1. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.

2. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Chapter 1:
Introduction to Accounting
Information Systems
Accounting Information Systems 9e
Gelinas ►Dull ► Wheeler

3. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Textbook Themes
1. Enterprise Systems — integrates business process
functionality and information from all of an
organization’s functional areas (marketing and sales,
cash receipts, purchasing, cash disbursements, human
resources, production and logistics, and business and
financial reporting).
2. E-business — use of electronic networks (including
the Internet) to undertake business processes
between individuals and organizations.
3. Internal Control — a process to provide reasonable
assurance that organizational objectives will be
achieved.

4. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Learning Objectives
 Appreciate the complex, dynamic environment in which
accounting is practiced.
 Know the relationship between the AIS and the organization’s
business processes.
 Know the attributes of information.
 Recognize how information is used for different types of decisions
and at various levels in the organization.
 Recognize how the information system supports the management
function.
 Recognize the accountant’s role in relation to the current
environment for the AIS.

5. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Sarbanes-Oxley Act of 2002
Implications for both public and private accountants:
Section 404 (as modified by PCAOB Auditing Standard No. 5)
 Management must identify, document, and evaluate
significant internal controls.
 Auditors must report on the effectiveness of the
organization’s system of internal controls.
Section 409
 Requires disclosure to the public on a
“rapid and current” basis of material changes in an
organization’s financial condition.

6. Challenges & Opportunities of
Accountants
Will you be able to
adapt to advances in
technology and its
improvements?
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Could you consult
with management
to help them
comply with SOX?
Could you help
assess the risks
and benefits
related to an
organization?
Do you have
technology abilities
that would help you
develop controls
necessary to ensure
a secure and reliable
web presence?

7. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Elements in the Study of AIS

8. 2012 Top Technology Initiatives
1. Securing the IT environment
2. Managing and retaining data
3. Managing risk and compliance
4. Ensuring privacy
5. Leveraging emerging technologies
6. Managing system implementation
7. Enabling decision support and managing performance
8. Governing and managing IT investment/spending
9. Preventing and responding to fraud
10. Managing vendors and service providers
2012 AICPA IT
Initiatives

9. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Systems and Subsystems

10. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Systems and Subsystems (cont’d)

11. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Systems and Subsystems
System: a set of interdependent elements that
together accomplish specific objectives. A
system must have organization,
interrelationships, integration, and central
objectives.
Subsystem: a part of a system. Within limits,
any system or subsystem can be divided into its
component parts.

12. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Information System (IS)
An information system (IS) or management
information system (MIS) is a man-made
system that 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.

13. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Functional Model of an Information
System

14. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Accounting Information
System (AIS)
Accounting information system (AIS) is a
specialized subsystem of the IS.
Collect, process and report information related
to the financial aspects of business events.
Often integrated and indistinguishable from the
overall information system.
Like the IS, the AIS may be divided into
components based on the operational functions
supported. Components are called business
processes or AIS subsystems.

15. Three Business Process
Components
 Information process: portion of the overall IS related
to a particular business process.
 Operations process: man-made system consisting of
the people, equipment, organization, policies, and
procedures whose objective is to accomplish the work
of the organization.
 Management process: man-made system consisting of
the people, authority, organization, policies, and
procedures whose objective is to plan and control the
operations of the organization.
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.

16. Logical Components of a Business
Process
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.

17. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Transforming Data into
Information

18. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Transforming Data into
Information (cont’d)

19. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Information Qualities

20. Key Information Qualities
Effectiveness – relevant, timely, correct, consistent and
usable manner
Efficiency – productive and economical use of resources
Confidentiality – protection of sensitive information
Integrity – accuracy, completeness, and validity
Availability - available now and in the future
Compliance - complying with laws, regulations and
contractual arrangements
Reliability – appropriate, accurate, and verifiable
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.

21. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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.

22. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Steps in Decision Making

23. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Management Problem Structure
and Information Requirements

24. Structure of Decisions
Structured decisions: those for which all three
decision phases (intelligence, design, and
choice) are relatively routine or repetitive.
Unstructured decisions: those for which none
of the decision phases (intelligence, design, or
choice) are routine or repetitive.
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.

25. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Horizontal and Vertical
Information Flows
Horizontal information 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 information flows service a multi-level
management function from operations and
transaction processing through tactical,
operations, and strategic management.

26. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Accountant’s Role in Current
Business Environment
Designer — application of accounting
principles, auditing principles, IS techniques,
and systems development methods to design an
AIS.
User — participate in the AIS design process.
Auditor — provide audit and assurance services.

27. -E N D-
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.