Research Project On Implementation of Accounting Information System in Companies in Bangladesh: A Case Study

Course Code: MBA 700 Course Title: Research Project

Prepared By
Name: Naresh Chakma ID No: 09515027

Md. Nazmul Hasan

Assistant Professor of Finance & Head of MBA Program School of Business University of Information Technology & Science (UITS)

Prepared For

[A Research Submitted in partial Fulfillment of the IMBA Program in the University of Information Technology and Sciences (UITS)]

Date of Submission: 18th December 2012

UNIVERSITY OF INFORMATION TECHNOLOGY & SCIENCES (UITS)

Letter of Transmittal
December 18, 2012 Md. Nazmul Hasan Assistant Professor of Finance & Head of MBA Program School of Business University of Information Technology & Science (UITS) Dear Sir, It is a great pleasure for me to submit the report titled, Accounting Information System: Factors One Should Consider When Establishing a Useful Accounting Information System. I am submitting this report as for partial fulfillment of Master in Business Administration degree, as a part of academic curriculum. This report will help the organization to establish a useful Accounting Information System. This is a descriptive study in a complete form and I have tried my best to complete the study in proper format. It is true that it could have been done in better way if there would not be any limitations. I appreciate you will asses my report considering the limitations of the study. Your kind advice will encourage me to do further research in future. Sincerely yours,

Naresh Chakma ID: 09515027 Department of MBA Program School of Business

Acknowledgement

I am very glad to have to opportunity to submit this report on Accounting Information System: Factors One Should Consider When Establishing a Useful Accounting Information System. as an integral part of my MBA program. I acknowledge my heartiest gratefulness to all who have extended their cooperative hands in preparing this report.

At first, I express my gratitude and acknowledge my indebtedness to my supervisor, Md. Nazmul Hasan for his overall guidance, advice and support in carrying out my assignment of preparing this report.

I also like to thank my family and friend for giving me continues support and suggestions.

Executive Summary
An Accounting Information System (AIS) is the system of records a business keeps maintaining its accounting system. AIS help to generate financial reports automatically. This includes the Trial Balance, Balance Sheet, Ratio Analysis and other financial reports of the business. The purpose of AIS is to accumulate data and provide information.

The primary objectives of the accounting function in an organization are to process financial information and to prepare financial statements at the end of the accounting period. Companies must systematically process financial information and must have Summary from source. Accounting Information Systems (AIS) combine the study and practice of accounting with the design, implementation, and monitoring of information systems. Such systems use modern information technology resources together with traditional accounting.

INDEX
Part 1. 2. 3. 4. 5. 6. Introduction.. Purpose of Study.. Scope of the Study... Objectives of the Study Limitation of the study. Methodology of Information Collection.. Page

7. Definition of Accounting Information System 7.1 Accounting software used in Accounting Information System. 7.2 Financial report and analysis from Accounting Information System ... 7.3 Importance of Accounting Information System 7.4 Advantages and Implications of AIS. 7.5 How to effectively implement AIS

8. Here is Four Organizations in Bangladesh whos using Accounting Information

System and was upgrade their Manual Accounting System to Automated or Computerized System by Using Accounting Software.. .

A. HSG.... B. JRC Powertech... C. Action Aid Bangladesh.. D. AEMS Group. 9. Reducing

the Threat Systems.. Levels for Accounting Information

10. Way to Control Accounting and Inventory.. 10.1 Security System 10.2 Separation if Duties................. 10.3 Independent Audits.. 10.4 Internal Reports 11. Direction for Future Research.. 12. How an effective Account Information System can fight against corruption..

13. Conclusion...

1. Introduction
An Accounting Information System should provide for the orderly assembly of accounting information and appropriate analysis to enable financial statements to be prepared. What constitutes an adequate accounting system will depend on the size, nature and complexity of the enterprise. The Accounting System may only need to consist of an analyzed-cash book and a list of unpaid invoices. The accounting information system of an organization can also be better understood in terms of accounting software used to run the accounting functions, the types of information, financial analysis and accounting reports that can be obtained from the accounting system and the internal controls set up to prevent fraud.

HSG, Haque Steel Group founded in 1985. Since then the company never stopped growing to up hold its vision of building continues growth in business and also for the nation's economy. HSG Using Accounting Information System in their Accounts Department.

