Ethics in accounting and accounting information systems help in the management of an organization’s finances. Accounting ethics refers to the specific rules and guidelines that an organization sets regarding financial information. These guidelines, therefore, govern the people associated with accounting thus preventing missies of finances or their positions. An accounting information system on the other hand helps in the collecting, storing, and processing of financial and accounting data. Decision-makers of an organization use this system thus enabling them to make informed financial decisions. This system is a computer-based method since it uses information technology resources to track accounting activities.
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THE FUNCTIONS OF AN ACCOUNTING INFORMATION SYSTEM
An accounting information system has three major functions. Firstly, it ensures efficient and effective collection and storage of data. This is because it contains storage data tools that prevent data loss hence securing an organization’s information. Secondly, it ensures that controls are in place to accurately record and process financial data. This helps to enhance ethics in accounting. It also helps in producing managerial reports and financial statements that help in tracking a company’s financial records. This, therefore, helps a company in budgeting its finances. Lastly, it helps in supplying information that is useful in decision-making by an organizational management board.
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THE ADVANTAGES OF ETHICS IN ACCOUNTING
Ethics in accounting is advantageous since it helps to prevent the misuse of the information available of the client with the accountant, auditor, or other accounting persons. Also, it helps to instill punishment to persons liable for accounting misconduct. This, therefore, creates fear in the people thus leads to the following rules appropriately. Third, with the help of an accounting information system, it helps the business to grow since it creates the right image in the eyes of the customers and other parties. Additionally, it creates a good professional environment since everyone has a proper mindset on the importance of maintaining high levels of ethical standards. Lastly, it decreases legal liabilities for sn organization since things are well taken care of.
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