AIS Lecture 1


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  • Pages 2-6
  • AIS Lecture 1

    1. 1. Accounting InformationSystems
    2. 2. “Inaccurate accounting records often contribute to businessfailures. Failure to understand accounting information can result to poor business decision.” - G.V.Lising Jr.
    3. 3.  Information System
    4. 4. Information Non-quantitative Information Quantitative Information  Non-accounting Information  Accounting Information  Operating Information  Financial Accounting  Management Accounting  Tax Accounting
    5. 5. 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
    6. 6. Accounting is one of the several types of quantitative informationFour categories of information operating information financial accounting information management accounting information tax accounting information
    7. 7. INFORMATIONNon-quantitative information Quantitative information Accounting Non accounting information information Operating Financial accounting Management Tax accounting information accounting
    8. 8.  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.
    9. 9. MANAGEMENT ACCOUNTING INFORMATION – accounting information specifically prepared to aid managers. This information is used in three management functions planning implementation control
    10. 10. PLANNING actions should be taken care in the 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
    11. 11.  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
    12. 12. Accounting information is used in the control process as means of communication motivation attention getting appraisal
    13. 13. System Set of detailed methods, procedures, and routines established or formulated to carry out a specific activity, perform a duty, or solve a problem. –
    14. 14. Elements of System Inputs and outputs Processor Control Environment Feedback Boundaries/interface
    15. 15. Planning Implementation Control Appropriate action Feedback Plan revision
    16. 16. 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
    17. 17. Key Terms System Subsystem Information system (IS) Management information system (MIS) Accounting information system (AIS) Operations Process Management process
    18. 18. Key Terms Information Data Understandability Relevance Timeliness Predictive value Feedback value
    19. 19. Key Terms Verifiability Neutrality Freedom from bias Comparability Consistent Validity Accuracy Completeness
    20. 20. Key Terms Decision making Structured decisions Unstructured decisions Enterprise database Effectiveness Efficiency
    21. 21. Key Terms Confidentiality Integrity Availability Compliance Reliability of information
    22. 22. Elements in the Study of AISDull, Gelinas and Wheeler, Accounting Information System 2nd Edition, Page 31
    23. 23. 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
    24. 24. 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
    25. 25. 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
    26. 26. Information System Model 26
    27. 27. 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
    28. 28. 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
    29. 29. Management Decision Making 29
    30. 30. Strategic Management Tactical Management Operations Management Operations and Transaction ProcessingHorizontal information flows 30
    31. 31. 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
    32. 32. 2012 Top Technology Priorities MATIONTECHNOLOGY/RESOURCES/TOPTEC HNOLOGYINITIATIVES/Pages/2012TTI.aspx
    33. 33. 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
    34. 34. YOU Catalyst of change and improvement Enabler Decision maker
    35. 35. 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 ( Wikipedia ( BusinessDictionary.comThank you!
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