JRC Powertech is a Sister Concern of JRC Group. JRC Powertech was established in 2000 as a manufacturer of Motor Control Panel Boards. As a part of JRCs diversification efforts, JRC quickly expanded into HT and LT switchgear manufacturing in 2002. These are the flagship products of JRC Powertech. JRC also deals with different types solutions to telecom operators, power generation, lighting engineering, and interior decoration. JRC believes, however, that the journey has just started and JRC continually seeks ways to improve our products, services, and overall customer satisfaction. JRC Powertech using ERP (Accounting, Inventory and MIS) software in their accounts and manufacturing department. Action Aid is one of the UKs largest international development organizations, helping poor people in 35 countries in Africa, Asia, Latin America and the Caribbean. Action Aid is committed to working for a world without poverty in which every person

can exercise their right to a life of dignity. It aims to eradicate poverty by overcoming the injustice and inequity that cause it. These Organizations Using Accounting Information System.

2. Purpose of the Study

The purpose of this project is to get some first hand idea about how an Organization establish and implement an Accounting Information System. And to know the benefits will come after implementation of Accounting Information System. This project is done on HSG, Action Aid Bangladesh, JRC Group, AEMS Group. These organizations are using Accounting Information System. And the primary objectives of the accounting functions in an organization are to process Financial Information and to prepare financial statements at the end of the accounting period. Companies must systematically process financial information.

3. Scope of the Study

I am very fortunate that I had work in various departments of the organizations thereby I gathered knowledge about the overall activities of the company. I have had an opportunity to gather experience by working in the different IT Department and Accounts Department. The area of concentration of this report is how an Organization establishes and Implementation Accounting Information System. The report also covers the functions of Accounting Information System, user s of AIS, Advantages and Implications of AIS, How to effectively implement AIS, Reducing the Threat Levels for Accounting Information Systems etc.

4. Objectives of the Study

The main objective of the study is to get a definite idea about how an Organization establishes an Accounting Information System. The specific objectives are as follows: 1. To know the overall activities of the Organization. 2. To know Software uses in an Organization. 3. To know how to implement an Accounting Information System. 4. To know how AIS maintained in an Organization. 5. To learn about the whole AIS process. 6. To know the useful of Accounting Information System. 7. To know the benefits of Accounting Information System. 8. To know how an Accounting Information System generate Financial Reports.

5. Limitation of the Study

To make a report various aspects and experience are needed. But I have faced some barriers for making a complete and perfect report. These barriers or limitations, which hinder my work, are as follows: Difficulty in accessing data of its internal operations. Non-Availability of some preceding and latest data. Some information was withheld to retain the confidentiality of the organization. Data unavailability was the constraint. Official documents on the detail activities of the department were not available. I dont have access into much confidential information of the organization. 9

6. Methodology of Information Collection

Analysis has been made on the basis of the objectives mentioned before in the context of " Factors One Should Consider When Establishing a Useful Accounting Information
System:

The paper will be written on the basis of information collected from primary and secondary sources. The primary information has been collected from the organizations whos using Accounting Information System and as well as some general employee of the organization. The secondary information has been collected from the organization website and different websites.

7. Definition of Accounting Information System

The collection, storage and processing of financial and accounting data that is used by decision makers. An accounting information system is generally a computer-based method for tracking accounting activity in conjunction with information technology resources. The resulting statistical reports can be used internally by management or externally by other interested parties including investors, creditors and tax authorities.

An Accounting Information Systems that combines traditional accounting practices such as the Generally Accepted Accounting Principles (GAAP) with modern information technology resources. Six elements compose the typical accounting information system:

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People - the system users. Procedure and Instructions - methods for retrieving and processing data. Data - information pertinent to the organization's business practices. Software - computer programs used to process data. Information Technology Infrastructure - hardware used to operate the system. Internal Controls - security measures to protect sensitive data.

Accounting Software used in Accounting Information System

A typical Accounting Information System for small business is supported by computerized or non-computerized cash book, general ledger, accounts payable (creditors ledger), accounts receivable (debtors ledger), inventory control, order entry and billing. Almost all businesses have already use computer software to computerize its accounting information system. There is no shortage of proven computerized accounting systems available in the market.

Financial report and analysis from Accounting Information System

The Balance Sheet, Income Statement, Debtors Aging, Creditors Aging, Inventory Valuation are the typical monthly and annual accounting reports that can be obtained from the accounting information system. Some organization uses these accounting reports in a strategic manner and performed financial ratio analysis on the accounting statements. These ratios can explained better the financial health of the organization such as cash liquidity, collection days from debtors, and return on investment. The ratios can also be compared against industry averages for benchmarking financial performance

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An integrated computerized accounting software system to produce relevant timely information and a sound system of internal financial controls are the two primary requirements for an effective and comprehensive accounting information system.

