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Relationship between these aspects is set out in Figure.
Figure: The accounting information system
There are four sequential stages of an accounting information system. First two stages are concerned with preparation while the last two stages are concerned with using information collected.
We shall concern primarily with the final two elements of the process: analysis and reporting of accounting information. We will consider the way in which information is used by, and is useful to, users instead of the way in which it's identified and recorded. Efficient accounting systems are a vital ingredient of an efficient business. When accounting systems fail, results can be disastrous.
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