Accounting Information System. Data Base - Term Paper Example

Accounting Information System; Data Base Introduction Accounting information systems is the collection, storage and processing of financial and accounting data that is material in decision making. It is a compute based system for tracking accounting activity in conjunction with information technology resources. It results to statistical reports that are used by various stakeholders such as management, investors, creditors and tax authorities. A database is a set of computer files that minimizes data redundancy and accessed by more than one application programs. Data base approach applies when information grouped in data files aims to serve more than one type of user (Garcia, 2014). Characteristics of Data Base Approach Separation of data available in various application programs is one of data base characteristics generally referred to us data independence. Data standardization ensures data elements in a data base have key distinctive definitions thus making them compatible with every application program stored in the data. Another material data base characteristic is one time data entry and storage. Through this, data values are entered only once in a database, this aids in reduction of redundancy and inconsistencies among data elements and reduction of inherent complications in statistics observed from inaccurate data (Garcia, 2014). Data integration employs data sets to integrate the data, ensuring all affected data in a data base is affected simultaneously. Shared data ownership is a key characteristic in data base, meaning that all data within a database are owned by common users, with a portion of database being of interest to each user, commonly known as sub-schema. To present a logical view to users and applications programs, data base presents a centralized data management which stand guard to ensure smooth operation and effectiveness of data base information (Garcia, 2014). Designing and implementing a data base System Initial stage in designing a data base system is planning. Planning embraces determining the need for developing the new system. For instance, the need may be to eliminate the problem of creating multiple master files, make it easy for data integration and organization and consistency of output. Requirements analysis of end user is the next stage (Garcia, 2014). End user requirements are diverse, because these users need dismillar information which is material to them in decision making. Therefore, this stage is critical, and must be well developed because it is the main reason of setting up a data base system. Failure of a data base system is better understood by its failure to deliver accurate and quality results to users. Relationship that occur among data and information requirements must be clearly spelt out. User acceptance test must be shown at this stage. Design stage is the third stage in developing a data base. It involves technical specifications such as data flows, reports layouts, and screen layouts among others. In accounting information system, it should be taken into consideration here that accountants will employ database technology to store, process and report accounting transactions. Financial transactions are done directly into a data base, with the personnel directly entering commands, waiting for the system to process and run a statistical query to produce a report. The fourth stage is known as coding stage. It involves translating the design stage into actual data structures that will be implemented in the system. A considerable amount of time is allocated to this stage, where various levels of testing must be executed. Testing involves provision of a quality scenario, similar to real business transactions, where end users check the capabalities and limitations of the data base system (Garcia, 2014). Implementation if the fifth stage in data base system designing. Data is transferred from the existing system into the new system. The last stage is operation and maintenance of the new system. Cross functional relationships are evaluated at this stage, and advantages of a good data maintained. Advantages and Disadvantages of a data base system. Master files are combined into larger pools of data, and accessible by multiple programs. Data sharing with ease is made possible, because structures are flexible and commands are easy, that is menus are used to execute commands. Reporting flexibility is made possible, where reports are easily revised and generated as needed. Technicians can browse the data base easily to research problems and establish detailed information. Minimal data redundancy and inconsistencies is achieved, because data is stored only once in a central location. Data independence in data base systems provides that data is independent from the applications that run it. Consequently data items can be changed without altering the applications that run it. This makes programming easier and simplifies data management (Garcia, 2014). Cross functional analysis of relationships is explicitly defined. For instance, Selling and distribution cost in relation to Bill of material cost. There is improved data security, because the more users have access to the data, the greater the risk of data security breaches. However, data base system provides for a framework for better security policies to enforce data privacy. Management is able to make improved decisions by using quality information generated. The quality of the generated information depends on the underlying data (Garcia, 2014). Taking into account the data is entered only once, and there is room for change of data without altering the systems in place, quality of data available to management for decision making is validated. Disadvantages Management complexity is the major data base system disadvantage in accounting information systems. This arises from the various technologies intertwined in adoption of a data bases system. Different technologies employed impacts on company’s resources and culture. Though the data base system provides a framework to address data security issues, the issues of data security must be continuously accessed by management due to risks associated with central data storage of company’s crucial data adding to complexities in management (Garcia, 2014). Replacement cycles are necessary in data base systems, due to the rapid advancement in technologies. New features emerge every day, requiring upgrade of software and upgrades versions. Not only does it cost money to acquire these hardware’s and software, but it also costs money to train the users and administrators on proper use for efficiency. Consequently, these upgrade cycle’s results to incremental costs regularly, some of which may be not within the budget. Further to training, hardware and software costs, licensing and regulation compliance are additional costs associated with replacement cycles. It is observed that all these costs are normally overlooked when data base systems are implemented (Garcia, 2014). Conclusion Determining of data base value is a sophisticated process, owing to the universally acceptability of database systems. Data base brings an ease to users, speeding up business processes and delivering relatively quality data. This has been the main value derived from data base system, in determining its value in the business context. Although data base system yield considerable disadvantages, some of which are overlooked during the implementation stage, it advantages carry significant weight over the disadvantages which are combined with other business tools in the contemporary business environment to transform end-user productivity in the global economy. Data base systems have also made a significant impact in transforming the global economy into a small village, guaranteeing framework of integrating complex operations requirements by multi-national business organizations (Garcia, 2014). The only way to ensure business existence as a going-concern in current world is through implementation of data base system. Work Cited Garcia-Molina, Hector, Jeffrey D. Ullman, and Jennifer Widom. Database Systems: The Complete Book. , 2014. Print. Read More