Importance of Accounting Information System

Overview
Accounting Information Systems (AIS) not only include software systems, but the entire set of business processes and resources that are used to pull together information from functional or tactical systems. Data is then presented in a user-friendly and timely manner so that mid and upper-level managers can use it to take the right actions. The entire system is designed so that the company will meet its strategic and tactical goals.

Significance
Organizations have multiple functional systems. These usually include sales systems, call center systems, financial systems, inventory systems, logistic systems and more. AIS combine information from multiple systems. This helps management staffers better understand their own departments' contributions. In many cases, the combination of data, such as sales figures combined with available inventory, help the manager take the appropriate action in order to meet the customer's needs.

Function The primary function of AIS is to help a manager take an action, answer a question or ask the right question. The questions or actions should directly relate to tactical or strategic goals. A sales manager who uses projections from the financial systems to compare with actual sales from the sales system can better gauge whether goals will be met. If the target is not going to be met, then the manager and his group can review their past actions and make necessary changes in order to increase sales and meet goals.

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Advantages and Implementations of AIS

A big advantage of computer-based accounting information systems is that they automate and streamline reporting. Reporting is major tool for organizations to accurately see summarized, timely information used for decision-making and financial reporting. The accounting information system pulls data from the centralized database, processes and transforms it and ultimately generates a summary of that data as information that can now be easily consumed and analyzed by business analysts, managers or other decision makers. These systems must ensure that the reports are timely so that decision-makers are not acting on old, irrelevant information and, rather, able to act quickly and effectively based on report results. Consolidation is one of the greatest hallmarks of reporting as people do not have to look through an enormous number of transactions. For instance, at the end of the month, a financial accountant consolidates all the paid vouchers by running a report on the system. The systems application layer retrieves the data from the database and provides a report with the total amount paid to its vendors for that particular month. With large corporations that generate large volumes of transactional data, running reports with even AIS can take days or even weeks.

How to Effectively Implement of AIS

As stated above, accounting information systems are composed of six main components: 1. People: users who operate on the systems 2. Procedures and instructions: processes involved in collecting, managing and storing the data 3. Data: data that is related to the organization and its business processes 4. Software: application that processes the data 5. Information technology infrastructure: the actual physical devices and systems that allows the AIS to operate and perform its functions

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6. Internal controls and security measures: what is implemented to safeguard the data When AIS is initially implemented or converted from an existing system, organizations sometimes make the mistake of not considering each of these six components and treating them equally in the implementation process. This results in a system being "built 3 times" rather than once because the initial system is not designed to meet the needs of the organization, the organization then tries to get the system to work, and ultimately, the organization begins again, following the appropriate process.

8. Here are four Organizations in Bangladesh those I have visited. Whos using Accounting Information System and were upgrading their Manual Accounting System to automatic or Computerized System by Using Accounting Software.

A. HSG Company
1.1 Overview of HSG
HSG established in 1985. Today Haque Steel Group is the only group in the steel industry of Bangladesh, with a complete composite manufacturing setup. Starting all the way from extracting iron from iron ore to manufacturing mild steel products. Haque Steel Group has also invested in cement manufacturing with its sister concern group, S.Co. Group to take part in the booming real estate development and construction industry of Bangladesh. They have also invested in the power sector to cope up with the acute energy crisis in Bangladesh.

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1.2 Mission
HSG Are Committed to Achieve Total Customer Satisfaction Through Supply of Quality Products and Service on Time, as Per Mutually Agreed Specifications and Terms. HSG Shall Achieve the Goal through Team Effort of Our Committed Employees by Continuously Enriching Quality Consciousness and Concern for the Environment in all Spheres of Activity in Our Prevailing Responsive Working Atmosphere.

1.3 Some Problems arises in HSG

Though HSG is a group of company and they have several business sectors like Steel Mills, Cements, Rea Estate Business and Others. So they have to maintained lots of transaction from different clients in different sectors of business. But they are following Manual Accounting System. Like cash book, ledger book, voucher book etc. all books maintained traditional accounting system. So that the Accounts Department of HSG facing many problems when submitting Accounting and Inventory Report to their top level management. Or to their clients. Because they have to build up all the accounting report for example: Balance Sheet, Trial Balance, Ratio Analysis, Profit Loss Accounts, Cash Inflow Outflow etc. manually. This is very time consuming also chance to increase error reporting. And also they were unable to prepare instant report for their top level management. The accounts department of HSG also prepares their Inventory Report manually. For example Sales Invoicing, Sales and Purchase order Processing, Grouping and Categorizing of stock Item, Batch Support, Multiple Godowns, Bill of material, Movement Analysis etc. All these reports are very difficult to prepare manually. And very very time consuming. Every time they have done some mistake when submitting report to Management. Accounts Department. So that the Chairman of HSG is very unsatisfied to their

