Functions of Accounting | Role
of Accountants | Accounting Process |
Problems with traditional view |
File-Oriented Systems | Database
These notes are prepared
exclusively for the benefit of the students in the Department of Accounting &
Law at the State University of New York at Albany. They are not to be
used by others
without the permission of J.
- Traditional Views:
- Record, Classify, Summarise & Interpret data affecting the
- Provide information useful for decision making
- Contemporary View:
- A system for capturing and storing an organization's data in one integrated
- which events to capture data about,
- what data relating to each event should be captured,
- how that data is to be captured while preventing input errors,
- how the data should be stored to optimize its usability while maintaining
- how meaningful reports can be generated on demand in real-time.
- "transactions" orientation as opposed to an "events"
Events are very important. In fact, most interaction of users with the
accounting system is via events.
- narrow focus on financial data,
Non-financial information is crucial for decision-making. Accounting
system needs to be integrated with the overall information system of the
- reporting is periodic and not real-time,
Often, managers and other users need accounting information in real-time
- limited accessibility of information,
Accessibility to accounting information should be on "need-to-know"
- too high a level of aggregation,
information should be provided at levels of aggregation appropriate to
- limited flexibility which prevents answering queries that cross functional
- adaptable to changes in operations
- adaptable to changes in technology
- Each application owns its own data -- duplication/redundancies in
- Lack of uniformity of meaning of data -- not possible for accounting
applications to share data.
- Difficult to enforce uniform standards ---lack of integrity of data.
- Difficulties in accessing data -- need to know programs to access data.
Advantages of the database approach:
- supports the capturing of financial and non-financial data
- support for real-time rather than periodic reporting
- better controlled accessibility of data
- storage of data in the most disaggregated form
- Uniformity of meaning of data -- supported by a rigorous data model
- Enforcement of access controls easier
Updated on September 7, 1997 by Jagdish S. Gangolly.