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ADM4346 (10)
Chapter 1

Chapter #1, 2.docx

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University of Ottawa
Sheldon Weatherstone

Chapter #1: Accounting Information Systems: An Overview What is a System? • 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 • Data o Are facts that are recorded and stored? o Insufficient for decision making. • Information 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 • Benefits o o Reduce Uncertainty o Improve Scheduling o Improve Decisions • o Improve Planning • Costs o o Time & o Produce o Distribute Resources Information Information What Makes Information Useful • Relevant • Reliable o Is reasonably free from error and bias and faithfully represents • Complete o Reported information of everything • Timely o We want to have it fast • Understandable o Allows users to perceive its significance o Everyone understands it • Verifiable o Ensure that information represents what it purports to represent • Accessible o Available when needed in a useful formation  Combination of Timely and Understandable Business Process • Systems working toward organizational goals • Business Process Cycles o Financing o Production o Revenue o Human resource o Expenditure Business Transactions • Give–Get exchanges • Between two entities • Measured in economic terms Business Transactions • 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 • Data • Software • 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. Value Chain • The set of activities a product or service moves along before as output it is sold to a customer 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 HRTechnologypurchasing 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 ProcessOutput o Storage  Not something you are able to control  Or something y
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