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2. Circumstances after implementation Accounting Software in HSG

After facing these problems HSG was thinking to upgrade their manual accounting system in to Automated System, Also known as Accounting Information System. Then they purchased an Accounting Software which known as TALLY.ERP. And they implemented this software in to their Accounts Department. After one month later the Accounts Department of HSG was very satisfied of this software. Because of they can prepare Accounting Report Instantly and submit the reports timely. After voucher entry All Accounts Reports are generated automatically (Balance Sheet, Trial Balance, Ratio Analysis, Profit Loss Accounts, and Cash Inflow Outflow). They also prepare the Inventory Report (Sales Invoicing, Sales and Purchase order Processing, Grouping and Categorizing of stock Item, Batch Support, Multiple Godowns, Bill of material, Movement Analysis, Order status report, Stock Aging, Profitability analysis etc.) instantly. The main benefit of information systems in accounting is the speed of processing tasks. Data is entered once and can then be used and reused in compiling reports by literally pressing a button. If a transaction needs correction, it is easily done, with reports generated afterward at speeds never possible with manual accounting systems. Once data is entered into a computer, it is safe. The chances of losing data are remote, especially when you perform regular system backups. In manual systems, paper pads can be lost or damaged more easily. You can save data on the Internet, where it will not only be accessible anytime you need it but will also still be secure even if your computer is lost or damaged.

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Figure: Ratio Analysis of HSG

3. Other Benefits after Upgrade to Automated System in HSG

1. To fulfill legal requirements - records as per standards and practices 2. Keep the business running - manage receivables & payable, cash, bank. 3. Keep a watch on the pulse of the organization - key performance indicators 4. Respond to queries - to locate the right transaction immediately 5. With the entry of a voucher (this is what we call all accounting Transactions) all books of accounts, all reports, all totals & sub-totals are updated instantly. There is nothing more that needs to be done - whether you are inserting a forgotten entry, or correcting one 6. Supporting tasks like reminder letters, delayed interest, ageing, bank reconciliation

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7.

One

single

dashboard

to

look

at

all

important

business

ratios

8. Drill down from any report, even the Balance Sheet, right to any voucher or filter and search 9. Mark vouchers that are draft as 'optional' and convert these to final- with one button click. Finally the top level Management of HSG is very satisfied when the Accounts Department is submitting Accounting Reports timely and correctly. And now they are using this accounting software because of this software fulfill all recruitments which they want and increase more working efficiency then previous system.

Figure 1-2: Data Processing in Finance Department at HSG

Input-Progress billing Certificate, Subcontractors Progress certificate, Suppliers Invoice

ERP Accounting System

Output - Financial Statement

Human Element Finance Personnel

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2. JRC Group
JRC Powertech is a Sister Concern of JRC Group. JRC Powertech was established in 2000 as a manufacturer of Motor Control Panel Boards. As a part of JRCs diversification efforts, JRC quickly expanded into HT and LT switchgear manufacturing in 2002. These are the flagship products of JRC Powertech. JRC also deals with different types solutions to telecom operators, power generation, lighting engineering, and interior decoration. JRC believes, however, that the journey has just started and JRC continually seeks ways to improve our products, services, and overall customer satisfaction. JRC aim is to be a leading regional manufacturer of electric switchgear by providing product with the highest level of technical excellence and reliability, coupled with responsive, effective, and flexible services to ensure total customer satisfaction. JRC ensures highest level of quality of the products that it manufactures. JRC employs all the three phases of process controlling mechanism i.e. raw material quality control, production process control, and finally post-production quality control. At the beginning of the process, JRC makes sure to comply with set standards and local regulatory norms in sourcing and procuring the highest quality raw materials. During the time of manufacturing a product, strict process control is employed to make sure that an added component fits well with the total system. Finally the fished product is tested before it is delivered. As JRC is more of solution provider, we make sure that our manufactured products meet the clients specific requirements.

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2.1 Vision and Mission of JRC Group 2.1.1 Vision Being innovation technology driven company driven company consistently world class products ensuring better living standards of people through continuous evolutions of value added services provided by highly professional, dynamic and committed team. 2.1.2 Mission JRC shall increase our turnover by 100% by next three years. JRC shall remain transparent and socially committed and ethical company by ensuring better electrical better electrical solutions enhancing peoples living standards.

