Accounting Information System (DBMS Approach) Yohanes Handoko, SE

Accounting Information System Definition Purpose Uses Keyword

AIS Definition A group of structure and procedure based on Information Technology that working together in processing transaction data into accounting information for a certain purpose.

Purpose Efficiency Effectivity Control Strategic Weapon

Uses Producing External Reports Supporting Routine Activities Decision Support Planning and Control Implementing Internal Control

Keyword Structure Procedure Technology Data Information DataInformation Purpose Integration Control Accounting Cycle (AIS Subsystem) Accounting Cycle (AIS Subsystem)

Structure of AIS Database as the foundation of AIS Subsystem of AIS AIS Application Network and Integration of AIS Management & Departement in organization

Database Revenue Cycle Expenditure Cycle GL CycleHR Cycle Investment Cycle Financial Report AIS

Procedure of AIS Data and Information flow in Accounting Objects Data and Information flow in Accounting Cycle  Example: Acquisition Cycle. requisition – order - purchase – delivery – receive

Technology: Ms.Access Database Management System

DBMS-Definition Software system that is used to create, maintain, and provide controlled access to user databasesdatabase Component of DBMS:  Table (database)  Query  Form  Report  Switchboard Manager (Control)  Security (Control)  Database Splitter & Merge (Integration)

Database An organized collection of logically related data, usually designed to meet the information needs of multiple users in an organization (different with reporsitory).  Personal Database  Workgroup Database  Departement Database  Enterprise Database

DBMS Component in an Information System Model

Why DBMS? File Processing Approach – Database Approach Disadvantages of File Processing Approach and Advantages of Database Approach

Disadvantages of File Processing Approach Program-Data dependence Duplication of Data Limited Data Sharing Lenghty Development Times Excessive Program Maintenance

Advantages of Database Approach Program-Data independence Minimal Data Redudancy Improved Data Consistency Improved Data Sharing Increased Productivity of Application Development Enforcement of Standard Improved Data Quality

Cost and Risk of the Database Approach Specialized Personnel Instalation and Management Cost and Complexity Conversion Cost Need for Explicit Backup and Recovery Organizational Conflict

Data Description about objects, events, activities, and transaction, which don’t have any meaning or have a direct influence to the user Example: GN Metadata: Data that describe the properties or characteristics of end user data, and the context of that data

Data files A data file is a computer file which stores data for use by a computer application or system (different with program file, configuration files, or directory files) Two types of data files: master files and transaction files (what for?)

Information Data that have been processed in such way as to increase the knowledge of the person who uses the data

Data - Information Input the transaction data into the system Process and query the data to obtain information Information: Should have meanings for the user

Control Risk Internal Control General Control – Application Control Preventive, Corrective, Detective

Accounting Cycles/Transaction Cycles (AIS Subsystem) Revenue Expense General Ledger Investment Human Resource Production Inventory - Jones & Rama in Ch2, organized business process in 3 main transaction cycle: Acquisition Conversion Revenue

Basic Ability in Developing AIS Accounting logic DBMS development concept, creating ER- diagram (entity, attribute and relationship), normalization Converting accounting logic into DBMS

Basic of Accounting logic Accounting equation Preparing income statement and balance sheet

DBMS development concept Defining Entity, Attribute, and Relationship Creating ER-Diagram ER-Diagram Mapping into Table Normalization Query

Converting Accounting logic into DBMS 3C: Code of Account, Calendar, Currency in creating financial report based on DBMS. Creating query based on accounting logic to generate a financial report.

Grouping accounting data based on code of account Code 1* – Asset – Balance Sheet Code 2* – Liabilities – Balance Sheet Code 3* – Equity – Balance Sheet Code 4* – Revenue – Income Statement Code 5* – Expense – Income Statement

Converting basic accounting logic into DBMS

References Jones & Rama, Accounting Information Systems: A Business Process Approach, 1st edition, Thomson Learning, South Western, Chapter 1 & 2 Hoffer,Prescott, &McFadden, Modern Database Management, 7th edition, Pearson, Upper Saddle River, Chapter 1 & 2 Wilkinson, cerullo, & Raval, Accounting Information System: Essential Concepts and Applications, 4th edition, Wiley, Chapter 1 & 2