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Introduction to
Accounting
Information
Systems
Learning Objectives
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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 understand decision making
Recognize how information is used
a various organizational levels
Recognize how information
supports management functions
Appreciate the influence of strategic
planning on success
Understand the importance of the IS
strategic plan
To recognize the accountant’s role
in relation to the current
environment for AIS.
To understand how to use this
textbook effectively to learn AIS.
Introduction
to Accounting
Information
Systems
The AIS Wheel
• Introduces each
chapter; topics are
listed on spokes,
hub and perimeter
of wheel
3
Textbook Themes
1.
2.
3.
Enterprise systems— integrate the business
process functionality and information from all of an
organization’s functional areas, such as marketing
and sales, cash receipts, purchasing, cash
disbursements, human resources, production and
logistics, and business reporting (including financial
reporting).
E-Business—use of networks to undertake
business processes
Internal control— a system of integrated elements
that provide reasonable assurance that a business
will reach its business process goals
4
Elements in the Study of AIS
5
Accounting
System
and Subsystems
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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, which we have
named System 1.0.
7
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.
• The Figure on the next slide depicts the
functional components of an information system.
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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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Comparison of Manual and
Automated Systems
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Components of Business Process
1. Management hires
personnel and
establishes the
means for
accomplishing
the work of the
organization.
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Components of Business Process
2. Management
establishes broad
marketing objectives
and assigns sales
quotas to measure
progress toward the
long-run objectives.
Management also
designs the IS
procedures for
facilitating
operations, such as
the procedures used
to pick and ship
goods to the
customer.
13
Components of Business Process
3. The IS receives
the customer’s
purchase order.
14
Components of Business Process
4. The IS
acknowledges the
customer’s purchase
order (send order
acknowledgement).
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Components of Business Process
5. The IS sends a
request to ship
goods to warehouse.
This request
identifies the goods
and their location in
the warehouse.
16
Components of Business Process
6. A document (i.e., a
packing slip)
identifying the
customer and the
goods is attached to
the goods.
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Components of Business Process
7. Goods are
shipped to customer.
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Components of Business Process
8. The shipping
department reports
to the IS that the
goods have been
shipped.
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Components of Business Process
9. The IS prepares
an invoice and sends
it to the customer.
20
Components of Business Process
10. The IS sends
management a
report comparing
actual sales to
previously
established sales
quotas.
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Information Qualities
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Management Decision Making
1. 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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Strategic
Management
Tactical
Management
Operations
Management
Operations and
Transaction Processing
Horizontal information flows
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Management Problem Structure
and Information Requirements
• Horizontal flows relate to specific business
events, such as one shipment, or to individual
inventory items.
– the information moves through operational units such
as sales, the warehouse, and accounting.
• Vertical Flows relate to the flow of information to
and from strategic management through tactical
management, operations management, and
operations and transaction processing
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Management Problem Structure and
Information Requirements
• Higher up the pyramid, the less structured the decision
–
–
–
–
–
–
Less defined
External orientation
More summarized information
Future oriented
Less frequent
Less accurate
• Lower down the pyramid, the more structured the decision
–
–
–
–
–
–
More defined
Internal orientation
More detailed information
Historical
More frequent
More accurate
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The strategic planning process
addresses such questions as:
1. What business are we in and who are our
customers?
2. What knowledge advantage do we have in
our business?
3. How should our products be perceived?
4. What rate of return on assets, earnings, or
cash flow are we trying to achieve?
5. What are our social responsibilities?
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Strategic Planning Process
1. Assess
environment for
opportunities or
threats.
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Strategic Planning Process
2. Assess the
organization’s
strength’s and
weaknesses and
develop
objectives that
match the
strengths and
weaknesses with
opportunities in
environment.
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Strategic Planning Process
3. Derive the
factors that are
central to the
accomplishment
of the objectives
and to the
survival of the
organization—the
critical success
factors.
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Strategic Planning Process
4. Develop
corporate
strategy: A
strategy is the
means
(organizational
structure and
processes) by
which an
organization has
chosen to
achieve its
objectives and
critical success
factors.
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Strategic Planning Process
5. Identify the
performance
indicators that
will demonstrate
achievement of
the organization’s
strategies and
critical success
factors.
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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
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