3. Software use in JRC Group:

From beginning JRC Powertech used Microsoft office Package for their official purpose and still using this software. And all accounting reports prepared through Microsoft Excel. This is very powerful software to generate any kinds of report. But some lacking in this software. It is time consuming because of by using Excel they have to know some excel formulas and those are very difficult to remember when working in Excel. Was hampering to submit the Accounts Report timely and also hampering when serve reports to their existing client demand and also to reach their goal. At that time they were thinking about Automation Software which will fulfill their all demand (Accounting, Inventory, HR, and Payroll Management). That means they were thinking to upgrade their system in fully into Automation System. This is also called Accounting Information System because AIS is fully computerized System. After few days they implemented TALLY.ERP 9 software in their Accounts and HR Department. When data is entered in an accounting system, manual or computerized, an accountant needs to classify it in a detailed fashion. For example, a transaction could be 20

sales revenue or interest revenue. Using Accounting information systems, this classification process is easily accomplished with a drop-down menu from which you choose the proper category. They can also quickly generate reports involving classifications. With a manual system, this process takes much more time. After that JRC Accounts Department felt ERP software increased their working efficiency and they can generate report at right time. All Accounting report like Balance Sheet, Trial Balance, Profit Loss A/C, Ledger Wise Report, Final Account Report, Ratio Analysis, Income Expense Expenditure, Flexible Classification of Accounts Heads, Payroll Management etc. are generating in ERP Software. To prepare all these report by when using manual system or using by Excel Program are so difficult. But using ERP software is the easy way to generate that report because in ERP Software there is some pre programming code. This is 100 percent tested before using in ERP Software. Because Accounting Information Systems typically integrate with a company's existing systems. How well these varied systems integrate often creates many challenges for internal and external resources.

4. Payroll Management System in JRC:

ERP means enterprise Resource Planning. In ERP software HR & Payroll Management System Must is included. JRC Powertech also maintains their payroll system in their ERP Software. So that they can generate Pay slip, Salary Sheet and also store their employs information. For example: 1. Create and maintain the employee database viz. contact details, personal

details, bank account details, statutory details etc., EXPAT details like passport, Visa and work permit details. 2. Employee group or department wise categorization. 3. Attendance, overtime, leave or production details can be recorded.

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4. Multiple salary structures can be created for different group of employees. For example, department wise salary structures and salary processing. 5. Support Salary revision and arrear calculation both as prospective and retrospective change. 6. Tracking of loans and advance paid to employees and defining multiple criteria for recovery of such advances. The loan / advances can be recovered in complete or a number of installments from employee's salary. 6. Complete support to implement Provident Fund and Employee Insurance Schemes along with Professional Tax calculation. 7. Supports Gratuity as per the specified criteria 8. Time spent on processing salaries, manual and paper work can be cut down to a great extent. 9. Accurate and timely salary processing. 10. Tracking and reviewing of employee's absence and salary calculation as per the attendance is much easier. 11. Generate the Payment Advice to instruct the bank for salary payment. 12. Pay slips can be printed, exported to Excel or emailed to the respective email accounts of the employees. 13. All payrolls related reports can be generated with a click of a button. 14. Above all, the Payroll feature is completely integrated with Accounts Finally JRC Powertech implemented Computerized or Accounting Information System Successfully. And they are now fully depended on Computerized System for generating any kinds of Accounting Reports which up to date their Accounts Department. 22

Figure: JRC Power Balance Sheet Report in Tally.ERP

Figure: JRC Power Trial Balance Report in Tally.ERP

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3. Action Aid Bangladesh 3.1 What is Action Aid?

Action Aid is one of the UKs largest international development organizations, helping poor people in 35 countries in Africa, Asia, Latin America and the Caribbean. Action Aid is committed to working for a world without poverty in which every person can exercise their right to a life of dignity. It aims to eradicate poverty by overcoming the injustice and inequity that cause it.

3.2 Action Aid Bangladesh

Action Aid Bangladesh always had a distinctive approach be it from the early days of simplicity to todays complex nature of issues. Action Aid Bangladesh starting its

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journey from a very small with a minimalist approach today has become a relatively important player of the vibrant NGO movement that seeks to fight poverty in the country. Action Aid came to Bangladesh in 1983 to support an orphanage in Bhola named 'For Those Who Have Less' (locally known as 'Bittohin'). Today ActionAid is committed to changing the capacities of people and groups whose rights have been denied and violated in attaining justice and a life of dignity. Action Aid Bangladesh also assists efforts and builds capacities of actors of civil society and partner communities whom we believe are engaged in safeguarding and promoting peoples rights.

