Information Systems
in Accounting
Jennie Scarbrough
ACCT 301
Professor Justin Miller
October 11, 2019
Information systems in accounting has several definitions and meanings. We will review and
explore more of these in the following pages. Information systems play such a huge role as they are the
“core” of accounting. Information systems may be presented in different ways, different forms, however
it is still they all hold the same general principles.
“An accounting information system (AIS) involves the collection, storage, and processing of
financial and accounting data used by internal users to report information to investors, creditors, and tax
authorities”, is the definition given by Investopedia (Tuovila, 2019). Essentially, this is explaining the
basics of an accounting information system as just a place for “storage” for different users. The
accounting information system acts almost as an inanimate “middle-man” between a company and the
users of the information. A company is able to store information in a system until a user (investor,
creditor, tax authority) wants/needs access to it. We initially think of an accounting information system
as all computers, and all digital. However, accounting information systems are composed of more than
that. They are composed of the people that calculate and input the data, the people that protect the
data, the protocols put into place, the software, the data itself, and of course the software. There’s a lot
more to it than just a computer disk or one person!
The history of information systems in accounting can be dated back along the timeline of when
the first computers were being researched in the early 1970’s to 1990’s. Badua and Watkins found it to
date back to roughly 1994 (Badua and Watkins, 2011). This timeline can be argued and debated due to
different definitions that different people have come up with. In Badua and Watkins article, “Too young
to have a history? Using data analysis techniques to reveal trends and shifts in the brief history of
accounting information systems”, they go back to the Greek root of the word ‘systems’ and it’s meaning,
“components standing together to form a whole” (Badua and Watkins, (2011). They also go on to state
that accounting information systems can be defined “as the joint deployment of traditional accounting
processes and computer and telecommunications technology for financial and managerial accounting
purposes [Mock, 1999]”. With these different definitions, we can see a wide variety of opinions and how
it can be difficult to pinpoint exactly when accounting information systems came into play.
Where is accounting information systems at today and what does it look like exactly? Intuit’s
Quickbooks or Quicken are both accounting information systems for the small business user. Before, just
anyone could go to the local store and pick up a “box” copy. However currently in 2019, Intuit has moved
all of their programs online where a user pays a monthly subscription and their data is synced across
devices. This has its advantages and disadvantages, of course. The advantages, one does not have to
worry about losing data, as it is all synced into the “cloud”. More advantages of this new software is
mobile management. This is a feature where you can download an application to your smartphone and
manage your expenses and other information on the go. With the mobile application, one may also sync
different accounts to their Intuit account so there is less manual entry. This saves a lot of time, and just
allows the user to verify the entries. This is a huge step from the original “box” system in 1998. Some of
the disadvantages is there is a monthly fee and not just a one time payment for the lifetime of the
software as it once was. However for all the new features, and for how much time it will save the
business, it really is a better value. For larger enterprises, you have systems such as Oracle NetSuite or
SAP Solutions.
What does the future of accounting information systems look like? With the progression of
accounting information systems, there has been speculation as to if accountants have a future need or if
software will “do it all” for small and mid-size businesses. In today’s world, software helps to do more of
the “traditional accounting duties” such as preparing financial statements, compiling and filing taxes, and
keeping up with employee’s time, payroll, etc. However, “One activity that technology will not be able to
replace for a couple decades is tax advice and filing”, according to Boylan, Phillips, and Latini (Boylan,
Phillips, and Latini 2018). While software can check for a lot of errors, and automate many things, there
is still something about human knowledge, interaction, and advice that it still does not have the ability to
outdo. Boylan, Phillips, and Latini also agree that “Auditing services are another thing technology will not
be able to take over easily due to it requiring a large amount of human interaction” (Boylan, Phillips, and
Latini 2018). Auditing is a very time consuming and detailed task that will take time before technology is
able to take over. As they also stated, one of the main reason’s is due to the fact “that it would not
provide reasonable assurance that financial statements are free of material errors” (Boylan, Phillips, and
Latini 2018). A set of human eyes checking for errors is always best. While computers can check for a lot
of things, there’s still some errors that only human eyes can catch.
