2Understand the related concepts of transaction cycles and Learning ObjectiveUnderstand the related conceptsof transaction cycles andinternal control structure.
3Overview An accounting information system (AIS) is a collection of resources designed totransform data into information.Accounting information systemsperform this transformation.ManualComputerized
4Information and Decisions Who are the two main usersof accounting information?External usersInternal users
5Information and Decisions Who are the external usersof accounting information?StockholdersInvestorsCreditorsGovernment agenciesCustomers and vendors
6Information and Decisions Hierarchy of Internal UsersTop-LevelManagementStrategicMiddleManagementSummarizationand FiltrationTacticalLower-LevelManagementOperationalTransaction oriented
7Information Systems The term information system suggests the use of computer technology in an organization.HardwareDataInformationSoftware
8Information Systems Electronic Data Processing System (EDP) Data Processing System (DP)Management Information System (MIS)Decision Support System (DSS)Expert System (ES)Executive Information System (EIS)Accounting Information System (AIS)
9Business Processes Tasks: Data Organizational units Logical time sequence
10Primary Business Processes InboundsaleslogisticsOutboundsaleslogisticsOperationsMarketingService
11Supporting Business Processes ProcurementTechnologydevelopmentHumanresourcesFirminfrastructure
13Internal Control Process Reliability of financial reportingEffectiveness and efficiencyCompliance
14Internal Control Process What are the elements of internal control?Control environmentRisk assessmentControl activitiesInformation and communicationMonitoring
15Internal Control Process Segregation of Duties:No individual or department shouldcontrol the accounting recordsrelating to its own operation.Internal Auditing:It is an independent appraisalactivity within the organization.