System Planning and Development on Accounting


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System planning (BSP) is a method of analyzing, defining and designing the information architecture of organizations. For more details relating to it visit

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System Planning and Development on Accounting

  1. 1. (Part I)  Understand the roles of accountants, analysis teams, and steering committees in system studies;  Understand why system analysis must understand the strategic and operational goals of a company;  Be able to help plan and complete the analysis and design phases of a system study;  Be able to evaluate alternative system proposals and make a selection or choose to outsource;  Be familiar with the activities required to implement and maintain a large information system.  System Planning and Development Accounting System Design and Development
  2. 2. predefined input3. Design o Outputs of onereview Systems development lifecycle represents a very structured and methodical way of doing development projects 1. Investigation o Each of these 2. Analysis stages has a 4. Implementation and output 5. Maintenance & stage provide input for next stage   Their current system is inefficient  Two or more formally separate accounting systems need to be combined  The power of the Internet is causing many firms to scramble to develop a web presence  Etc. 
  3. 3. Systems Planning and the Initial Investigation 
  4. 4.  When performing a systems study, the participants should use a systems approach – that is, a broad point of view.  A broad viewpoint will identify the goals top management really desired and find the “real problems” of the current AIS.   System approach to planning 1) approaching organizational problems from a broad point of view 2) utilizing an interdisciplinary study team to evaluate an organization’s information systems 3) having the company’s steering committee work with the study team in all phases of work 
  5. 5.  Who might be chosen as study team members?       The use of an interdisciplinary study team follows from the importance of a broad viewpoint when performing a systems study.  The team can provide knowledge of several disciplines and serve as a team of “specialists”. 
  6. 6.  The Steering Committee interfaces between the client company’s management and the study team.  A steering committee requires that top management focus on the study and development, ensures that top management will be involved, and helps ensure that the newly designed system is one that the company wants and needs.   Who might be chosen as study team members? ◦ IT specialist ◦ Middle-level manager ◦ Operational supervisor ◦ Accountant ◦ Auditor 
  7. 7.  In a feasibility evaluation, the design team determines the practicality of alternative proposals.  Example of feasibility studies ◦ Financial ◦ Legal ◦ Schedule ◦ Technical ◦ Strategic   The first task of a systems study is to perform a preliminary investigation of the information system in question and to advise the steering committee of its findings.  An important part of this investigation is to separate symptoms from causes.  The “deliverable” of this phase is the preliminary investigation report. 
  8. 8.  The operational feasibility of any proposed system attempts to answer the question: “How consistent will the tasks and procedures of the new system be with those of the old system?”  Operational feasibility is mostly a human relations study because it is strongly oriented toward “people problems.”   The technical feasibility of any proposed system attempts to answer the question: “What technical resources are required by a particular system?”  Hardware and software are two components of the question.  Need to also determine if current employees possess the technical skills. 
  9. 9.  Legal feasibility is largely concerned with whether there will be any conflict between a newly proposed system and the organization’s legal obligations.  Revised systems should comply with applicable federal and state statutes about financial reporting and other contractual obligations.   Schedule feasibility involves estimating how long it will take a new or revised system to become operational and communicating this information to the steering committee. 
  10. 10.  Projected costs and benefits are often converted to their present values by using capital budgeting techniques.  The benefits of a computerized data processing system are often difficult to quantify monetarily.  The costs are usually based on accountant’s estimates.   Economic feasibility focuses on projecting which, if any, of the proposed computerized systems are expected to be cost-effective.  The design team should perform a cost- benefit analysis on each proposed system.  A cost-effective system is one whose anticipated benefits are expected to exceed its anticipated costs. 
  11. 11. Systems Analysis
  12. 12. Phase 1: Understand the systems goals Phase 2: Systems survey to acquire sufficient information relating to current systems problems Phase 3: Suggest possible solutions to solve the systems problems through a systems analysis report   The basic purpose of the Systems Analysis phase is to study a system in depth. 
  13. 13.  Cost awareness  Relevant output  Simplified structure  Flexible structure   The company’s information systems goals can be investigated at three levels. ◦ General System Goals ◦ Top Management Systems Goals ◦ Operating Management Systems Goals 
  14. 14.  Decision-making functions of operating managers relate to well-defined and narrower organizational areas than those of top management.  Most of their decisions are for the current business year and information required is generated internally.   Much of the information required by top management is for long-range planning and controlling functions.  Long-range planning requires external information.  The study team should ascertain whether needs of top management are being satisfied by company’s current information system. 
