1. Accounting Information Systems: An Overview
Chapter 1

2. Understand the related concepts of transaction cycles and
Learning Objective 1
Understand the related concepts
of transaction cycles and
internal control structure.

3. Overview An accounting information system (AIS)
is a collection of resources designed to
transform data into information.
Accounting information systems
perform this transformation.
Manual
Computerized

4. Information and Decisions
Who are the two main users
of accounting information?
External users
Internal users

5. Information and Decisions
Who are the external users
of accounting information?
Stockholders
Investors
Creditors
Government agencies
Customers and vendors

6. Information and Decisions
Hierarchy of Internal Users
Top-Level
Management
Strategic
Middle
Management
Summarization
and Filtration
Tactical
Lower-Level
Management
Operational
Transaction oriented

7. Information Systems The term information system suggests the use
of computer technology in an organization.
Hardware
Data
Information
Software

8. Information 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)

9. Business Processes Tasks: Data Organizational units Logical time
sequence

10. Primary Business Processes
Inbound
sales
logistics
Outbound
sales
logistics
Operations
Marketing
Service

11. Supporting Business Processes
Procurement
Technology
development
Human
resources
Firm
infrastructure

12. Transaction Processing Cycles
1. Revenue cycle
2. Expenditure cycle
3. Production cycle
4. Finance cycle

13. Internal Control Process
Reliability of financial reporting
Effectiveness and efficiency
Compliance

14. Internal Control Process
What are the elements of internal control?
Control environment
Risk assessment
Control activities
Information and communication
Monitoring

15. Internal Control Process
Segregation of Duties:
No individual or department should
control the accounting records
relating to its own operation.
Internal Auditing:
It is an independent appraisal
activity within the organization.

16. Describe the organizational structure of the information
Learning Objective 2
Describe the organizational
structure of the information
system function in organizations.

17. The Information System Function
Chief
Information
Officer
Manager
Systems
Analysis
Programming
Operations
Technical
Support
User
Steering
Committee

18. The Information System Function
Manager
Systems
Analysis
Manager
Programming
Application
Analysts
Programmers

19. The Information System Function
Manager
Operations
Maintenance
Programmers
Computer
Operators
Data
Entry
File
Librarian

20. The Information System Function
Manager
Technical
Support
Database
Administration
Communication
Analysts
Systems
Programmers

21. The Information System Function
Project organizations
Analysts
Programmers
Application projects

22. Discuss applications of information technology
Learning Objective 3
Discuss applications of
information technology
in organizations.

23. End-User Computing End-user computing (EUC) is the
hands-on use of computers by end users.
Functional end users do their own
information processing activities.

24. EUC: Mainframe Application
User Submits
Query Language
Job
User Report
Database
Accounts Receivable
Data
Processor
Access Control
Software

25. Data Processing for the End User
Traditional Approach
User
Information System
Specialists
Data
Processing

26. Data Processing for the End User
End-User Computing Approach
User
Database Software or
Personal Computer
Data
Processing

27. EUC: Stand-Alone PC Application
Mainframe Data
or Report
Personal
Computer
Report
User Prepared
Data

28. Quick-Response Technology
Quick-response systems are essential
to the total quality performance
(TQP) movement in business.
TQP is also called TQM or
total quality management.
TQP emphasizes customer satisfaction.

29. Quick-Response Technology
Hardware and software standardization
Electronic data interchange (EDI)
Universal product code (UPC) bar
code identification of products
and scanning technologies

30. Quick-Response Technology
Retailer’s Computer System
Retail Sale
of Product
Scan Bar
Code
Electronic Data
Interchange
Vendor’s Computer System
Ship Order

31. Web Commerce Sales via the World Wide Web are
an integral part of the economy.
What are some benefits?
Consumers
No waiting in line
Merchants
Cost savings

32. Electronic Data Interchange
Retailer
Supplier
Purchase Order
Eliminates
paper
Saves
time

33. Extensible Business Reporting Language
XBRL is a language that facilitates the
exchange over the Internet of all kinds of
business documents and financial statements.

34. Computer-Integrated Manufacturing
What are the components of a CIM system?
Computer-aided design (CAD) workstations
Real-time production monitoring
and control systems
Order and inventory control system

35. Electronic Payment Systems (EFT)
Electronic funds transfer systems are
electronic payment systems in which
processing and communication are
primarily or totally electronic.
Banks can interface with
corporate EDI applications.

36. Characterize the development of information systems.
Learning Objective 4
Characterize the development
of information systems.

37. The Accountant and Systems Development
Accountants may undertake systems
development activities either
internally or externally.
Systems development activities are
often encountered by internal and
external auditors during reviews
of information systems controls.

38. The Accountant and Systems Development
Systems Development Project:
Systems analysis
Systems design
Systems implementation

39. The Accountant and Systems Development
What are the general objectives
of systems analysis?
To improve the quality of information
To improve internal control
To minimize cost, where appropriate

40. The Accountant and Systems Development
Systems design is the process of
specifying the details of the solution
selected by the systems analysis process.

41. The Accountant and Systems Development
Systems implementation is the process of
placing the revised or newly designed
procedures and methods into operations.
Testing the solution prior to implementation
Documenting the solution
Reviewing the system

42. Systems Approach What is the systems approach?
It is a general procedure for the
administration of a systems project.
Its purpose is to assist in the orderly
development of effective systems.
What are the six steps of the
systems approach process?

43. Systems Approach 1 Statement of system objective(s)
Creation of alternatives 2
Systems analysis 3
Systems design 4
Systems implementation 5
Systems evaluation 6

44. Behavioral Considerations
A new information system
creates new work relationships
among existing personnel.
It creates changes in job content
and perhaps a change in the
formal organizational structure.

45. Behavioral Considerations
The user cooperation needed to operate
the system successfully should be ensured
during the design of a system, not afterward.
A philosophy of user-oriented design fosters
a set of attitudes and an approach to systems
development that consciously considers
the organizational context.

46. End of Chapter 1