BY: Hetal Pachchigar
Definition: Information storage is the part of the accounting system that keeps data accessible to the information processors. In other words, an accounting system’s information storage unit is either a hard drive or server that usually contains a database.
What does Information Storage means?
Information is increasingly important in our daily lives. We have become information-dependent in the 21st century, living in an on-command, on-demand world, which means, we need information when and where it is required. We access the Internet every day to perform searches, participate in social networking, send and receive e-mails, share pictures and videos, and use scores of other applications.
Equipped with a growing number of content-generating devices, more information is created by individuals than by organizations (including business, governments, non-profits and so on). Information created by individuals gains value when shared with others. When created, information resides locally on devices, such as cell phones, smartphones, tablets, cameras, and laptops. To be shared, this information needs to be uploaded to central data repositories (data centers) via networks. Although the majority of information is created by individuals, it is stored and managed by a relatively small number of organizations.
After the input devices enter data into an accounting system, the information processors take the raw data a convert it into a usable form. This information is then stored, often in the form of a database, on the information storage component of the accounting system.
Example of Information Storage
These databases must be accessible frequently, so managers, accountants, and auditors can retrieve the information and analyze the financial state of the company. Most businesses that keep electronic database storage systems also keep physical sources documents in their file cabinets.
There has been a push in the modern accounting world to get rid of paper documents altogether. Most CPA firms now are mostly paperless if not completely paperless. They rely 100 percent on electronic information storage systems to keep the records of their clients and supporting work papers for engagements.
Importance of Information Storage
· Regulatory Compliance
Comments