QUESTION ONE [50]
Read the following article and answer the questions that follow:
The Strategic Role of the Accounting Information System: A Two-Way Relationship

Even if accounting information systems are by now mature tools, they are not only essential instruments for managing the company, but also important enablers of business innovation. Indeed, they have always been evolving during time and there is still a long way to go, for the best alignment between accounting information systems and the business organisation. The evolution of accounting information systems is like a broken line, showing various trend breaches resulting from disruptive changes in a wide variety of societal and environmental factors. However, there are three factors that may be considered the main reasons of accounting information system changes, i.e.:
• Technology;
• Management practices and models;
• Accounting rules.
The relation between accounting information systems and these factors has been the object of many studies in recent years. It is considered a complex relationship where accounting information systems sometimes are the dependent variable and sometimes the independent variable.
A large part of the studies consider technology as the main variable that has an impact on management practices and models, accounting rules and on the other components of the accounting information system. For example, the Internet deeply influenced accounting information systems, and indeed web technology has had an impact both on how an accounting information system is built, and on how it is used. Nowadays it is difficult to imagine how databases and the access to them are organised without having access to the Internet. And this is not just because of standardized business reporting as enabled by XBRL but also because of the emergence of cloud computing. Also, the migration from a hierarchical organisational model towards a process-oriented model has been driven by Enterprise Resource Planning systems, because of the new technology and the new way of designing accounting software.
In the last decades the word ‘strategic’ has become associated with the accounting information system as being synonymous to organizational innovation, efficiency, reliability of information, and relevance of information for internal and external stakeholders. For many years it seemed that information and communication technology was the main driver of the strategic role of the accounting information system and its evolution.
‘Strategic’ means searching new ways to combine information and read economic and competitive events, using technology as a fundamental tool to trigger innovation, and as an important support for internal decision-making processes.
Data quality is one of the key issues in managing complex and global companies in a fast changing, heterogenous world with often—what is by now almost commonplace—big data. To be able to collect in real time, select, process and distribute data really necessitates a profound knowledge of the company as well as external consensus rooted in transparency. In this sense ‘strategic’ means the ability of the accounting information system, as an integrated system, to satisfy external information needs for decision making and to ensure the required levels of transparency, accountability and disclosure.
Even if the applicable accounting rules and management practices are important sources of innovation in accounting information systems, the main change driver is the globally competitive arena. However, the scope of any accounting information system and its pervasive nature with respect to the business processes influences the diversity and heterogeneity of AIS research.
However, some topics are more critical than others and—surprisingly—they are not so different compared to ten years ago.
Adapted from D.Mancini, Accounting Information Systems, (2013).

Discuss the factors that have contributed to the evolution of accounting information systems as stated in the article. (15)
With the use of relevant examples from the article explain the importance of data quality in accounting information systems. (5)
With the use of relevant examples from the article explain the impact of accounting rules and management practices on accounting information systems. (5)
In relation to the article, identify and explain each of the user of accounting information. (15)
Explain how an accounting information system is maintained. (10)

QUESTION TWO [25]
Categorise each of the five functions performed by information systems. (10)

Discuss each of the different information attributes that must be taken into consideration when designing an information system. (15)

QUESTION THREE [25]
Explain the advantages of the database environment. (10)
State and explain the events that occur in a typical sales transaction. (15)

Answers to Above Questions on Accounting Information Systems

Answer 1: An analysis of the given article indicates that there are many factors that have contributed towards the evolution of accounting information systems. The most important factor is the technology because it is considered as the primary driver of change in using AIS. In addition to the contribution of Technology, the change in the attitude and approach of Management also plays a significant role in utilising AIS in managing accounting processes.

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