3.3 Action Aid Activities in Bangladesh: Action Aid focuses on the people that others forget. People in poverty. People who face discrimination. People whose voices are ignored. Action Aid helps people fight for the rights that they are denied. Simple things, like the right to eat. The right to stay on their land. To an education. To have a say in the decisions that shape their lives. Action Aid listens to what people really want and need. Action Aid help communities take action together to hold their governments to account, and Action Aid give local organizations our support where they need it. To run their activities as properly they are working with their partner NGOs whose are working for the poor people and developing the remote area in our country. Action Aid Partner NGOs are 1. SPED 2. RACINE 3. Bangladesh Association for Community Education (BACE)

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4. Shusilan 5. Sharp 6. Amra Kaj Kory 7. CAAP 8. CSID 9. BITA 10. WAVE Foundation All of these NGO are working constantly strive to accelerate support for antipoverty initiatives and improve sustainability of development interventions that are inclined towards creating a confident and responsible nation, free from poverty and indignity.

3.4 Some Problems in Action Aid Bangladesh Partner NGOS

Action Aid Bangladesh is the controller of their partner NGOs. Action Aid Bangladesh inquiry team always active for their partner NGOs. Because some NGOs are not working properly as instruction. And also chance to misuse the funded amounts which donated by foreign country. And some times they are not submitting report timely. Also submit false report. So Action Aid Bangladesh trying to solve this type of problem through established Computerized System and All partner NGOs will come in a network.

3.5 Accounting Information System in Action Aid Bangladesh and Partner NGOs:

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NGO stands for non-governmental organization. And all NGOs are NonProfitable Organization. They have no profit loss accounts. They are containing Income Expenditure Accounts. They raise their fund from donation of 1st World Countries. And many rich people are donating fund for the NGOs. So that NGOs have to maintain their fund properly and submit their activities reports to the donor agency whether their funds are using properly or not. Also NGOs need to submit Accounting Reports to the donor agency. Because some times their donated funds are not using in right purpose. So that Action Aid Bangladesh trying to establish a complete computerized system for their partner NGOs. And network. At first time Action Aid Bangladesh implemented Accounting Software for their some partner NGOs. For example in RACINE NGO which located in Faridpur, they established a fully computerized accounting system also known as accounting information system in RACINE. In RACINE Mr. Delwar Hossain working as an Accountant. At beginning he maintained their accounts manually by using cask book, ledger books etc. This was very difficult for him to prepare reports. After that they used computer and used Microsoft Office package. This was increased working efficiency. So their Executive Director was very happy to saw all types of reports at a time. Because every month ED have to submit reports to their Head Office. But their was a problem when prepared accounting reports. Because Accounting Reports is different from other reports. To prepare Accounting Report is not too easy. So to improve their computerized system they were thinking Software which will perform as EPR (Enterprise Resource Planning). Action Aid Bangladesh helped to establish ERP Software in RACINE. In 2010 they purchased A ERP Software which containing Accounts, HR Management and Payroll Management. At implementation period they imputed their previous data in to ERP Software. And they were very much surprised when they saw the output repots like Accounting Reports (Balance Sheet, Trial Balance, Income Expenditure Accounts, Cash Book, Bank Book, Bank Reconciliation, Ledger wise report, Sundry Debtors, Sundry Creditors), HR Reports trying to control their branch office from Head Office through

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like Employee Information, Attendance, Recruitment etc. and also payroll details of their employee. They really surprised all these reports produced by only in an ERP Software. Just voucher input time needed to generate reports. Thats called Accounting Information System. Which system will increases working efficiency also secured, time saving etc.

Figure: Income Expenditure Reports of RACINE

Now RACINE is fully dependable in Computerized Accounting System and they can report timely to Head Office. Even they can access to their ERP Software by using Internet at any time.

4. AEMS Group
4.1. Overview of AEMS Group 28

Bangladesh is a familiar country which is located in South Asia and shares its borders with India and a small common border with Myanmar in the southeast. It is the seventh most populous country in the world and is mostly densely inhabited. Bangladeshs economy infrastructure is characterized as poor and developing, despite several improvement efforts at the national and international levels. For higher GDP growth, investments in both public and private sectors will need to be accelerated. So that AEMS Group participates in many sectors for economical development of Bangladesh

4.2. Mission of AEMS Group Bangladesh is green and naturally wonderful. It is the responsibility of all to establish this inexhaustible country as the self-dependence and industrial developing country in the world. In 28th January2007, AEMS was founded at Tongi, Gazipur along with some broad hearted young being inspired as undergo of this responsibilities. As going round of time more of some honest, mindful and established persons of the society approach into this Organization. In such of this outcome, the Organization possesses the slogan as "Wishing towards a dreamed land" into the heart. From the beginning of the business, we have been able to achieve the confidence & reliability to all of society. So let come with us who have strongly confident to illustrate their reality of dream by applying honesty, competency, cordially and loving industriousness and build up more abundance our dear homeland by announcing in solidarity with us.

