Advantages of applying Accounting Information System in the banking sector - Term Paper Example

Business processes involve the coordination of closely related prearranged activities conducted either by the respective staff members or a computer. The main reason for the orderly arrangement of business activities is to ensure the accomplishment of the primary goals (Romney & Steinbart, 2012). Decision-making should be based on the available relevant information. Therefore, Banks should strive to improve their information gathering and processing tactics in order to produce relevant information.

Accounting information system involves the gathering, storing and dispensing of both financial and accounting information, which is then rulied on for decision-making purposes (Romney & Steinbart, 2012). It is important to note that the accounting information system is applied on both the financial and non-financial data of an organization. Notably, the implementation of the accounting information system has the same advantages for banks as it has for other organizations in other sectors. On that note, the three advantages of applying the accounting information system in the banking sector could be helpful in making decisions, increasing efficiency and effectiveness and developing internal controls as will be discussed in this term paper (Romney & Steinbart, 2012).

The accounting information system eases the preparation and the analysis of the financial statements. Company law requires the preparation and publication of the annual financial statements by banks and other companies. The preparation and publication of the financial statements are in the interest of various users of such information. The financial statements contain four categories of a company’s financial information such as the balance sheet, the income statement, the statement of changes in equity position and the cash flow statements.

Each category of the information provides a different financial perspective of the banks (Hall, 2013). Financial statement analysis - the use of