Eastern University

Course Name & Code: Accounting Information System (ACT 411)

Term Paper
On
Accounting Information System of
AKIJ Food & Beverage Ltd.

Submitted To

SUZONA ASAD
Lecturer
Faculty of Business Administration

Submitted By

MD. NASIM SHARIF KHAN ID: 15 12 000 09

MAHMUD HOSSAIN ID: 15 12 001 48
SK MAHMUDA RAHMAN ID: 15 12 000 87

Date of Submission: April 9, 2018

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 Term Paper on
Accounting Information System
Of
AKIJ Food & Beverage Ltd.

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Table of Content

No. Topics Page

1. Acknowledgement 4
2. Letter of Transmittal 5
3. Executive Summary 6
4. Introduction 7-8
5. Overview of AIS 9
6. Review of AIS in AKIJ Food & Beverage 10-11
7. Implementation of AIS 12-14
8. Conclusion 15

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Acknowledgement
At first I express my gratefulness to almighty Allah as I have completed this Term Paper on the
topic “Accounting Information System on AKIJ Food & Beverage Ltd.” Successfully by his
mercy. I would also like to thank my honorable course teacher MS. SUZONA ASAD, for whom
I have prepared this report. I would like to acknowledge & extend my heartfelt gratitude to his
because of the vital encouragement & support & assistance.

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Letter of Transmittal
9th April, 2018
Suzona Asad
Lecturer
Faculty of Business Administration
Eastern University

Subject: Submission of Term Paper.

Dear Madam,
It is my pleasure to submit the term paper, which is done as a part of academic curriculum to you
for your kind evaluation. The report is prepared on “Accounting Information System on AKIJ
Food & beverage Ltd.”. I have put my best effort in preparing this report & to make it a worthy
one. Each aspect of the problem in considered & studied as required.

If any confusing arises r any further explanation is needed. I will be readily available to explain
the matter to you, as the situation required.

Sincerely Yours,

MD. NASIM SHARIF KHAN

MAHMUD HOSSAIN
SK. MAHMUDA RAHMAN

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Executive Summary
Accounting information systems (AIS) is one of information systems that produce many amounts
of data for use by decision makers both within and outside organizations. Since accounting
information is able to measure and present economic events to users financial statements for
judgments and decision makings. American Accounting Association (AAA) address accounting
information system (AIS) is one part of management information system (MIS) that gather,
classify, and comply data for internal and external decision making. Hence, accounting
information system has importance and widely use in accounting profession. Accounting
manager need to exploit accounting information for job success of their organizations. Therefore,
job success must be obtaining reliable, relevant and timely accounting information for decision
making In other words, effectiveness of accounting information system is reliability, relevance,
and timeliness. Information technology (IT) is important for accounting information system for
proving quality information. It is difficult to obtain competitive advantage without application of
accounting information system. However, the antecedents of effectiveness of accounting
information system (AIS) have been made to examine in this research. The first antecedent is
learning organization and the last antecedent is organizational support.

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Introduction
Overview of the Company

History of AKIJ Food & Beverage Ltd. stretches back to later part of the forties. In its infancy,
the Group started in humble way with jute trading which was known as the golden fiber of the
country, earning highest amount of foreign exchange. In the second phase, the Group went into
manufacturing handmade cigarettes popularly known as bides. This sector gave a real boost to
the revenue earning of the Group as well as making a substantial contribution to government
exchequer. With the passage of time, the Group undertook new ventures and presently there are
15 units of industries under its umbrella like cigarettes, handmade cigarettes, printing &
packaging, textiles, hand board, pharmaceutical, leather processing and real-estate business are
in operation, catering jobs for more than 32,000 people in various categories.

The Group has plans for setting up more projects. The projects are already in pipeline. Foreign
investors have shown keen interest in joining with us for joint ventures. The matter is under our
active consideration and will hopefully soon mature. This will also help the nation’s economy
growth and will create job opportunities to various professionals.

AKIJ Food & Beverage Ltd. is also involved in socio-cultural activities. The Group has been
operating a sizeable orphanage free of charge in district town. The Group has also acquired a
modern mother & children hospital previously owned by Save the Children (UK). The hospital is
being operated as a non-profitable concern by Ad-Din Welfare Trust.

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Company Background
The legacy of AKIJ GROUP is over half a century old and over the years AKIJ has established
itself as the full of confidence and much revered industrial family of Bangladesh. AKIJ Group is
one of the biggest conglomerates in Bangladesh. It consists of 24 big concerns with diverse
activities & different products. AKIJ Group launched its venture as a small jute trader more than
50 years ago. Since then it has been progressing with tremendous pace in the industrial area of
Bangladesh. A large number of people are employed by the group and cared for as members of
the AKIJ family. The non-profit concerns are also involved in sustaining development of the
country & for social welfare.

