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 informationFour categories of information operating information financial accounting information management accounting information tax accounting information
INFORMATIONNon-quantitative information Quantitative information Accounting Non accounting information information Operating Financial accounting Management Tax accounting information accounting
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
PLANNING actions should be taken care in the future.is the process of deciding what 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 otherPlanning 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 Appropriate action Feedback Plan revision
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 Confidentiality Integrity Availability Compliance Reliability of information
Elements in the Study of AISDull, Gelinas and Wheeler, Accounting Information System 2nd Edition, Page 31
Sarbanes-Oxley Act of 2002Section 404 – Management must identify, document, and evaluate significant internal controls Auditors must report on management’s assertions regarding internal controlsSection 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 23
Accounting Systems andSubsystems 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. 24
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. 25
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. 27
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. 28
Strategic Management Tactical Management Operations Management Operations and Transaction ProcessingHorizontal information flows 30
Accountant’s Role Designer—application of accounting principles, auditing, information systems, and systems development User—participate in design Auditor—provide audit and assurance services 31
2012 Top Technology Priorities http://www.aicpa.org/INTERESTAREAS/INFOR MATIONTECHNOLOGY/RESOURCES/TOPTEC HNOLOGYINITIATIVES/Pages/2012TTI.aspx
2012 Top Technology Priorities1. 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
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.comThank you!
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