Which of the following is a factor that shapes an accounting information system?

• A. The personal preferences of external auditors
• B. The number of employees' vacation days
• C. The size and nature of the business
• D. The color of the company's logo

Answer: (C)

Verified step by step guidance

1. Understand the purpose of an accounting information system (AIS): An AIS is designed to collect, store, and process financial and accounting data to produce useful information for decision-making. It must align with the specific needs of the business.
2. Identify the factors that influence the design of an AIS: These factors typically include the size of the business, the complexity of its operations, the industry it operates in, and the regulatory requirements it must comply with.
3. Evaluate the options provided in the question: Consider whether each option logically impacts the design or functionality of an AIS. For example, external auditors' personal preferences or the company's logo color are not relevant to the system's design.
4. Focus on the size and nature of the business: Larger businesses with complex operations require more sophisticated AIS systems, while smaller businesses may need simpler systems. The nature of the business (e.g., manufacturing, retail, or service) also determines the specific features and reports needed.
5. Conclude that the correct answer is 'The size and nature of the business,' as it directly shapes the requirements and structure of an AIS.