Boylan, Phillips, and Latini found some of the benefits of information systems were that
accountants were “more efficient” ….”it means lower costs to customers but higher quality of work”
(Boylan, Phillips, and Latini 2018). However, the same “cloud” network referenced earlier with Intuit’s
QuickBooks comes with risks as well. “Security over data, reliability and performance issues, vendor lock
and data portability, dependence/lack of control” all are issues within the cloud programs (Boylan,
Phillips, and Latini 2018). This is where the ‘security’ part of information systems comes into play. One
must have a strong security network when dealing with any information systems in accounting in order
to protect the secure information at hand. In present day, accountants must keep up with the demand of
what is current. This means keeping up with the latest information system software, which can be hard
to do. Cloud based accounting is one way for accountants to keep up with the ‘supply and demand’ of
todays customers. Today’s customers are looking for “advice, frequent communication, and
collaboration, which is discouraged by hourly billing” and by using the cloud-based software, it “makes
accountants more efficient, which gives them extra time to be of value to their clients” (Boylan, Phillips,
and Latini 2018).
God calls us to have accurate measurements in the Bible as well. Leviticus 19:35-37 says, “You
shall do no wrong in judgement, in measures of length or weight or quantity. You shall have just
balances, just weights, just ephah, and a just hin: I am the Lord your God, who brought you out of the
land of Egypt. You shall observe all my statutes and all my rules, and do them: I am the Lord” (Leviticus
19:35-37 ESV). Whether we are using information systems in accounting, or in regular day to day life,
God calls us to be accurate with our measurements. He calls us to be honest and just with his Word and
abide by his commandments that He has set forth. 2 Chronicles 24:11-12 says, “And whenever the chest
was brought to the king’s officers by the Levites, when they saw that there was much money in it, the
king’s secretary and the officer of the chief priest would come and empty the chest and take it and
return it to its place. Thus they did day after day, and collected money in abundance. And the king and
Jehoiada gave it those who had charge of the work of the house of the Lord, and they hired masons and
carpenters to restore the house of the Lord, and also workers in iron and bronze to repair the house of
the Lord” (2 Chronicles 24:11-12 ESV). This isn’t necessarily the ‘technology’ side of information systems
in accounting, however it does show how even in the Bible times, they did have a type of accounting
system in play. Their money was managed in some form of fashion. They didn’t have the same
technology we have today; however, they still made sure that money was accounted for every single day.
We can also see how they invested their money/gold back into the housed of the Lord. This is also a
lesson that we can take into account today is to remember to give back to the Lord. The Lord always
provides for us, no matter what the situation is.
References
1. Badua, F. A., & Watkins, A. L. (2011). TOO YOUNG TO HAVE A HISTORY? USING DATA
ANALYSIS TECHNIQUES TO REVEAL TRENDS AND SHIFTS IN THE BRIEF HISTORY OF
ACCOUNTING INFORMATION SYSTEMS. The Accounting Historians Journal, 38(2), 75-
103. Retrieved from http://ezproxy.liberty.edu/login?url=https://search-proquest-
com.ezproxy.liberty.edu/docview/1282885600?accountid=12085
[ Mock, T. (1999), "Accounting Information Systems in the Encyclopedia of
Business." Accessed June 10, 2009 from http://findarticles.com/p/articles/
mi_gx5209/is_1999/ai_n19125599/. ]
2. Boylan, D. H., Philipp, J. L., & Latini, M. A. (2018). PROGRESSING TECHNOLOGY AND THE
OBSOLESCENCE OF ACCOUNTANTS. International Journal of Business, Accounting and
Finance, 12(1), 103+. Retrieved from
https://go-gale-com.ezproxy.liberty.edu/ps/i.do?p=AONE&u=vic_liberty&id=GALE|
A562050241&v=2.1&it=r&sid=summon
3. Tuovila, A. (2019). Accounting Information System (AIS) Retrieved from:
https://www.investopedia.com/terms/a/accounting-information-system-ais.asp
4. Asatiani, A., Apte, U., Penttinen, E., Rönkkö, M., & Saarinen, T. (2019). Impact of
accounting process characteristics on accounting outsourcing - comparison of users and
non-users of cloud-based accounting information systems. International Journal of
Accounting Information Systems, 34, 100419. Retrieved from:
https://www-sciencedirect-com.ezproxy.liberty.edu/science/article/pii/S1467089518300629
5. Dagiliene, L., & Šutiene, K. (2019). Corporate sustainability accounting information
systems: A contingency-based approach. Sustainability Accounting, Management and
Policy Journal, 10(2), 260-289 Retrieved from:
