33926373 Accounting Information System Chapter 1

7/28/2019 33926373 Accounting Information System Chapter 1

http://slidepdf.com/reader/full/33926373-accounting-information-system-chapter-1 1/28

Accounting Information Systems, 6th edition James A. Hall

COPYRIGHT © 2009 South-Western, a division of Cengage Learning. Cengage Learning and South-Westernare trademarks used herein under license



Objectives for Chapter 1y Pr ima ry info rmation flows within the business

environmenty

Accounting info rmation s y stems and managementinfo rmation s y stemsy The gene ral model fo r info rmation s y stemsy Financial t ransactions f rom non-financial t ransactionsy

The functional a reas of a businessy Three roles of accountants in an info rmation s y stem



Internal & ExternalInformation Flows



In formatio n Requireme n tsy Each use r group has unique info rmation requi rements.y The highe r the level of the o rganization, the g reate r

the need fo r mo re aggregated info rmation and lessneed fo r detail.



In formatio n in Busin essy Information is a bus in e ss r e s ou rc e

that :y needs to be app ropriatel y managedy is vital to the su r vival of

contempo rary businesses



W hat is a System?y A group of inte rr elated multiple components o r

subs y stems that se r ve a common pu rposey S y stem o r subs y stem?

y A system is called a subs y stem when it is viewed as acomponent of a la rger s y stem.

y A subsystem is conside red a s y stem when it is the focusof attention.



System Decompositio n versusSystem In terdepe n de n cyy S ystem Decomposition

y

the p rocess of dividing the s y stem into smalle r subs y stem pa rtsy S ystem Interdependency

y distinct pa rts a re not self-containedy the y are reliant upon the functioning of the othe r parts

of the s y stemy all distinct pa rts must be functioning o r the s y stem will

fail



W hat is a n In formatio n System?

An info rmation s y stem is the set of formal p rocedu res b y which data a recollected, p rocessed into info rmation,

and dist ributed to use rs.



Tra n sactio n s

y A transaction is a business event .y Financial transactions

y economic events that affect the assets and equities of the o rganization

y e.g., pu rchase of an ai rline tickety Nonfinancial transactions

y all other events p rocessed b y the o rganizationǯs

info rmation s y stemy e.g., an ai rline reser vation Ȅ no commitment b y the

custome r



Tra n sactio n sFinancial

Transactions

Nonfinancial

Transactions

InformationSystem

User DecisionMakingInformation



W hat is Accou n ting In formatio n Systems?

y Accounting is an info rmation s y stem.y

It identifies, collects, p rocesses, andcommunicates economic info rmation abouta firm using a wide va riet y of technologies.

y It captu res and records the financial effectsof the fi rmǯs transactions.

y It dist ributes t ransaction info rmation toope rations pe rsonnel to coo rdinate man y ke y tasks.



AIS versus M ISy A ccounting Information S ystems ( A IS) process

y financial t ransactions; e.g., sale of goodsy

and nonfinancial t ransactions that di rectl y affect theprocessing of financial t ransactions; e.g., addition of newl y app roved vendo rs

y Management Information S ystems (MI S)process

y nonfinancial t ransactions that a re not no rmall y processed b y traditional A IS; e.g., tracking custome r complaints



AIS Subsystemsy Transaction processing system ( TPS)

y suppo rts dail y business ope rationsy G eneral Ledger/ Financial Reporting S ystem

(G L/FR S)y produces financial statements and repo rts

y Management Reporting S ystem ( MR S)y produces special-pu rpose repo rts for inte rnal use



The General AIS Model



Data Sourcesy Data sources are financial t ransactions that ente r

the info rmation s y stem f rom inte rnal and exte rnalsou rces.

y Ex ternal financial transactions are the most commonsou rce of data fo r most o rganizations.y E.g., sale of goods and se r vices, pu rchase of invento ry , receipt of

cash, and disbu rsement of cash (including pa yroll).y

Internal financial transactions involve the exchange o r movement of resou rces within the o rganization.y E.g., movement of raw mate rials into wo rk-in-p rocess (WI P),

application of labo r and ove rhead to WIP, transfer of WIP intofinished goods invento ry , and dep reciation of equipment.



Tra n sformi ng the Data i n toIn formatio n

Functions fo r transfo rming data into info rmation

acco rding to the gene ral A IS model:1. Data Collection2. Data Processing3. Data Management4. Information Gene ration



1. Data Collectio n

y Captu ring t ransaction datay Recording data onto fo rmsy Validating and editing the data



2 . Data Processi ng

y Classif y ingy Transc ribingy Sortingy Batching

MergingCalculatingSummarizingComparing



3 . Data Ma n ageme n ty Storingy Retrievingy Deleting



4 . In formatio n Ge n eratio ny Compilingy A rr angingy Formattingy Presenting



Characteristics of Useful In formatio ny Regardless of ph y sical form o r technolog y , useful

information has the following cha racte ristics:y R e l ev anc e : ser ves a pu rposey T im e lin e ss: no olde r than the time pe riod of the action

it suppo rtsy A ccu racy : f ree f rom mate rial errorsy C ompl e t e n e ss: all info rmation essential to a decision o r task is p resenty S u mmarization : aggregated in acco rdance with the

use rǯs needs



In formatio n System Objectives i n aBusi n ess Co n text

y

The goal of an info rmation s y stem is tosuppo rty the stewa rdship function of managementy

management decision makingy the fi rmǯs da y -to-da y ope rations



Fun ctio n al Areasy Invento ry/ Mate rials Management

y pu rchasing, receiving and sto resy Production

y production planning, qualit y cont rol, andmaintenance

y Marketingy Dist ributiony Personnely Financey Accountingy Compute r Ser vices



Ma n ual Process Modely Transaction p rocessing, info rmation p rocessing, and

accounting a re ph y sicall y performed b y people, usuall y using pape r documents.

y Useful to stud y because:y helps link A IS courses to othe r accounting cou rsesy often easie r to unde rstand business p rocesses when not

shrouded in technolog y y facilitates unde rstanding inte rnal cont rols



Accou n ta n ts as In formatio n System Usersy Accountants must be able to clea rl y conve y thei r needs

to the s y stems p rofessionals who design the s y stem.y The accountant should activel y participate

in s y stems development p rojects to ensu reapp ropriate s y stems design.



Accou n ta n ts as System Desi gn ersy The accounting function is responsible fo r the

conceptual system , while the compute r function isresponsible fo r the ph y sical s y stem.y The conceptual system dete rmines the natu re of the

information requi red, its sou rces, its destination, and

the accounting rules that must be applied.



Accou n ta n ts as System Auditorsy External Audito rs

y attest to fai rness of financial statementsy assu rance se r vice: broade r in scope than

traditional attestation audity IT Audito rs

y evaluate IT, often as pa rt of exte rnal audity Inte rnal Audito rs

y in-house IS and IT app raisal se r vices

33926373 Accounting Information System Chapter 1

Documents

Transcript of 33926373 Accounting Information System Chapter 1