Caberte, Jona B.

BSA-2

AC 508

MW 9:00-10:30

1. The difference between data and information is that data are mere collection of facts while
information is a processed data. Data may or may not be processed and have no direct effect
on the user. These are usually determined by physical form. On the other hand, information is
determined by the effect it has on the user. It causes the user to take an action that he could
not, or would not, have taken to resolve conflicts, reduce uncertainty, and make decisions.
2. Accountants need to understand the organizational structure of the business so that they
would know the distribution of responsibility, authority, and accountability throughout the
organization. With this, accountants would be able to evaluate which information they need.
Senior head, having their authority, could give information to its subordinates and assign them
their respective responsibility and accountability. This is relevant for accountants to know who
is responsible, authorized and accountable for certain acts and information.
3. The distinction between AIS and MIS centers on the concept of a transaction. Accounting
Information System is a subset of MIS that processes financial transactions and nonfinancial
transactions which directly affect the processing of financial transactions. Management
Information System processes nonfinancial transactions that are not normally processed by
traditional AIS. MIS broadly refers to a computer-based system that provides managers with
the tools to organize, evaluate, and efficiently manage departments within an organization. The
information obtained through AIS is critical for MIS.
4. It is important to organizationally separate the accounting function from other functions of
the organization to distinguish the responsibilities, authorities and accountabilities of
accounting function from others. Furthermore, the accounting function does not actively
partake in the physical activities of other functions such as those that maintain stewardship of
physical resources. Accounting function merely support these function by providing information
to others. The concept of accounting independence is crucial to provide reliable information to
users.