Value of Information Technology and Management Information System to Accounting - Research Paper Example

? Value of Information Technology (IT) and Management Information System (MIS) To Accounting 5th, May Information Technology (IT) refers to the utilization of computers and networking in the process of data storage, protection, and overall management. IT also employs different computer programs, including the software programming. On the other hand, closely related to IT is the Management Information Systems (MIS). These mainly include different methods, which base on technology, in people management and decision making in companies. Nonetheless, management information systems are tools, which a manager uses to collect information about different aspects of the company, including sales and personnel, among others, and analyze it (Moghaddam, et al 2012). On the other hand, Accounting is an important aspect in all companies. Unlike IT and MIS, Accounting has been in existence for the longest time. This mainly addresses the financial state of a company. It involves bookkeeping, which involves bank statements, company ledgers, and the overall tracking of finances in the company, including money in, money out, and business assets. Today, there is a high level of interaction between different disciplines. Similarly, the fields of accounting, IT, and MIS show a high level of interaction, as the field of accounting adopts the skills and knowledge of IT and MIS in its processes. Nonetheless, the nature of IT and MIS make them to be applicable in diverse disciplines (Moghaddam, et al 2012). This paper therefore, will focus on the value of information technology and management information systems in the field of accounting. The field of accounting today has become dependent on information technology and management information systems, as it adopts various elements in these, to enhance the efficiency of its processes. In information technology, there are a myriad of new integration approaches, as well as effective methods of managing data. Therefore, use of information technology translates into increased efficiency in data retrieval and storage, and overall management of data in accounting. Therefore, this aspect of information technology is valuable in accounting, since it makes the different procedures and processes in accounting to be simple, and leads to an increased and focused use of computed information in the field. Therefore, with regard to efficiency in accounting, information technology has played the major role in achieving this. Nonetheless, with the advancements in information technology, it is expected that the field of accounting will as well adopt the new techniques in information technology, and therefore, increase its efficiency (Moghaddam et al 2012). Information technology has also led to the transformation of the field of accounting into a paperless phenomenon. Today, there is no more use of papers and pencil. Information technology highly adopts different equipment, which have also been adopted in accounting. For instance, there is the use of computers, faxes, and scanners, among other IT equipment in information technology. Most of these IT equipment are affordable, thus available in the accounting section of most companies. Nonetheless, these have resulted in increased efficiency in accounting procedures (Bahador, Haider & Saman, 2012). As observed, information technology utilizes various software. These software can also be adopted in most accounting processes. For instance, accountants use the program referred to as “spreadsheet” today to help in reporting and calculations in the field. Apart from the spreadsheet program, there are many more software, which are accustomed to accounting, and help in accounting procedures. Nonetheless, these are affordable and easy to use. These different software makes the work of accountants easier. Therefore, accountants use these to pay different types of bills in the company, recording all the transactions they have made, and use them in financial reporting, as well. Additionally, the use of these IT programs ensures that all accounting data is well organized and stored in a central area for easy access, namely a database (Bahador, Haider & Saman, 2012). Security of data is paramount in accounting. Accounting deals with highly sensitive company data and information, which must be well kept and protected from unauthorized access. In the past era, when technology had not evolved as it has today, accountants used papers to record information, which were then stored in large files. This way, security of the data could be easily compromised, since it is easier for a person to access files and folders and read the data therein. However, the adoption of information technology has changed all this. Today, with the adoption of IT in accounting, the security of company accounting information is guaranteed. Information technology protects the confidentiality of accounting data through use of passwords and identification for access. Therefore, the binders and papers have been replaced with encrypted accounting data. Additionally, stealing of papers is easy, and retrieving them is challenging. However, with information technology, it is possible to track a computer that is stolen, and retrieve it. This is through use of different security software, whose activation can be performed remotely (Banks & Media, n.d). Use of the internet, which is a component of information technology, in accounting has led to great impact in accounting. Internet is employed in accounting to aid in sharing of documents across the globe and performing research in the field. Nonetheless, with the increasing value of information technology in the field of accounting today, the present accountants need to be technology savvy in order to perform well in their accounting roles. Most institutions of higher learning today offer degrees in accounting and information technology, since it is quite clear that information technology plays a major role in accounting today (Banks & Media, n.d). Similarly, management information system plays a valuable role in accounting today. This involves the use of software systems, as well as a combination of different processes and resources in business, which form a system. This is important in accounting management, as accounting managers can make right decisions in their practice. The system is streamlined with company goals and objectives. Different companies have varying systems, which they use in various processes in their departments. In accounting, there are financial systems and inventory systems, among others. When management information system is used, it is possible to combine the data from all other systems. For instance, in accounting, an accounting manager will have an easy task meeting the needs of clients, when information about sales revenue is combined with inventory, among others (O’Connor & Martinson, 2006). Management information systems in accounting help in decision-making, and these decisions influence company goals and strategies. Using management information systems, a sales manager can be in a position to determine the probability of achieving their sales targets. For example, a sales manager might compare the financial system with the sales system, with regard to the sales projections in each system. It is also possible for managers to adjust their financial systems and assess past financial moves, in order to reach a sensible target for the company (Gelinas, Dull & Wheeler, 2011). Furthermore, management information systems are advantageous to accounting since these are developed depending on the nature and need of a company. Therefore, companies of different nature will exhibit varying management information systems. For instance, accounting might employ the Enterprise Resource System (ERP), which entails a combination of sales data. On the other hand, the Data Warehouse, also referred to as the Decision Support System, includes a combination of information from different systems in the company. This system therefore, shows details of the whole company. Accounting managers might therefore, find these systems, including others, which relate to accounting, important in their decision-making (Hall, 2008). Nonetheless, management information system in accounting mainly helps in the process of management. However, the cost of implementing this is quite high. Therefore, managers must ensure that its implementation increases the productivity and performance of the company. Therefore, unlike information technology, whose value is quite obvious, and includes minimal risks, management information systems are quite costly, therefore, if these fail to realize the company’s goals and objectives, this results in a loss for the company (Gelinas, Dull & Wheeler, 2011). Nonetheless, information technology and management information systems are two major aspects, which have transformed the world of accounting today. These have resulted in an increased level of organization in accounting, accuracy, reduced costs, as well as increased effectiveness and efficiency in the accounting practice. This is important, as it keeps a company in the competition in the market. The technology in the world today continues to advance each day. Therefore, it is expected that information technology and management information systems will become more sophisticated and effective in future, compared to their state today. Therefore, since these are already adopted in accounting and exhibit great usefulness and value, it is no doubt that in future, the effectiveness and efficiency of accounting practices and management will rise a notch higher. References Bahador, K., Haider, A. & Saman, W. (2012). Information Technology and Accountants. European, Mediterranean & Middle Eastern Conference on Information Systems. Munich, Germany. Retrieved from http://www.iseing.org/emcis/emcis2012/EMCISWebsite/proceedings/120.pdf Banks, L. & Media, D. (n.d). Importance of the Management Information System. Chron, Small Business. Retrieved from http://smallbusiness.chron.com/importance-management-information-system-5256.html Gelinas, U., Dull, R. & Wheeler, P. (2011). Accounting Information Systems. London: Cengage Learning. Hall, J. (2008). Accounting information systems. London: Cengage Learning, Moghaddam, et al (2012). The Impact of Information Technology on Accounting Scope in Iran. Middle-East Journal of Scientific Research 12 (10): 1344-1348. O’Connor, N. & Martinson, M. (2006). Management of information systems: Insights from accounting research. Retrieved from http://nealeoconnor.com/brainlid/Home%20page/I&M%203892%20article%20in%20press.pdf Read More