Chapter #1: Accounting Information Systems: An Overview
What is a System?
o 2 things working together to achieve a goal
• Goal Conflict
o Components act in their own interest without regarding for overall goal
• Goal Congruence
Data vs. Information
o Are facts that are recorded and stored?
o Insufficient for decision making.
o Is processed data used in decision making?
o Too much information however, will make it more, not less, difficult to make
decisions. This is known as Information Overload.
Value of Information
o Reduce Uncertainty o Improve Scheduling
o Improve Decisions •
o Improve Planning
o Time & o Produce o Distribute
Resources Information Information What Makes Information Useful
o Is reasonably free from error and bias and faithfully represents
o Reported information of everything
o We want to have it fast
o Allows users to perceive its significance
o Everyone understands it
o Ensure that information represents what it purports to represent
o Available when needed in a useful formation
Combination of Timely and Understandable
• Systems working toward organizational goals
• Business Process Cycles
o Financing o Production
o Revenue o Human resource
• Give–Get exchanges
• Between two entities • Measured in economic terms
• Give–Get exchanges
• Between two entities
• Measured in economic terms
Accounting Information System
• Collect, process, store, and report data and information
• If Accounting = language of business
• AIS = information providing vehicle
• Accounting = AIS
Components of AIS
• People using the system
• Procedures and Instructions
o For collecting, processing, and storing data
• Information Technology (IT) Infrastructure
o Computers, peripherals, networks, and so on
• Internal Control and Security
o Safeguard the system and its data
AIS and Business Functions
• Collect and store data about organizational:
o Activities, resources, and personnel
• Transform data into information enabling
o Management to: Plan, execute, control, and evaluate
• Activities, resources, and personnel
• Provide adequate control to safeguard
o Assets and data
ASI Value Add
• Improve Quality and Reduce Costs
• Improve Efficiency
• Improve Sharing Knowledge
• Improve Supply Chain
• Improve Internal Control
• Improve Decision Making
Improve Decision Making
• Identify situations that require action.
• Provide alternative choices.
• Reduce uncertainty.
• Provide feedback on previous decisions.
• Provide accurate and timely information.
• The set of activities a product or service moves along before as output it is sold to a
o At each activity the product or service gains value
Value Chain – Primary Activity
• Inbound logistics Operations Outbound Logistics Marketing/Sales Service
Value Chain – Support Activity
• Firm Infrastructure HRTechnologypurchasing AIS and Corporate Strategy
• Organizations have limited resources, thus investments to AIS should have greatest
impact on ROI.
• Organizations need to understand:
o IT developments
o Business strategy
o Organizational culture
• Will effect and be effected by new AIS
Chapter #2: Overview of Transaction Processing and ERP System
Data Processing Cycle
• Input ProcessOutput
Not something you are able to control
Or something y