aisch01

1 – 1 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

Accounting Accounting InformationInformationSystems: An Systems: An

OverviewOverviewChapter 1Chapter 1


Learning Objective 1Learning Objective 1

Understand the related conceptsUnderstand the related concepts

of transaction cycles andof transaction cycles and

internal control structure.internal control structure.


OverviewOverview

An An accounting information systemaccounting information system (AIS) (AIS)is a collection of resources designed tois a collection of resources designed to

transform data into information.transform data into information.

Accounting information systemsAccounting information systemsperform this transformation.perform this transformation.

ManualManual

ComputerizedComputerized


Information and DecisionsInformation and Decisions

Who are the two main usersWho are the two main usersof accounting information?of accounting information?

External usersExternal users

Internal usersInternal users



Who are the external usersWho are the external usersof accounting information?of accounting information?

StockholdersStockholders

InvestorsInvestors

CreditorsCreditors

Government agenciesGovernment agencies

Customers and vendorsCustomers and vendors



StrategicStrategic

TacticalTactical

OperationalOperational

Transaction orientedTransaction oriented

Lower-LevelLower-LevelManagementManagement

MiddleMiddleManagementManagement

Top-LevelTop-LevelManagementManagement

SummarizationSummarizationand Filtrationand Filtration

Hierarchy of Internal UsersHierarchy of Internal Users


Information SystemsInformation Systems

The term The term information systeminformation system suggests the use suggests the useof computer technology in an organization.of computer technology in an organization.

HardwareHardware

SoftwareSoftware

DataData InformationInformation


Information SystemsInformation Systems

Electronic Data Processing System (EDP)Electronic Data Processing System (EDP)

Data Processing System (DP)Data Processing System (DP)

Management Information System (MIS)Management Information System (MIS)

Decision Support System (DSS)Decision Support System (DSS)

Expert System (ES)Expert System (ES)

Executive Information System (EIS)Executive Information System (EIS)

Accounting Information System (AIS)Accounting Information System (AIS)


Business ProcessesBusiness Processes

DataDataOrganizationalOrganizational

unitsunitsLogical timeLogical time

sequencesequence



InboundInbound salessales

logisticslogistics

OutboundOutbound salessales

logisticslogistics OperationsOperations

MarketingMarketing ServiceService

Primary Business ProcessesPrimary Business Processes



ProcurementProcurement TechnologyTechnologydevelopmentdevelopment

HumanHumanresourcesresources

FirmFirminfrastructureinfrastructure

Supporting Business ProcessesSupporting Business Processes


Transaction Processing CyclesTransaction Processing Cycles

1. Revenue cycle1. Revenue cycle

2. Expenditure cycle2. Expenditure cycle

3. Production cycle3. Production cycle

4. Finance cycle4. Finance cycle


Internal Control ProcessInternal Control Process

Reliability of financial reportingReliability of financial reporting

Effectiveness and efficiencyEffectiveness and efficiency

ComplianceCompliance



What are the elements of internal control?What are the elements of internal control?

Control environmentControl environment

Risk assessmentRisk assessment

Control activitiesControl activities

Information and communicationInformation and communication

MonitoringMonitoring



Segregation of Duties:Segregation of Duties:

No individual or department shouldNo individual or department shouldcontrol the accounting recordscontrol the accounting recordsrelating to its own operation.relating to its own operation.

Internal Auditing:Internal Auditing:

It is an independent appraisalIt is an independent appraisalactivity within the organization.activity within the organization.



Describe the organizationalDescribe the organizational

structure of the informationstructure of the information

system function in organizations.system function in organizations.


