ais lecture 1
TRANSCRIPT
The 1st 15 slides was discussed in Sysdev
Accounting Information Systems
“Inaccurate accounting records often contribute to business failures. Failure to understand accounting information can result to
poor business decision.” -G.V.Lising Jr.
Information System
Information Non-quantitative Information Quantitative Information
Non-accounting Information Accounting Information
Operating Information Financial Accounting Management Accounting Tax Accounting
The need for information
quantitative – is information that is expressed in numbers
non quantitative – samples are visual impressions, conversations, television progs etc
accounting is primarily concerned with QUANTITATIVE INFO
Accounting is one of the several types of quantitative information
Four categories of information operating information financial accounting information management accounting information tax accounting information
INFORMATION
Non-quantitative information Quantitative information
Accounting information
Operating information
Financial accounting
Management accounting
Tax accounting
Non accounting information
OPERATING INFORMATION constitutes by far the largest quantity of accounting information.
FINANCIAL ACCOUNTING INFORMATION is intended for both managers and also for the use of parties external to the organization, including shareholders (and trustees) in profit organizations), banks, and other creditors, government agencies, investment advisers, and the general public.
MANAGEMENT ACCOUNTING INFORMATION – accounting information specifically prepared to aid managers. This information is used in three management functions
planning implementation control
PLANNINGis the process of deciding what actions should be taken care in the
future.
An important form of planning is BUDGETING – the process of planning overall activities of the organization for a specified period of time, usually a year. A primary objective of budgeting is to coordinate the separate plans made for various segments of the organization so as to ensure that these plans harmonize with each other
Planning involves making DECISIONS recognizing the problem specifying and ranking the criteria to be used to determine the
best solutions identifying alternative ways of addressing the problem or
opportunity analyzing the consequences of each alternative comparing these cosequences
IMPLEMENTATION – making plans does not itself ensure that managers will implement the plans. Each manager also must make more detailed implementation plans to encompassed in the budget
CONTROL – manage / perform properly
Accounting information is used in the control process
as means of communication motivation attention getting appraisal
System
Set of detailed methods, procedures, and routines established or formulated to carry out a specific activity, perform a duty, or solve a problem. –BusinessDictionary.com
Elements of System
Inputs and outputs Processor Control Environment Feedback Boundaries/interface
Planning Implementation Control
Plan revision
Appropriate actionFeedback
Objectives
To appreciate the complex, dynamic environment in which accounting is practiced.
To know the AIS, its relationship to the organizations business processes
To know the attributes of information To recognize how information is used for
different types of decisions and at various levels in the organization
To recognize how the information system supports the management function
To recognize the accountant’s role in relation to the current environment for AIS
Key Terms
System Subsystem Information system (IS) Management information system
(MIS) Accounting information system (AIS) Operations Process Management process
Key Terms
Information Data Understandability Relevance Timeliness Predictive value Feedback value
Key Terms
Verifiability Neutrality Freedom from bias Comparability Consistent Validity Accuracy Completeness
Key Terms
Decision making Structured decisions Unstructured decisions Enterprise database Effectiveness Efficiency
Key Terms
Confidentiality Integrity Availability Compliance Reliability of information
Elements in the Study of AIS
Dull, Gelinas and Wheeler, Accounting Information System 2nd Edition, Page 31
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Sarbanes-Oxley Act of 2002Section 404 –
Management must identify, document, and evaluate significant internal controls
Auditors must report on management’s assertions regarding internal controls
Section 409 – Requires disclosure to the public on a
“rapid and current” basis of material changes in an organization’s financial condition.
Implications for both public and private accountants
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Accounting Systems and Subsystems A system is a set of interdependent
elements that together accomplish specific objectives.
A subsystem is the interrelated parts that have come together, or integrated, as a single system.
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Information System Model
An information system (IS) (or management information system [MIS]) is a manmade system that generally consists of an integrated set of computer-based and manual components established to collect, store, and manage data and to provide output information to users.
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Information System Model
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Purpose of AIS
Collect, process and report information related to the financial aspects of business events
Often integrated and indistinguishable from overall information system
Like the IS, the AIS may be divided into components based on the operational functions supported.
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Management Decision Making1. Intelligence: Searching the
environment for conditions calling for a decision.
2. Design: Inventing, developing, and analyzing possible courses of action.
3. Choice: Selecting a course of action.
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Management Decision Making
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Horizontal information flows
Verti
cal in
formati
on flo
ws
StrategicManagement
TacticalManagementOperations
Management
Operations andTransaction Processing
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Accountant’s Role
Designer—application of accounting principles, auditing, information systems, and systems development
User—participate in design Auditor—provide audit and
assurance services
2012 Top Technology Priorities http://www.aicpa.org/INTERESTAREAS/I
NFORMATIONTECHNOLOGY/RESOURCES/TOPTECHNOLOGYINITIATIVES/Pages/2012TTI.aspx
1. Securing the IT environment2. Managing and retaining data3. Managing risk and compliance4. Ensuring privacy5. Leveraging emerging technologies6. Managing system implementation7. Enabling decision support and managing
performance8. Governing and managing IT
investment/spending9. Preventing and responding to fraud10.Managing vendors and service providers
2012 Top Technology Priorities
YOU
Catalyst of change and improvement Enabler Decision maker
Acknowledgement and Sources: Fundamentals of Accounting by Agamata &
Berbano Accounting: Text and Cases by Robert N.
Anthony Accounting Principles by Kieso and Weygant Basic Accounting by G.V.Lising Jr BDO International Deloitte (www.iasplus.com) Wikipedia (http://en.wikipedia.org) BusinessDictionary.com
Thank you!