  15. 15.  Many people resist changes to their jobs.  The systems study should gain cooperation and support of employees or it will not be effective.   A Systems Survey’s objective is to enable the study team to obtain a complete understanding of the company’s current operational information system and environment.  Of special importance is identifying strengths and weaknesses of the current system. 
  16. 16. The final procedure in systems analysis is to communicate the consultants’ systems survey work in a Final Systems Analysis Report.  Report should be submitted to steering committee.  The report should contain all information needed by management to make a sound decision concerning the proposed design.   Review of documentation  Observation of the current system  Using questionnaires to determine user and perhaps customer satisfaction  Review of internal control procedures  Conducting interviews with individual system participants 
  17. 17.  If the client’s steering committee reacts positively toward the recommendations, the organization moves forward with systems design. Prior to preparing a detailed design for a computerized information system, the consultants should conduct a feasibility evaluation.  Systems Design and Selection
  18. 18.  Perform feasibility evaluation  Prepare detailed systems design  Prepare systems specifications report  Submit systems specifications report to computer vendors or internal IT department.  Select particular computer vendor proposal or develop application in-house.  Perform feasibility evaluation Prepare detailed systems design Prepare systems specification report Buy Make Submit systems specification Submit systems specification report to vendors report to internal IT department Select particular Develop application vendor proposal inhouse 
  19. 19. Control requirements  Processes  Data Elements  Data Structure  Inputs  Outputs  Documentation  Constraints  Controls  Reorganizations   The design team prepare a Detailed System Design for the general systems plan.  Detailed System Design includes specifying outputs, processing procedures, and inputs for the new system.  This becomes the “blueprint” for creating or acquiring the new system.  From an accounting standpoint, one of the most important elements in a new system is . 
  20. 20.  Process design involves identifying the processing procedures required to produce the outputs.  Tools available to model processes are ER diagrams, structure charts, system flowcharts, data flow diagrams, program flowcharts, and process maps.  Common to all of these design methodologies is the idea of a structured, top-down design.   An AIS should be designed to meet users’ information needs; thus, output specifications must by prepared first.  The design team should use data gathered from the prior systems analysis work to help decide what kinds of reports are needed.  Outputs should be classified according to functional area requesting them. 
  21. 21.  The Systems Specifications Report includes detailed information about the system design proposal. After the steering committee approves the detailed design work, it now faces a control requirement.   Team must identify and describe each data element in the systems design as well as specify the way data items must be coded.  The design team must also determine the source for each data element. 
  22. 22. Implementation, Follow-up and Maintenance  The performance capability of each proposed system in relation to its cost.  The costs and benefits of each proposed system.  The maintainability of each proposed system.  The compatibility of each proposed system with existing systems.  Vendor Support 
  23. 23.  Prepare the Physical Site - accountants are concerned about incremental costs.  Determine the Functional Changes - includes analysis of job function changes and types of data that will be processed and reported.  Select and Assign Personnel - new system may require added personnel, job reengineering, or terminating employees.   Systems Implementation is often called the “action” phase of a systems study because the recommended changes from the prior analysis, design, and development work are now put into operation. 
  24. 24.  Convert Data Files - data files may have to be converted to newer, more useful formats.  Acquire Computer Software ◦ Software acquired from an independent vendor is called canned software. ◦ Hardware and software combined in one package is called a turnkey system.  Test Computer Software - programs must be tested regardless of where they came from or who wrote them.   Train Personnel - computer vendor personnel and implementation team can help train personnel.  Acquire and Install Computer Equipment – implementation team and computer vendor’s employees help to install the new computer equipment.  Establish Internal Controls - cost- effective general and application controls should be built into the system. 
  25. 25.  The purpose of follow-up and maintenance is to monitor the new system and make sure that it continues to satisfy the three levels of organizational goals: ◦ General systems goals ◦ Top management systems goals ◦ Operating management systems goals   Conversion - there are several conversion methods: ◦ Direct conversion - the old system is immediately discontinued when the new system is implemented. ◦ Parallel conversion - both the new and old system operate simultaneously for a certain period of time. ◦ Modular conversion (or pilot conversion) - consists of testing and converting the new system one module at a time. 
  26. 26.  Stair, R. and Reynolds G. (2006), Fundamentals of Information Systems, 3rd Edition, Thompson, USA  Bagranoff, N. and Simkin, M. and Strand, S. (2008), Core Concepts of Accounting Information Systems, 10th Edition, John Wiley & Sons, New York 
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