ACCOUNTING INFORMATION SYSTEM:
Abbreviated as AIS, this is an artificial information system that completely dedicates itself towards the data storage and manipulation of a firm. If we look at the scenario a decade back, the accounting system used to be manual. But with increase and data and productivity all these data are to be stored in safekeeping and computer based software have been developed in order to do so. With the help of Accounting information system one can achieve the details over the functions of accounting information system and develop better understanding about the subject where no error and mistake would be found.
How an AIS Can Add Value to an Organization:
1. Improving the quality and reducing the costs of products and services-Reduces the amount of wasted materials and the costs of having to rework anything
2. Improving efficiency - Providing more timely information
3. Sharing knowledge - Improving operations and even providing a competitive edge
4. Improving the efficiency and effectiveness of its supply chain - Can reduce the cost of sales and marketing activities
5. Improving the internal control structure -Can protect systems from problems such as fraud, errors, equipment and software failures, and natural and political disasters
6. Improving decision making -
• Identifies situations requiring management action
• Provides a basis for choosing among alternative actions by reducing uncertainty
• Information about the results of previous decisions provides valuable feedback that can be used to improve future decisions
• Information about the results of previous decisions provides valuable feedback that can be used to improve future decisions
Saudi case study:
SABIC’s (the Saudi Basic Industrial Corporation) ranked among the world’s largest petrochemicals manufacturers. SABIC is a public company based in Riyadh, Saudi Arabia with major industrial operations in the industrial city of Al-Jubail . The Saudi Arabian government owns about 70% of the company’s shares with the remaining 30% held by private investors in Saudi Arabia and other countries of the Gulf Cooperation Council. A Royal Decree established the SABIC in 1976 and its growth has been a miracle. Today, the company is operating in over 40 countries with a global work force of over 40,000 talented individuals. The SABIC foresee great opportunities for growth by working with universities, international research centers and other partners from the public and private sectors to develop research capacities in order to remain at the forefront of technology such as ERP system issues in business.
The SABIC business is grouped into five core sectors . The concept of partnership was at the core of SABIC growth and business strategies. In addition, SABIC entered into joint venture with industrial leaders from around the world, offering a share in the Saudi resources for their technology, support in human resource, development and global marketing. This study was performed using some of SABIC affiliates in the petrochemical sector based in Al-Jubail Industrial city, Eastern Province, Saudi Arabia. Neither the name of SABIC affiliates nor the identities of the interviewee have been eliminated due to affiliate's requests. The ERP system played an important role to integrate SABIC affiliate inside Saudi Arabia and around the world.
SABIC, through its affiliates, was the first company in the Middle East to introduce ERP systems aiming to improve efficiency and effectiveness and strengthen its competitive edge by operating as a single, cohesive and coordinated unit in the global market place. Since the late nineties, SABIC affiliates have been implementing so many updates to their ERP systems to guarantee continuous leadership and growth in their businesses. Top management involvement, accountants’ motivations and believing in the system were among many reasons the affiliates were determined to implement and go with the new ERP-AIS successfully forever.
CONCLUSION:
By the above case study , it can be concluded that with the help of accounting information system organizations can lead to success and can expand their business to a greater extent.AIS adds up value to organizations just like in the above case of SABIC of saudi arabia. ERP systems brought massive and comprehensive changes to organizations in almost all levels and functions. AIS function is no difference and will not be away or a part from such expected changes.
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