Friday, August 13, 2010

The Effect of Economy on Accounting Information

A national or global economy may be reflected in the development of accounting information systems (AIS), especially their use and impact. AIS were developed to record, validate, and summarize financial processes within an enterprise. The economy -- general trade in goods and services in a market -- has transformed, and continues to transform, the accounting systems of companies.

Effects

    The AIS of many companies continue to transfer accounting personnel responsibilities to computers as the shift of the economy pushes further into the global marketplace. It is no longer prudent for a company to place its resources in just managing its own financial transactions; it is now necessary to track and manage the flow of information within the company and without to stay ahead in the market.

Benefits

    Shared databases connect the various departments of accounting within a company, providing a cohesive perspective from which all finance personnel can operate. Shared databases also pick up any duplicate or inconsistent information and resolve them.

Significance

    Accounting is becoming an information service department as the collective data provided by the finance department and AIS help the company predict the future monetary needs of the company and make decisions accordingly. Technology continues to change the fundamental applications of company accounting departments toward informatics.

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