Chapter 3. THE ACCOUNTING INFORMATION SYSTEM

LEARNING OBJECTIVES

After studying this chapter, you should be able to:

  • THE ACCOUNTING INFORMATION SYSTEM
  • THE ACCOUNTING INFORMATION SYSTEM
  • THE ACCOUNTING INFORMATION SYSTEM
  • THE ACCOUNTING INFORMATION SYSTEM
  • THE ACCOUNTING INFORMATION SYSTEM
  • THE ACCOUNTING INFORMATION SYSTEM
  • THE ACCOUNTING INFORMATION SYSTEM

Needed: A Reliable Information System

Maintaining a set of accounting records is not optional. The Internal Revenue Service (IRS) requires that businesses prepare and retain a set of records and documents that can be audited. The Foreign Corrupt Practices Act (federal legislation) requires public companies to "... make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets...." But beyond these two reasons, a company that fails to keep an accurate record of its business transactions may lose revenue and is more likely to operate inefficiently.

Consider, for example, the Long Island Railroad (LIRR) ...

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