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1.  Unit overview
 Accounting Information System Concept
2
Lecture 1
Introduction to accounting systems
1
Accounting System
Design and Development

2. 

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.  ‘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. System – data conversion
Inputs Data
Processing
Outputs Information


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.  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. Source: Laudon and Laudon 2006

 The components of an information system
are:
◦ People
◦ Data/information
◦ Procedures
◦ Software
◦ Hardware
◦ Communication


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. Business process
Source: Laudon and Laudon 2006

Source: Laudon and Laudon 2006


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. ◦ 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.  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. 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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