Sister concern of AEMS Group

1. AEMS Bangladesh Ltd

AEMS Design World AEMS Securities House

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AEMS Multi Farm AEMS Communications AEMS Publication AEMS Fishery AEMS Travels &Tourism

2. AEMS Properties & Development 3. AEMS Finance & Commerce MCS Ltd

4.3 Various Software use in AEMS Group From Beginning AEMS Group using Automated Accounting System to run their business. Because they run different types of business and in different sector. For example they Using Oracle Data base Software, Customized software, POS software, Inventory Software, Tally.ERP software in different location. So that they are using typical Accounting Information System. Thats why they can run their business smoothly. For example they are using inventory software in AEMS Publication and AEMS Design World. To run production at first they have to purchase Raw Material to make finished produce. Various types of Raw Material are using to make finished goods. So they using inventory management software to maintain their stock of Raw Materials and others related information. And the inventory management software is integrated to Accounting ERP Software to know the Accounting Related Information. For example when outward of Raw Material that direct effect to the Accounts. So user of software generates stock summery at any time. And also time saving. Because an effective system of internal controls must provide regular status reports to managers and other decisionmakers. A Accounting information system can combine any operational or statistical data, and present it to managers in a readable, logical format. An AIS can create reports on basic information, such as daily sales and expenses at each retail outlet, and more complex data, such as the average number of unacceptable and barely acceptable Mistakes on a specific production line sect

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4.4. Benefits of Inventory and Accounting ERP Software in AEMS Group Bill of materials and Manufacturing Journals, to record material conversions Compound bill of materials support, for units that contain assemblies Multiple locations (go downs) Excise for manufacturers, including all documentation and invoice Costing for jobs Multiple price lists, with effective dates of applicability Use multiple units of measure (say KG's & grams) Dual units of measure (say KG's and bags, to support variations as happens in commodities) High speed billing, with support for POS printers Bar code support Automatic application of taxes Service billing & service tax Integrated sales return in bills Print bills (and any other document) in the customers language Define minimum quantity to order as a definite number or based on consumption Pull up a report that shows the stock position, including complete details of open Make entries in accordance with supporting documentation, including errors your suppliers could have made (say of multiplication & round off) Incorporate additional costs Automatically manage input taxes Flexibility allows receipt of goods, quantities and rates different from that ordered since this is common in real life Record samples & free items (using different 'actual' & 'billed' quantities) Multiple receipts for one order or one receipt for multiple orders, or against verbal orders Figure: Pay Slip Details by using ERP Software

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All these benefits are come by using Accounting Information System or Computerized System. And we see that that AEMS Group is a fully dependable in computerized system. And they are satisfied by using software.

9. Reducing the Threat Levels for Accounting Information Systems

9.1 Threats to Accounting Information Systems

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Threats to accounting information systems come from a variety of sources. If ignored, they can destroy the relevance and reliability of financial information, leading to poor decisions by various stakeholders At the point of data collection, it is important to establish security controls that ensure that transaction or event data are valid, complete, and free from material errors. Masquerading (pretending to be an authorized user) and piggybacking (tapping into telecommunications lines) are examples of hacker activities that can seriously impact valid data collection. Threats to accounting information systems can also occur during the data processing phase. Creating illegal programs, accessing or deleting files, destroying or corrupting a programs logic through viruses, or altering a programs logic to cause the application to process data incorrectly all represent threats. Threats to database management might include unauthorized access that allows altering, deleting, corrupting, destroying, or stealing data. The failure to maintain backup files or other retrieval techniques represents a potentially devastating loss of data. Threats to the information generation and reporting phase must also be considered. For example, the theft, misdirection, or misuse of computer output could damage the competitiveness or reputation of the organization. Advances in information technology and increased use of the Internet require that management, accountants, auditors, and academicians become more knowledgeable and conversant in the design, operation, and control of accounting information systems.

9.2 Implications for Accountants and Auditors Accountantsas users, managers, designers, and evaluators of information systemsshould be knowledgeable of security threats and appropriate control techniques in order to protect their own information systems and to advise businesses about security

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risks. A companys use of information technology and the security of the accounting information system affect the companys internal control over financial reporting. System processes and system-generated entries for valid transactions and events are an integral part of financial reporting. Since the advent of computer systems that capture, verify, store, and report the data used in financial reports, new security issues involving technology have developed.

10. Way to Control Accounting and Inventory

Accounting systems and inventory can be especially vulnerable to theft, fraud or outright AIS management. Controlling the integrity of your accounting records and the security of your inventory can directly contribute to your bottom line by reducing unnecessary expenses. Small business owners have a range of internal control options available to them, and each business requires a unique set of controls to adequately secure its assets.

