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Introduction to Accounting System


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Introduction to Accounting System

  1. 1.  Unit overview  Accounting Information System Concept 2 Lecture 1 Introduction to accounting systems 1 Accounting System Design and Development
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  3. 3.  Data (Singular form datum) are the raw materials of which Information Systems are built.  Information is processed or value-added data.  Knowledge is understanding the meaning of information – knowledge is personal and subjective.   What is information?  What is a system?  What is information system?  What is an accounting information system?  Why do business need IS?  Why do accountant need to know about IS? 
  4. 4.  ‘A collection of parts that work together to achieve some purpose.’  Systems can be man-made or natural  Identify some systems that you know about – what do they have in common?   Can you give an example which links all three?  Data  Information  Knowledge
  5. 5. System – data conversion Inputs Data Processing Outputs Information 
  6. 6.  Processes are the sets of activities that are performed on the inputs into the system Examples: o Format checks on data o Validity checks on data   Manual keying  Scanning through barcode technology  Scanning through image scanners  Magnetic ink character recognition [MICR]  Voice recognition  Optical mark readers 
  7. 7.  A system whose purpose is the efficient storage, manipulation, processing and retrieval of information.  A set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision marking and control in an organization.   Outputs refer to what is obtained from a system, or the result of what the system does Examples: o Receipts o Invoices  Outputs are normally the starting point when designing a system 
  8. 8. Source: Laudon and Laudon 2006   The components of an information system are: ◦ People ◦ Data/information ◦ Procedures ◦ Software ◦ Hardware ◦ Communication 
  9. 9.  We can use technology to create barriers to competition.  We can use technology to lower the costs of market entry.  We can shorten timelines, speed cashflow, cut out intermediaries,  We can be better informed than our competitors.   Internet growth and technology convergence.  Transformation of business enterprise.  Growth of a globally connected economy.  Growth of knowledge and information-based economies.  Emergence of the digital firm. 
  10. 10. Business process Source: Laudon and Laudon 2006  Source: Laudon and Laudon 2006 
  11. 11.  Transaction Processing Systems (TPS) ◦ serves the operational level of an organization. ◦ are designed to process routine transactions efficiently ◦ E.g. Systems to calculate the weekly and monthly payroll and tax payments  Knowledge management systems (KMS) ◦ helps businesses create and share information. ◦ uses group collaboration systems such as an intranet.  1. When describing systems, a component may belong to more than one system. 2. Information Systems is purely and simply about technology 3. Successful Information Systems are centered on technology 
  12. 12. ◦ improves the productivity of employees who need to ◦ provides individuals effective ways to process personal and documents. e.g. word processing, spreadsheets, file ◦ serves the management level of the organization. usually take data from the TPS and summarise it into a ◦ MIS reports tend to be used by middle management and  Decision-support systems (DSS) ◦ helps management make decisions in situations where there is uncertainty about the possible outcomes of those decisions. ◦ DSS comprise tools and techniques to help gather relevant information and analyse the options and alternatives. ◦ DSS often involves use of complex spreadsheet and databases to create "what-if" models.  Executive support systems (ESS) ◦ serves the strategic level of an organization. ◦ It gathers, analyses and summarises the key internal and external information used in the business.   Office automation systems (OAS) process data and information. organisational data, perform calculations, and create managers, personal calendars, presentation packages  Management information systems (MIS) ◦ mainly concerned with internal sources of information. MIS series of management reports. operational supervisors. 
  13. 13.  A collection of data and information processing procedures aimed at converting economic data into the accounting information needed by users for decision about the allocation of scare resource.  AIS = Accounting + Information System  Source: Laudon and Laudon 2006 
  14. 14. Accounting and IS – a changing relationship  Evolution ofAIS Pre 15th century: recording economic activities 15th century: Pacioli’s development of double-entry accounting 19th century: adding machines and cash registers >> batch totals 20th century: punch cards >> fully integrated computerised systems 21st century: accounting information systems 
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