1. 1 Chapter 1 Introduction to Accounting Information Systems Chapter 2 Intelligent Systems and Knowledge Management

2. Learning Objectives To know the attributes of information To understand decision making To recognize how information is used for different types of decisions and at various levels in the organization To recognize how the IS and the AIS support the management function

3. Learning Objectives (2) To become familiar with the support that management receives from intelligent decisions aids To appreciate the influence of strategic planning to the ongoing success of the organization To understand the importance of the IS’s strategic plan and the relationship of that plan to the organization’s strategic plan

4. 4 Intelligent Decision Aids Decision support systems Executive information systems Group support systems Expert systems

5. 5 Transforming data into information STORAGE PROCESSING Users INPUTOUTPUT Database Transformation Users DataInformation

6. 6

7. 7 Qualities of Information Effectiveness: information relevant & pertinent; delivered in timely, correct, consistent, usable manner. Efficiency: info provided through most productive and economical use of resources. Confidentiality: protection of sensitive info from unauthorized disclosure. Integrity: accuracy, completeness, validity re business values & expectations

8. 8 Qualities of Information (2) Availability: info available when required by business process now & future. Also concerns safeguarding resources & capabilities. Compliance: deals with complying with laws, regulations, contracts; externally imposed business criteria. Reliability: appropriate info for management to operate and exercise financial and compliance reporting responsibilities.

9. 9 Principal Criterion for Judging Information Quality The benefit of the information must exceed its cost

10. 10 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. Simon, The New Science of Management Decision, 1960.

11. 11 Steps in Decision Making

12. 12 Nature of information required Strategic managers - assess environment; project future events & conditions. Tactical managers - focused on relevant operational units. Operational managers - narrower in scope, more detailed, more accurate, from within.

13. 13 Tactical Management Strategic Management Unstructured decisions Structured Decisions Operations Management Operations and Transaction processing

14. 14 Unstructured decisions Structured Decisions Information Requirements Undefined Well Defined External Internal Summarized Detailed Future Historical Infrequent Frequent Less accuracy More accuracy

15. 15 Decision Support & Executive Information Systems Decision Support System (DSS) or Executive Information System (EIS) World Wide Web Entity- wide database External databases Decision models Interface Decision maker Hardcopy output

16. 16 Decision support systems –Make use of “model base” –Do number-crunching to aid decision makers –Give access to various internal and external databases, including WWW –Permit “what-if” analyses Executive information systems –Designed to be especially user-friendly –Lead executives to phrase their questions using intuitive menus –Display results graphically

17. 17 Expert Systems Knowledge base Knowledge acquisition facility Inference engine User interface (includes explanation facility) User Knowledge engineer Human expert

18. 18 Human expert - possesses relevant knowledge Knowledge engineer - has skill to extract knowledge and encode in knowledge base Knowledge base - contains relevant expertise, in the form of rules Inference engine - executes line of reasoning based on facts and rules User interface - provides for user input to system and displays output. Contains explanation facility to let user ask Why? How? etc.

19. 19 Neural Networks Computer-based systems of hardware and software. Mimic human brain’s ability to recognize patterns, predict outcomes with incomplete information. Derive knowledge from data; must be “trained”. Four types: Prediction, Classification, Data Filtering, Optimization

20. 20 Groupware User Groupware Knowledge management system Database Knowledge warehouse

21. 21 Strategic Planning Environment Objectives Critical success factors Performance indicators Implement Process Implement Organization structure Performance indicators

22. 22 Strategic planning & the accountant Accountant should participate in strategic planning process Could help establish performance indicators Should approve organizational and information systems strategic plan Will have input when strategic plans affect Accounting Information Systems

23. Learning Objectives To know the attributes of information To understand decision making To recognize how information is used for different types of decisions and at various levels in the organization To recognize how the IS and the AIS support the management function

24. Learning Objectives (2) To become familiar with the support that management receives from intelligent decisions aids To appreciate the influence of strategic planning to the ongoing success of the organization To understand the importance of the IS’s strategic plan and the relationship of that plan to the organization’s strategic plan