Accounting Information System (AIS)

An Accounting Information System (AIS) is the complete set-up a business uses to collect, store, process and report its financial data for the people who need it — owners, managers, investors, lenders, tax authorities and other stakeholders. A computerised accounting package (as described in §2) is the software heart of a modern AIS, but the AIS itself is broader than just the software: it includes the people who operate it, the procedures they follow, and the hardware the software runs on.

An AIS is generally understood to have five components working together:

1. People — the accountants, data-entry staff and managers who use the system, enter data into it, and read its reports.
2. Procedures and instructions — the rules a business follows for how data is collected and processed (for example, who is authorised to approve a payment voucher before it is entered).
3. Data — the actual financial facts about the business's transactions: sales, purchases, receipts, payments, and so on.
4. Software — the accounting package or programs that process the data according to accounting principles.
5. Information technology infrastructure — the computers, networks and storage devices on which the software runs. …