1. 1 Accounting systems design & evaluation Karen Lau 25 Feb 2002

2. 2 Learning outcomes 1.Identify and discuss the features and various parts of an information system 2.Discuss the management procedures in identifying and controlling the Systems Development Life Cycle (SDLC) 3.Describe the structure and alternative processing techniques for an AIS structured on a database

3. 3 Learning outcomes 4.Describe and prepare the documentation used in an AIS including the various types of flow charts, and their relevant symbols, data flow, diagrams, decision tables, and other techniques 5.Review and briefly describe the functions of various accounting information sub-system applications and any relevant system specifications and considerations 6.Review and discuss the procedures and management strategies for evaluating the complete information system.

4. 4 Teaching plan 1.System concepts 2.System and subsystem boundaries 3.Data processing & storage 4.SDLC 5.Project planning (1) 6.Project planning (2) 7.System specification 8.Assessment 9. Documentation 10. Input & output design 11. Process design 12. System implementation 13. System evaluation 14. Case study - Preparation 15. Assessment 16. Case study - Presentation

5. 5 Class structure Lecture Multimedia Exercises Class participation Case studies Group discussion Assessments

6. 6 Class rules Mobile off please Class participation Communication –kkylau@netvigator.com

7. 7 Assessment plan Class participation10% Case studies10% Assessments30% Examination50% Total100%

8. 8 System A set of parts coordinated to accomplish a set of goals 1 –Component parts –Process: parts are coordinated in a defined way –Goals: objectives toward which the component parts are coordinated 1 C. West Churchman, The Systems Approach (NY: Dell, 1968) p 29

9. 9 Today’s lecture What is a Management Information System? What are the marketing and customer orientation priorities in establishing policies that affect the establishment of a MIS? What are the internal control and security requirements of a MIS? What are the information & reporting requirements of users of an AIS? What are the procedures that may be used to identify the users and their information requirements?

10. 10 Management information systems (MIS) The MIS or Information System (IS) is the combination of people, procedures, and machines intended to provide information for management decision making The objective of a MIS is to provide information to allow the organisation to meet its goal. Specialist sub-systems of MIS may include Accounting Information system (AIS), decision support system (DSS)

11. 11 Accounting information system AIS: a part of the MIS and performs two functions within an organisation: –Financial accounting: process transactions –Management accounting : support managerial decision making Types of AIS: –Manual system –Computer-based system –Computer system

12. 12 Accounting information system Financial Accounting Management Accounting External regulatory requirements Internal decision- Maker requirements Accounting information system

13. 13 AIS – Internal requirements Produce quality information to support decision making Ensure that business activities are in accordance with organsiational goals and objectives: forecasting results necessary to achieve objectives and then measuring results against these forecasts Safeguard organisational assets including data and information: Internal control should include segregation of duties and documentation of systems and procedures.

14. 14 AIS – External requirements Meet requirements: –Regulators –Industry specific requirements –Customers –Suppliers –Financiers

15. 15 Why study AIS? Almost every organizations uses computer to process accounting transactions Continuous process improvement Computer audit – planning and execution System implementation –Users –Management consultants

16. 16 Data & information DataInformation ProcessingInputOutput Feedback & control Information system

17. 17 Data & information Transformation Process Data input Output Internal / External Sources Organise, Sort, Calculate Int/ Ext Decision makers Storage Database MIS must collect, record and process data to produce information to support decision making. Information system

18. 18 Users of information Internal –Senior management –Middle management –Operational management External –Financiers –Stockholders –Auditors –Suppliers –Customers –Regulators

19. 19 Information requirement pyramid Data Reduction Strategic planning Senior management Management Control Middle management Operation Control Organisation & Transaction Processing Operational management

20. 20 Information requirements at different levels of management Senior management Aggregate data at corporate level Unstructured, flexible, adaptable, predictive External: industry and competitor Middle management Lower level responsibility areas Semi-structured Operational management Structured, detailed, historical, accurate Performance reports for low-level responsibility areas

21. 21 Management decision continuum OperationsMiddle Senior Management Structured Unstructured

22. 22 Information flows A Top-down flow: originates from events that occur at the top management level in an organisation. A bottom-up flow: originates from events that occur at the lower levels in the organisation structure.

23. 23 Information requirements across the entire value chain Planning Perform sales Customer service Marketing Supplier network Customer network Manage logistics Distribution Procurement Source: PricewaterhouseCoopers

24. 24 Information - marketing & customers Historical trends and forecasts: –Sales –Market share Sales –By product or service –By Region Production - Inventory Customer satisfaction –Service –Quality

25. 25 Desired qualities of information Appropriate Dependable Available Corroborative Understandable Timely

26. 26 Implications to AIS Extent of data sharing among internal and external users Database integration & system interface Forms of processing Extent of automation (data retry, processing and retrieval) Scalability requirements System architecture Security and internal controls

27. 27 Roles of accountants in the financial information framework Source: Australian National Audit Office

28. 28 Procedures to identify information requirements Who are the stakeholders? What are the organisational objectives? What are their responsibilities What are the performance measures? How is data (budget, forecast & actual) to be collected?

29. 29 Sources to define information needs Interviews with stakeholders Review documentation such as: –Mission statement –Business plans –Annual reports –Accounting standards –Company policies and procedures –Organisation structure

30. 30 To summarise What is a Management Information System? What are the marketing and customer orientation priorities in establishing policies that affect the establishment of a MIS? What are the information & reporting requirements of users of an AIS? What are the procedures that may be used to identify the users and their information requirements?

31. 31 Exercise 1.1 – Develop a concept map A concept map helps show your understanding or interpretation of the key concepts in this course For example: MenWomen BoysGirls

32. 32 Exercise 1.1 – Develop a concept map MenWomen BoysGirls become love Male Female hate Don’t play with