Accounting Information System

Question 1
Comparing the small firm and the large firm in this case, they will have
some differences in terms of Information Systems, IT department
structure, and internal controls. In terms of the Information Systems,
the small firm can use PC systems while the large firm is likely to use
client-server and mainframe systems (Hall, 2013) this emanates from the
volume of business processes required by the two firms. In terms of IT
department structure, the small firm can choose a monolithic system
since it can carry out all its operations under a single supervision
however, for the case of the large firm, it requires subdivision of its
operations such as the projects department, planning department and the
operations department. This implies that the IT department structure
preferred for the large firm will be microkernel. On the other hand, in
terms of internal controls, the internal control used in the small firm
will be the same used in the large firm however, the large firm will
require a more intensive demanding internal control due to the number of
employees involved and its processes.
Question 2
It is not a must that every business activity will result in an
accounting transaction this is because not all activities would result
in a double entry or affect the financial accounts. Examples of such
transactions include signing a transport contract with Blue & Gold
Fleet, adding CalTech as a new supplier and changing the address of the
business (Hall, 2013). Managers and investors would be interested in
such activities because they affect the well-being of a business for
example, changing a business address may help in reaching more
investors, which increases the role of the manager. Besides, managers
and investors have to understand every detail of the business they are
dealing with hence, it will be of importance knowing these activities.
Hall, J. A. (2013). Accounting information systems. Mason, OH:
South-Western Cengage Learning.

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