The Information System The Information System FunctionFunction

ChiefChiefInformationInformation

OfficerOfficer

ManagerManagerSystemsSystemsAnalysisAnalysis

ManagerManagerProgrammingProgramming

ManagerManagerOperationsOperations

ManagerManagerTechnicalTechnicalSupportSupport

ManagerManagerUserUser

SupportSupport

SteeringSteeringCommitteeCommittee



ManagerManagerProgrammingProgramming

ManagerManagerSystemsSystemsAnalysisAnalysis

ApplicationApplicationAnalystsAnalysts

ApplicationApplicationProgrammersProgrammers



ManagerManagerOperationsOperations

MaintenanceMaintenanceProgrammersProgrammers

ComputerComputerOperatorsOperators

DataDataEntryEntry

OperatorsOperators

FileFileLibrarianLibrarian



ManagerManagerTechnicalTechnicalSupportSupport

DatabaseDatabaseAdministrationAdministration

CommunicationCommunicationAnalystsAnalysts

SystemsSystemsProgrammersProgrammers



Project organizationsProject organizations

Application projectsApplication projects

AnalystsAnalysts ProgrammersProgrammers



Discuss applications ofDiscuss applications of

information technologyinformation technology

in organizations.in organizations.


End-User ComputingEnd-User Computing

End-user computing (EUC) is theEnd-user computing (EUC) is thehands-on use of computers by end users.hands-on use of computers by end users.

Functional end users do their ownFunctional end users do their owninformation processing activities.information processing activities.


EUC: Mainframe ApplicationEUC: Mainframe Application

User SubmitsUser SubmitsQuery LanguageQuery Language

JobJob

User SubmitsUser SubmitsQuery LanguageQuery Language

JobJob

User ReportUser ReportUser ReportUser Report

DatabaseDatabaseAccounts ReceivableAccounts Receivable

DataData

DatabaseDatabaseAccounts ReceivableAccounts Receivable

DataData

Query LanguageQuery LanguageProcessorProcessor

Query LanguageQuery LanguageProcessorProcessor

DatabaseDatabaseAccess ControlAccess Control

SoftwareSoftware

DatabaseDatabaseAccess ControlAccess Control

SoftwareSoftware


Traditional ApproachTraditional Approach

UserUser Information SystemInformation SystemSpecialistsSpecialists

Data Processing for the End Data Processing for the End UserUser

DataDataProcessingProcessing


End-User Computing ApproachEnd-User Computing Approach

UserUser Database Software orDatabase Software orPersonal ComputerPersonal Computer

Data Processing for the End Data Processing for the End UserUser

DataDataProcessingProcessing


EUC: Stand-Alone PC EUC: Stand-Alone PC ApplicationApplication

Mainframe DataMainframe Dataor Reportor Report

User PreparedUser PreparedDataData

PersonalPersonalComputerComputer

ReportReport


Quick-Response TechnologyQuick-Response Technology

Quick-response systems are essentialQuick-response systems are essentialto the total quality performanceto the total quality performance(TQP) movement in business.(TQP) movement in business.

TQP is also called TQM orTQP is also called TQM ortotal quality management.total quality management.

TQP emphasizes customer satisfaction.TQP emphasizes customer satisfaction.



Hardware and software standardizationHardware and software standardization

Electronic data interchange (EDI)Electronic data interchange (EDI)

Universal product code (UPC) barUniversal product code (UPC) barcode identification of productscode identification of products

and scanning technologiesand scanning technologies



Retail SaleRetail Saleof Productof ProductRetail SaleRetail Saleof Productof Product

Scan BarScan BarCodeCode

Scan BarScan BarCodeCode

Retailer’s Computer SystemRetailer’s Computer System

Electronic DataElectronic DataInterchangeInterchange

Electronic DataElectronic DataInterchangeInterchange

Vendor’s Computer SystemVendor’s Computer SystemShip OrderShip OrderShip OrderShip Order


Web CommerceWeb Commerce

Sales via the World Wide Web areSales via the World Wide Web arean integral part of the economy.an integral part of the economy.

What are some benefits?What are some benefits?

