Introduction to Accounting Information Systems • • • • • • • • • • Learning 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 understand decision making Recognize how information is used a various organizational levels Recognize how information supports management functions Appreciate the influence of strategic planning on success Understand the importance of the IS strategic plan To recognize the accountant’s role in relation to the current environment for AIS To understand how to use this textbook effectively to learn AIS Introduction to Accounting Information Systems The AIS Wheel • Introduces each chapter; topics are listed on spokes, hub and perimeter of wheel Textbook Themes Enterprise systems— integrate the business process functionality and information from all of an organization’s functional areas, such as marketing and sales, cash receipts, purchasing, cash disbursements, human resources, production and logistics, and business reporting (including financial reporting) E-Business—use of networks to undertake business processes Internal control— a system of integrated elements that provide reasonable assurance that a business will reach its business process goals Elements in the Study of AIS Accounting System and Subsystems Accounting Systems and Subsystems • 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, which we have named System 1.0 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 • The Figure on the next slide depicts the functional components of an information system Information System Model 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 10 Components of Business Process The IS prepares an invoice and sends it to the customer 20 Components of Business Process 10 The IS sends management a report comparing actual sales to previously established sales quotas 21 Information Qualities 22 Management Decision Making Intelligence: Searching the environment for conditions calling for a decision Design: Inventing, developing, and analyzing possible courses of action Choice: Selecting a course of action 23 Management Decision Making 24 flo ws fo rm at ion Ve rti ca l in Strategic Management Tactical Managemen t Operations Management Operations and Transaction Processing Horizontal information flows 25 Management Problem Structure and Information Requirements • Horizontal 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 Flows relate to the flow of information to and from strategic management through tactical management, operations management, and operations and transaction processing 26 Management Problem Structure and Information Requirements • Higher up the pyramid, the less structured the decision – – – – – – Less defined External orientation More summarized information Future oriented Less frequent Less accurate • Lower down the pyramid, the more structured the decision – – – – – – More defined Internal orientation More detailed information Historical More frequent More accurate 27 The strategic planning process addresses such questions as: What business are we in and who are our customers? What knowledge advantage we have in our business? How should our products be perceived? What rate of return on assets, earnings, or cash flow are we trying to achieve? What are our social responsibilities? 28 Strategic Planning Process Assess environment for opportunities or threats 29 Strategic Planning Process Assess the organization’s strength’s and weaknesses and develop objectives that match the strengths and weaknesses with opportunities in environment 30 Strategic Planning Process Derive the factors that are central to the accomplishment of the objectives and to the survival of the organization—the critical success factors 31 Strategic Planning Process Develop corporate strategy: A strategy is the means (organizational structure and processes) by which an organization has chosen to achieve its objectives and critical success factors 32 Strategic Planning Process Identify the performance indicators that will demonstrate achievement of the organization’s strategies and critical success factors 33 Accountant’s Role • Designer—application of accounting principles, auditing, information systems, and systems development • User—participate in design • Auditor—provide audit and assurance services 34 ... will reach its business process goals Elements in the Study of AIS Accounting System and Subsystems Accounting Systems and Subsystems • A system is a set of interdependent elements that together... AIS Introduction to Accounting Information Systems The AIS Wheel • Introduces each chapter; topics are listed on spokes, hub and perimeter of wheel Textbook Themes Enterprise systems integrate... output information to users • The Figure on the next slide depicts the functional components of an information system Information System Model Purpose of AIS • Collect, process and report information