According to a 1995 study by The Standish Group:

9% - 16% of software development projects are completed on time and on budget. Large companies have a 9% success rate. Mediumsized companies succeed with 16% of projects. Small companies had the greatest success rate at 28%. Overall, 31% of software development projects are canceled before completion. Another 52% of projects eventually do get completed, but end up costing 189% of their original budget. In terms of time, they take between twice and three times as long as originally anticipated.

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When software projects are completed, they only have 42% of the features originally intended. More than 30% of software development projects are canceled before completion, primarily because of inadequate user design input. The result is an annual loss of $80 billion to the economy.

The implementation of usability engineering techniques has demonstrated a reduction in the product development cycle by 33% - 50%. (Bosert, 1991, Quality Functional Deployment: A Practitioner's Approach. NY: ASQC Quality Press)

Reduced maintenance costs

Every $1 invested in user-centered design returns between $2 and $100. (Pressman, 1992. Software Engineering: A Practitioner's Approach. McGraw-Hill, NY. ) 80% of software lifecycle costs occur during the maintenance phase. (Pressman, 1992 Software Engineering: A Practitioner's Approach. McGraw-Hill, NY.)

Increased customer satisfaction

63% of software projects exceeded their estimates, with the top four reasons all related to product usability: Frequent requests for changes by users overlooked tasks users' lack of understanding of their own requirements insufficient user-analyst communication and understanding (Lederer and Prassad, 1992) 84% of Internet users say that the Web is indispensable. 85% use the Internet every day. (Kehoe, GVU, 1997 Graphic, Visualization & Usability Center's (GVU) Eighth WWW User Survey Report, (December). ) If the response time between the viewer's click and the appearance of a new page is less than one-tenth of a second, the viewer perceives it as instantaneous. Once the wait goes from six to 10 seconds, the viewer gets distracted and begins to consider other surfing options. (Matt Cohen, New Century Network, New Media Week, 3/30/98)

14.2. NAME OF SOME ACCOUNTING SOFTWARE:

Today's accounting software provides powerful tools for personal or business finances.

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Account software makes it easy to manage your personal or business finances. Some of the software described here includes tools to keep you from missing a bill or overdrawing an account, while helping you saving for the future. Accounting software does everything you need to run a small business, from invoicing to payroll to taxes.

Quicken
Quicken products help manage personal finance, home businesses, or rental property. Quicken Deluxe simplifies personal finances with a home page allowing you to see all of your credit card, banking, and loan information in one place. The program also sets up bill reminders and pairs with Turbo Tax for easier tax filing. Quicken Home and Business combines personal finances and business finances in one program. Quicken Rental Property helps landlords manage rent, property maintenance fees, and taxes.

Sage Peachtree
Sage Peachtree Pro Accounting, its signature product, includes all the standard accounting programs needed to run a business such as creating invoices and tracking payments. The software program works with Microsoft excel, so you can import accounting reports into a spreadsheet. The software is also highly adaptable, allowing you to make a custom home screen, showing just the information you want.

Account Edge
Account Edge, developed specifically for a Mac, has all the tools you need for running a small business. With it, you can track a business bank account, create a payroll, and monitor inventory. The software comes with Enstore, a hosted online web store. Tax tools are also included, so you can prepare your business taxes directly from the software.

QuickBooks
QuickBooks offers four different accounting software programs, including a version for Mac and an online version. The program's homepage highlights all business and banking information for the user. It can compile information on customers, vendors, and employees, linking similar transactions to create a complete profile for the person or company.

APPLICATION OF INFORMATION TECHNOLOGY IN ACCOUNTING IN BANGLADESH

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Now days world is changing rapidly. The scope of application of information technology is also increased with the improvement of technology. What is done by manually in past is now replaced by computer. Without technology we cannot think a day. Information technology is used every site of our life. Accounting is not far from it. Though Accounting is the process of recording, classifying, summarizing, and preparing & analyzing financial statement. So its main task is to record business transactions. In the near past these was done by manually. To record and keep these transactions are more difficult for an organization. Now it is easier to record and keep business transactions through information technology. To accomplish these some web design companies design accounting software. In Bangladesh, there are some companies which develop accounting software. Some of these companies are mentioned below with their services:

List of computer software companies in Bangladesh

Software Company Services Address

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REFERENCES:
1. http:\\www.ehow.com 2. http:\\www.google.com 3. Accounting Information Systems By Edward Lee Summers 4. http://www.christianet.com/accounting 5. http://www.ehow.com/about_5105812_definitio n-accounting-information-systems. html#ixzz0tub3tnJg

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