ConsumersConsumers No waiting in lineNo waiting in line

MerchantsMerchants Cost savingsCost savings


Electronic Data InterchangeElectronic Data Interchange

RetailerRetailer SupplierSupplier

Purchase OrderPurchase Order

SavesSaves timetime

EliminatesEliminates paperpaper


Extensible BusinessExtensible BusinessReporting LanguageReporting Language

XBRL is a language that facilitates theXBRL is a language that facilitates theexchange over the Internet of all kinds ofexchange over the Internet of all kinds of

business documents and financial statements.business documents and financial statements.


Computer-Integrated Computer-Integrated ManufacturingManufacturing

What are the components of a CIM system?What are the components of a CIM system?

Computer-aided design (CAD) workstationsComputer-aided design (CAD) workstations

Real-time production monitoringReal-time production monitoringand control systemsand control systems

Order and inventory control systemOrder and inventory control system


Electronic Payment Systems Electronic Payment Systems (EFT)(EFT)

Electronic funds transfer systems areElectronic funds transfer systems areelectronic payment systems in whichelectronic payment systems in whichprocessing and communication areprocessing and communication are

primarily or totally electronic.primarily or totally electronic.

Banks can interface withBanks can interface withcorporate EDI applications.corporate EDI applications.



Characterize the developmentCharacterize the development

of information systems.of information systems.


The Accountant andThe Accountant andSystems DevelopmentSystems Development

Accountants may undertake systemsAccountants may undertake systemsdevelopment activities eitherdevelopment activities either

internally or externally.internally or externally.

Systems development activities areSystems development activities areoften encountered by internal andoften encountered by internal andexternal auditors during reviewsexternal auditors during reviewsof information systems controls.of information systems controls.



Systems analysisSystems analysis

Systems designSystems design

Systems implementationSystems implementation



What are the general objectivesWhat are the general objectivesof systems analysis?of systems analysis?

To improve the quality of informationTo improve the quality of information

To improve internal controlTo improve internal control

To minimize cost, where appropriateTo minimize cost, where appropriate



Systems design is the process ofSystems design is the process ofspecifying the details of the solutionspecifying the details of the solution

selected by the systems analysis process.selected by the systems analysis process.



Systems implementation is the process ofSystems implementation is the process ofplacing the revised or newly designedplacing the revised or newly designed

procedures and methods into operations.procedures and methods into operations.

Testing the solution prior to implementationTesting the solution prior to implementation

Documenting the solutionDocumenting the solution

Reviewing the systemReviewing the system


Systems ApproachSystems Approach

What is the systems approach?What is the systems approach?

It is a general procedure for theIt is a general procedure for theadministration of a systems project. administration of a systems project.

Its purpose is to assist in the orderlyIts purpose is to assist in the orderlydevelopment of effective systems.development of effective systems.

What are the six steps of theWhat are the six steps of thesystems approach process?systems approach process?


Systems ApproachSystems Approach

Statement of system objective(s)Statement of system objective(s)11

Creation of alternativesCreation of alternatives22

Systems analysisSystems analysis33

Systems designSystems design44

Systems implementationSystems implementation55

Systems evaluationSystems evaluation66


Behavioral ConsiderationsBehavioral Considerations

A new information systemA new information systemcreates new work relationshipscreates new work relationships

among existing personnel.among existing personnel.

It creates changes in job contentIt creates changes in job contentand perhaps a change in theand perhaps a change in the

formal organizational structure.formal organizational structure.


Behavioral ConsiderationsBehavioral Considerations

The user cooperation needed to operateThe user cooperation needed to operatethe system successfully should be ensuredthe system successfully should be ensured

during the design of a system, not afterward.during the design of a system, not afterward.

A philosophy of A philosophy of user-orienteduser-oriented design fosters design fostersa set of attitudes and an approach to systemsa set of attitudes and an approach to systems

development that consciously considersdevelopment that consciously considersthe organizational context.the organizational context.


End of Chapter End of Chapter 11

aisch01

Documents