Importance of Databases to Accounting Information Systems

Please prepare a response to the following:
(1) In your opinion, why are databases important for accounting information systems? Describe some concerns, and explain why each one is important.
Databases are important to accounting information systems because they essentially are what makes up the system. In the accounting field we are working with very large amounts of data which needs to be stored properly so that it can be reliably looked back at if necessary. If the quality of the database is low, it basically renders the Accounting Information system useless since it would be working with incorrect data. A functioning database is extremely important for any firm to have, as the first step to doing any complex analysis of data is having the data in a well-designed database. A primary concern for a database should be security. Much of the data used in the accounting industry deals with peoples’ personal data and financial records. This information needs to be kept secure and there could be a major lawsuit against any company that does not store this data properly. Another concern about a database could just be its design. If its design is not interface-friendly, issues with handling and retrieving the data could arise.
(2) Compare and contrast database management systems with databases. Give some examples.
According to the textbook, a Database Management System is a separate software system that enables users to utilize database information more efficiently. This basically just means that a database management system is a tool used to manipulate the actual data in a data set. The tax software I worked with at my internship this past winter has a good example of this. For certain passthrough entities for tax that had numbers allocated to each partner or member, we would often use an excel template that would reflect the allocation information, then would import that excel file into the tax software to allocate the amounts correctly on the return. It is a pretty low-level example, but I thought it was a very simple one. The excel file acts as the database holding the information, and the tax software (acting as a database management system) was able to actually utilize that information and extract it for something useful. A database in and of itself is pretty worthless since it is just information sitting there, but with a database management system it can be turned into something that is functional.