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Overview of Accounting Information System
What is an 'Accounting Information System - AIS
An accounting information system (AIS) is the collection, storage and processing of financial
and accounting data used by internal users to report information to investors, creditors and tax
authorities. An accounting information system is generally a computer-based method for tracking
accounting activity in conjunction with information technology resources. An accounting
information system combines traditional accounting practices, such as the Generally Accepted
Accounting Principles (GAAP), with modern information technology resources.

BREAKING DOWN 'Accounting Information System - AIS'

An accounting information system contains various elements important in the accounting cycle.
Although the information contained in a system varies among industries and business sizes, a
typical accounting information system includes data relating to revenue, expenses, customer
information, employee information and tax information. Specific data includes sales orders and
analysis reports, purchase requisitions, invoices, check registers, inventory, payroll, ledger, trial
balance and financial statement information.

In addition, accounting information systems are often highly secured platforms with preventative
measures taken against viruses, hackers and other external sources attempting to collected
information.

Data Storage and Recall

An accounting information system must have a database structure to store information. This
database structure is typically programed with query language that allows for table and data
manipulation. An accounting information system has numerous fields to input data as well as
edit previously stored data.

Data Output

The various outputs of an accounting information system show the versatility of its data
manipulation capabilities. An accounting information system produces reports including
accounts receivable, aging reports based on customer information, depreciation schedules for
fixed assets and trial balances for financial reporting. Customer lists, taxation calculations and
inventory levels may also be reproduced. However, correspondences, memos or presentations are
not included in the system because these items are not directly related to a company’s financial
reporting and bookkeeping.

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Review of AIS of AKIJ Food & Beverage Ltd

As the company’s accounting procedures are under information system, they use the software of
ERP that consist of the version of 1.2.1. Microsoft is the vender where the software implemented
in 2010 & have taken 1 year to complete the implementation process.

Before implementing the system the company considered chart of accounting & sales. 80% of
satisfaction has seen about the support service from the vendor company & 90% of support has
given from the management of the company. There are a steering committee consisting of 5
members for implementing AIS in the company.

Initial cost of setting up was 190000000 BDT & the entire system costs 55000000 BDT yearly to
run all the procedures under AIS. The system is monitored by the IT Department of the company
using monitoring tools like; PRTG

The source document the company is “Team Foundation Server (TFS). Manage & report chart of
account. They use provision for depreciation as monthly. This company benefited using AIS
because they find easily any transaction in the system.

The survey says the existing system is user friendly for the employees & management & not that
much friendly for the auditors. This software has emerged to accurately record all the transaction
in the manufacturing process.

Initially the company made a training session for all the employees of the relevant departments
& there have specially 10 employees whose are trained to use & monitor the software.

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The accounting information system strives to cut across different departments. Within the
system, the sales department can upload the sales budget. This information is used by the
inventory management team to conduct inventory and purchase materials. Upon the purchase of
inventory, the system can notify the accounts payable department of the new invoice. An
accounting information system can also share information about a new order so that the
manufacturing, shipping and customer service departments are aware of the sale.

An integral part of accounting information systems relates to internal controls. Policies and
procedures can be placed within the system to ensure that sensitive customer, vendor and
business information is maintained within a company. Through the use of physical access denial,
log in requirements, access logs, authorization and segregation of duties, users can be limited to
only the relevant information necessary to perform their business function.

Accounting information system makes the maintenance of a bloated financial department irrelevant. The
software does most of the work that would otherwise require several employees. The accounting software
can journal and prepare documents such as the trial balance. Journals and ledgers are recorded in the
computer data bases. There is also software that can perform functions such as billing budgeting and
preparing payroll. Accounting information systems help cuts the payroll for accounting staff substantially.

The benefits of accounting information systems are obviously immense. But there is also a downside such
as losing information if the system is attacked by computer viruses. Of courses anti-virus software has
improved, but no computer or computer system is 100 percent immune from virus attacks. The other
problem is power failure. When that occurs information could be lost if not properly saved. The
computerized information systems are also prone to fraud if there are no proper internal and external
controls.

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Implementation Process of AIS:
The steps to implement an accounting information system are as follows:

Detailed Requirements Analysis

Where all individuals involved in the system are interviewed. The current system is thoroughly
understood, including problems, and complete documentation of the system transactions, reports,
and questions that need to be answered are gathered. User needs that are not in the current
system are outlined and documented. Users include everyone, from top management to data
entry. The requirements analysis not only provides the developer with the specific needs, it also
helps users accept the change. Users who have the opportunity to ask questions and provide input
are much more confident and receptive of the change, than those who sit back and don't express
their concerns.