10.1 Security System

All accounting data and inventory should be held as securely as possible. Restrict access to inventory storage areas, and install security cameras with recording devices. Perform regular and random inventory counts to uncover issues of theft or waste quickly. Accounting data can be compromised just as easily as inventory or cash, and criminals can do the same amount of financial damage by manipulating accounting records as by physical theft. Protect all servers and computer workstations with passwords, and hire an in-house or third-party network security specialist to secure access to your files. Compare internal financial data with bank statements and financial documents to ensure that your records remain accurate.

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10.2 Separation of Duties

The philosophy behind separation of duties is that theft by collusion becomes harder when more people are involved in a multi-step process. Accounting and inventory duties involve a number of activities and steps; separating these duties among employees at various levels of your company can help to reduce incidents of collusion. Do not allow the same person to place inventory orders and check the accuracy of incoming shipments, for example. Do not allow the same person to make bank deposits and enter cash receipts into the accounting system, as another example.

10.3 Independent Audits

Third-party financial audits can be expensive and present an impediment to normal productivity, but they are well worth the expense if they uncover cases of financial fraud or theft. Auditors will dig deep into your accounting system and financial records to ensure that all accounting duties are being performed in an ethical and professional manner. Give your staff only enough advance notice to allow them to prepare for their role in the audit; do not provide notice far enough in advances for thieves to cover their tracks.

11. How an effective Account Information System can fight

against corruption?

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In its simplest terms, corruption may be defined as the abuse of public position for personal gain or for the benefit of an individual or group to whom one owes allegiance. Corruption occurs when a public official accepts, solicits, or extorts a payment, or when private agents offer a payment to circumvent the law for competitive or personal advantage. Corruption is a two-way process, involving members of both the public and private sector, who are engaged in illegal, illegitimate and unethical actions that diminish a countrys economic prospects and degrade its social and political institutions. Corruption is a symptom of weakness in political, social, legal and economic systems. An effective litmus test to assist in determining the difference between corrupt and non-corrupt actions is whether activities are carried out in an open, transparent, and accountable manner. Corruption is not new, nor is it confined to any particular part of the world. On the contrary, corruption is a global phenomenon, although its severity varies from country to country.

An Effective Accounting Information System can fight corruption in these ways: 1. Effective recruitment procedures. 2. Effective internal audit. 3. An Anti-Fraud & Corruption Policy Statement that emphasizes the importance of probity to all concerned. 4. Assigning accountants to system project terms. 5. Assigning person who are knowledgeable in both accounting and information system function. 6. Establish an internal audit group, staff by accountants and system-oriented auditors. 7. Establishing data control groups with in accounting department. 8. Member support.

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9. Assigning both the controller and the information system manager to the steering committee. 10. Codes of conduct for Members and Officers. 11. Contracts Procedure Rules and Financial Procedure rules. 12. Sound internal control systems, procedures and reliable records. 13. Clear disciplinary procedure. 14. A dedicated Benefits Investigation Team 15. Clear responsibilities, accountabilities and standards set out under the Scheme of Delegation. 16. Induction and training. All of these contents included in Accounting Information System. These contents have in place a clear network of systems and procedures to assist it in the fight against fraud and corruption. It is determined that these arrangements will keep pace with any future developments, in both prevention and detection techniques, regarding fraudulent or corrupt activity that may affect its operation or related responsibilities.

12. Conclusion

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The automated AIS could speed up information process and overcome traditional human weaknesses. As a result, the system supports the resource management and help organization pursue its projection of continuing business profit. The use of AIS indicate the growth of tacit and explicit knowledge, where personnel were trained intensively and experience and trouble shooting were recorded for future reference and training. Indeed, HSG, JRC, Action Aid Bangladesh and AEMS Group were successfully implemented AIS in their Organization. The successful implementation of an accounting information system can be described as a series of complex, interconnected activities necessitating participants to have technical and managerial skills to sort out prospective problems.

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Reference

1. Joseph w. Wilkinson , Michael J. Cerullo, Vasant Ravel, Bernad Wong-On-Wing Accounting Information System 14th Edition (2003) 2. www.hsg.com.bd 3. www.aemsgroup.com 4. www.actionaid.org/bangladesh 5. www.jrcgroup.com.bd 6. www.stminfotech.com 7. www.tallysolutions.com 8. www.investopedia.com/articles/.../accounting-information-systems 9. www.ehow.com 10. http://en.wikipedia.org/wiki/Accounting_information_system 11. http://alpha.nyit.edu 12. www.investopedia.com

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