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Accounting information systems and their impact on internal control

While modern companies understand the importance of information and a single accounting statement in the success or failure of their objectives, the vast majority of companies have built their accounting systems on recording each statement or information they implement and making all financial and accounting statements that explain the company’s work by the system; A particular company chooses to suit its business… This is known as “accounting information systems.”

Accounting information systems have witnessed many developments over the past few years. They have been the most significant impact on the company’s operations, the first of which is internal control operations. Therefore, all companies seek… It seeks to search for the best information systems, especially the design of accounting information systems.

Since accounting information systems are one of the essential tasks of the accounting office, we have dedicated this article to them. We will also discuss their impact on the internal control system, whether it will increase its effectiveness, and does it affects internal control efficiency? But let us first learn about the meaning of the accounting information system.  

Accounting information systems

It is a framework in which all the company’s human and material resources are coordinated to collect, record, and store. It exploits all the data entered and processed and converted into useful information to achieve the desired goals and provide it to decision-makers at any time, including management bodies, investors, partners and entities, governments, and others.

Therefore, accounting information systems are considered one of the essential tools to achieve corporate goals. They also have an influential role in making appropriate and rational decisions, provided that such information is reliable. 

Attributes of reliable accounting information

it must meet the following conditions

Health and safety investigation, error-free and forecast

Taking into account the appropriate timing for them

.Possibility to use them

.Neutral and auditable

Approved by the responsible bodies within the company

The importance of quality accounting information

Accounting information systems are of great importance to many entities, such as 

For departments within the company

Accounting information systems are in constant contact with other information systems within the company and through several communication channels to exchange data

For management and investors

It gives a correct and integrated picture of the company's situation

Future planning

It helps to anticipate the company's future events to the maximum degree, thus contributing to the exploitation of all its resources by the company's management and directing them towards their optimal use

Internal control system

Accounting information systems provide many standards and tools that help develop the internal control system and its methods

The benefits of accounting information systems

As we said earlier... Accounting information systems are of great importance to several internal and external entities, as they achieve many benefits that meet their needs, including

It is useful in providing daily information about operations

It benefits decision-makers by providing them with all the accounting data and information to support decision-making

Officials can control financially and evaluate the company's activity and administrative activity within a specified period

Accounting information systems are helpful when you want to follow a new accounting system within the company, providing it with all the information it needs

The accounting information system increases the efficiency of the company's employees and the optimal use of its human resources

It contributes to the business organization within the company, determining responsibilities and reducing errors

It is also helpful in developing and innovating forms of products and services to suit users' desires

The accounting information system enables officials to analyze the company's financial position. It also helps them identify weaknesses and strengths

In the long term, accounting information systems help improve a company's reputation, raise its market value, and thus improve its profits

Systems link their primary or subsidiary objectives with tools that help achieve them in the fastest and best time

The impact of internal control on the quality of accounting information

In modern times, the internal control system has emerged, which is used as the most important means of monitoring, controlling, examining, and reviewing operations continuously to help management make various financial decisions. One of the main objectives of financial control and internal control is to maintain the capabilities and funds of companies of cheating and embezzlement

Internal control is an activity independent of the company under the authority of the company's senior management. Nevertheless, it plays a vital role whether for the company's directors, employees, investors, government agencies, or customers with the company

Over the past few years, several studies have been carried out that have proven the strong relationship between internal control and accounting information systems, which is considered a mutual relationship where they affect each other

We can summarize the most important findings of these studies in the following points

Accounting information systems enable the internal auditor to promptly prepare accounting and financial reports, which increases the effectiveness and efficiency of the internal control process

Accounting information systems establish a framework for the form of laws and principles that must be adhered to during the internal control system

Accounting information provided to the internal controller helps him quickly detect errors and manipulations and analyze the causes and methods of processing

Accounting information systems are the most effective tools for the internal controller to carry out his task efficiently

Companies subject to the accounting information system help the internal control process follow up and audit all the company's different operations

It also allows the internal controller to shorten the efforts, time, and company money he consumes in the internal control process

The accounting information system is a crucial partner for the internal controller, which helps him develop his performance and raise the efficiency of his work

The report submitted by the internal controller under the accounting information system is considered more efficient and reliable than reports prepared by traditional methods

The internal controller can modify the accounting information system to suit the requirements of his mission

Internal control methods in electronic accounting information systems

Internal control in electronic accounting information systems is more critical, as it records and processes thousands of transactions on the computer, which means that registration errors are more significant. In addition, it is not available to everyone. It, therefore, cannot be verified as quickly as in the manual system, so it is challenging to process This internal control has led to a greater risk of embezzlement and theft

Modern companies have been satisfied with this. They have dedicated a department or entire department to process data electronically and follow a range of internal control methods

import

Internal output control methods

Ensure the accuracy and integrity of the processed data outputs

Confirm the authorization to trade outputs to authorized entities only

big-data

Internal control methods of processing

Ensure the applications used and the safety of their operation

Ensure that all processes are processed and that no process is ignored

information

Internal input control methods

Ensure that the data to be recorded is approved

Ensure that all data on the computer is converted without loss or deletion

Correct previously rejected data

Accounting information systems design

If you are a business owner or startup, you just need to design your accounting information systems that will suit the needs of your company and the nature of its business. Do not carry them. Therefore, ECPA office will save you any hardship

Our office is not just an accounting office but one of the largest accounting companies in Egypt and the Middle East. A team consists of the best chartered accountants, consultants, and certified accounting, legal, auditing, and taxation specialists

Our team will help you design accounting information systems. In addition, we provide many services such as

Define the objectives of the company and the nature of its work and design the appropriate accounting information system for it

Studying its legal requirements and the compatibility of its accounting system with its organizational structure.

Speed and accuracy in providing information

Integration and comprehensiveness of all data provided

Design the records and documents required to operate the information system

Follow up on the recorded data, ensure its safety and review it more than once

Identify the types of reports and their content and identify the entities they will be allowed to access

Linking internal control processes and the system

Establish controls for control, correction, error detection, and compliance with international standards

Designing systems for collecting, recording, and processing data

Design systems to structure, update, store and retrieve files.

Creating drivers and internal control systems

Issue sales and purchase orders, checks, shipping, and immediate deportation simultaneously

We provide all internal and external audit services and tax services

Saving time and effort at reasonable costs for the services provided and not exaggerated

ECPA team is the largest accounting office in Egypt, we promise to improve your company’s performance, raise its efficiency, and bring you the profitability you want as soon as possible

As partners in your success, we give you your first consultation free of charge… contact us now

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