Systems Design (synthesis)

The analysis is thoroughly reviewed and a new system is created. The system that surrounds the
system is often the most important. What data needs to go into the system and how is this going
to be handled? What information needs to come out of the system how is it going to be
formatted? If we know what needs to come out, we know what we need to put into the system.
The program we select will need to appropriately handle the process. The system is built with
control files, sample master records, and the ability to perform processes on a test basis. The
system is designed to include appropriate internal controls and to provide management with the
information needed to make decisions. It is a goal of an accounting information system to
provide information that is relevant, meaningful, reliable, useful, and current. To achieve this,
the system is designed so that transactions are entered as they occur (either manually or
electronically) and information is immediately available online for management.

Once the system is designed, an RFP is created detailing the requirements and fundamental
design. Vendors are asked to respond to the proposal, to provide demonstrations of the product,
and to specifically respond to the needs of the organization. Ideally, the vendor will input control
files, sample master records, and be able to show how transactions are processed that result in the
information that management needs to make decisions. An RFP for the information technology
infrastructure follows the selection of the software product because the software product
generally has specific requirements for infrastructure. Sometimes, the software and the
infrastructure is selected from the same vendor. If not, the organization must ensure that vendors
will work together without "pointing fingers" when there is an issue with either the software or
the infrastructure.

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Documentation
As the system is being designed, it is documented. The documentation includes vendor
documentation of the system and, more importantly, the procedures or detailed instructions that
help users handle each process specific to the organization. Most documentation and procedures
are online and it is helpful if organizations can add to the help instructions provided by the
software vendor. Documentation and procedures tend to be an afterthought but is the insurance
policy and the tool used during testing and training—before launch. The documentation is tested
during the training so that when the system is launched, there is no question that it works and
that the users are confident with the change.

Testing
Before launch, all processes are tested from input through output, using the documentation as a
tool to ensure that all processes are thoroughly documented and that users can easily follow the
procedures: They know it works and that the procedures will be followed consistently. The
reports are reviewed and verified, so that there’s no garbage in-garbage out. This is done in a test
system not yet fully populated with live data. Unfortunately, most organizations launch systems
before thorough testing, adding to end-user frustration when processes don't work. The
documentation and procedures may be modified during this process. All identified transactions
must be tested during this step. All reports and online information must be verified and traced
through the audit trail so that management is ensured that transactions will be handled
consistently and that the information can be relied upon to make decisions.

Training
Before launch, all users need to be trained, with procedures. This means a trainer using the
procedures to show each end user how to handle a procedures. The procedures often need to be
updated during training as users describe their unique circumstances and the "design" is modified
with this additional information. The end user then performs the procedure with the trainer and
the documentation. The end user then performs the procedure with the documentation alone. The
end user is then on his or her own with the support, either in person or by phone, of the trainer or
other support person. This is before data conversion.

Data Conversion
Tools are developed to convert the data from the current system (which was documented in the
requirements analysis) to the new system. The data is mapped from one system to the other and
data files are created that will work with the tools that are developed. The conversion is
thoroughly tested and verified before final conversion. There’s a backup so it can be restarted, if
necessary.

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Launch
The system is implemented only after all of the above is completed. The entire organization is
aware of the launch date. Ideally, the current system is retained and often run in "parallel" until
the new system is in full operation and working properly. With the current mass-market software
used by thousands of companies and fundamentally proven to work, the "parallel" run that is
mandatory with software tailor-made to a company is generally not done. This is only true,
however, when the above process is followed, the system is thoroughly documented and tested,
and users are trained before launch.

Tools
Online resources are available to assist with strategic planning of accounting information
systems. Information systems and financial forms aid in determining the specific needs of each
organization, as well as assigning responsibility to principles involved.

Support
The end users and managers have ongoing support available at all times. System upgrades follow
a similar process and all users are thoroughly apprised of changes, upgraded in an efficient
manner, and trained.

Many organizations chose to limit the time and money spent on the analysis, design,
documentation, and training, and move right into software selection and implementation. If a
detailed requirements analysis is performed with adequate time being spent on the analysis, the
implementation and ongoing support will be minimal. Organizations that skip the steps to ensure
the system meets their needs are often left with frustrated end users, costly support, and
information that is not current or correct. Worse yet, these organizations build the system three
times instead of once.

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Conclusion
The recent year, the most organizations continue to increase spending on information system and
their budgets continue to rise. Moreover, economic conditions and competition create pressures
about costs of information. Generally, information system is developed using information
technology to aid an individual in performing their job. Therefore, the most organizations focus
on developing information system in order to decision support system, communication,
knowledge management, as well as many others. The key part of information system needed for
decision making in organization is accounting information system.

The End

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