ACCOUNTING INFORMATION SYSTEM and the Accountant “The challenge for accountants is to determine how best to

LESSON 1 provide the information required to support business and

government processes.

The essence of what AISS ARE: Information (versus Data)

1. Collections of raw and stored data (inputs)
2. Processing methods (procedures’)  Data (the plural of datum) are raw facts about events that
3. Information (outputs) have little organization or meaning. To be useful or
meaningful, most data must be
Accounting Information Systems—Definition
- Accounting Information System is a collection of data and  Information are considered as processed data.
processing procedures that creates needed information for
its users.
“Do raw data have to be processed in order to be
meaningful?
 Not necessarily
It just happens that data should be processed using AIS for
the benefit of most of it’s users

AUDIT TRAIL
- the path that data follow as they flow through an Accounting
Information System.

Information System Components

• Inputs
 Data/Information from Internal/ External Sources
• Processes
Accounting field includes:  Sort
1. Financial Accounting  Organize
2. Managerial Accounting  Calculate
3. Auditing • Outputs
4. Taxation  Information for Internal/External Decision Makers

PROBLEMS & LIMITATIONS OF COMPUTERS

 1. Their ability to output vast amounts of information quickly. Financial Accounting Information Systems provides relevant
2. Computers do not automatically catch the simple input information to individuals and groups outside an organization’s
errors that humans do. boundaries.
3. They make audit trails more difficult to follow. This is
because the path that data follow through computerized Inclusion of Nonfinancial Data
systems is electronic, not recorded on paper. Resource Events and Agents (REA) accounting—the idea of also
storing important nonfinancial information about resources, events,
SYSTEMS and agents in databases precisely because they are relevant to the
 Within the accounting profession, the term ‘‘systems’’ decision-making processes of their users.
usually refers to ‘‘computer systems.’’
 Not all Accounting Information Systems are computerized. Real-Time Reporting
With advances in IT that allow transactions to be captured
immediately, accountants and even the AIS itself can produce
ACCOUNTING INFORMATION SYSTEMS financial statements almost in real-time.
- AIS can be conceptualize as a set of components that
collect accounting data, store it for future uses, and Interactive Data
process it for end users. Interactive data are data that can be reused and carried seamlessly
among a variety of applications or reports.
Accounting Information Systems and Their Role in Organizations
- Information technology (IT) refers to the hardware, Managerial Accounting
software, and related system components that Financial Accounting Information Systems The principal objective
organizations use to create computerized information of managerial accounting is to provide relevant information to
systems. organizational managers—that is, users who are internal to a
company or government agency.
Knowledge Workers
They are the ones who produce analyze, manipulate, and distribute Cost Accounting
information about business activities. The cost accounting part of managerial accounting specifically
assists management in measuring and controlling the costs
IT associated with an organization’s various acquisition, processing,
• Taxation distribution, and selling activities.
• Auditing
• Managerial Accounting
• Financial Accounting Budgeting
A budget is a financial projection for the future and is thus a
Financial Accounting valuable managerial planning aid.
Because managers use budgets to predict future financial
expectations, they can compare the causes of significant variations
between actual and budgeted results during any budget period.

Auditing
The traditional role of auditing has been to evaluate the accuracy
and completeness of a corporation’s financial statements.
Risk Assessment
Business Performance Measurement
Information Systems Reliability
Electronic Commerce

Taxation
E-Filing and Payment System (eFPS) of the BIR
- This software facilitates the on-line filing and payment of different
tax returns that are required for each of the taxpayers in the
Philipines.

CAREERS IN Accounting Information Systems

Systems Consulting
 A consultant is an outside expert who helps an organization
solve problems or provides technical expertise on an issue.

 Systems consultants provide help with issues concerning

information systems.
 Certified Accounting Technician (CAT)
Certified Fraud Examiner
 Forensic accounting is the use of accounting to investigate
fraud or embezzlement and to analyse financial information
for use in legal proceedings.
 Association of Certified Fraud Examiners (ACFE)
Information Technology Auditing and Security
 Information technology (IT) auditors concern themselves
with analyzing the risks associated with computerized
information systems.
Information Technology and Accounting Information Systems
LESSON 2 Input Devices
Input is the starting point of the input-processing-output
cycle.
Components of information system  AISs require input methods and procedures that ensure
(1) Hardware (2) Software (3) Data (4) People (5) Procedures complete, accurate, timely, and cost-effective ways of
gathering and inputting accounting data.
Information System Process
• INPUT – Process - Output Source Document - the starting point for collecting
accounting data in many AISs
Four classification of pheriperal equipment of a computer  Manual examples include time cards, survey forms,
1. INPUT EQUIPMENT employee application forms, purchase invoices, sales
- enable users to enter data into a computer system, invoices, cash disbursement vouchers, and travel
2. OUTPUT EQUIPMENT reimbursement forms.
- enable users to see processed results,  Computerized examples include airline reservation screens,
3. SECONDARY STORAGE DEVICES bank deposit screens, and Web-based customer-order
- enable users to store data for future reference, forms.
4. COMMUNICATIONS EQUIPMENT
- enable users to transmit data over data networks. Point Of Sale (POS) Devices - equipment that capture all
information about the sales at the time the sales happened.
INPUT, PROCESSING, AND OUTPUT DEVICES
 Smart Cash Registers
 Bar Code Readers
 POS Machines

Magnetic Ink Character Recognition (MICR) -

pioneered by the Banking Industry is a magnetically-
encoded paper, of which characters can be read by a
machine.

Optical Character Recognition (OCR) - uses optical,

rather than magnetic, readers to interpret the data
found on source documents.
  OCR devices use light-sensing mechanisms and laser  Primary Memory stores data and program instructions
technology to perform the character recognition function. temporarily for immediate processing and execution.
Biometric scanners - authenticate users based on who they  In microcomputers, this primary or Random-Access
are. Memory (RAM) consists of individual bytes, each capable of
I. Behavioral systems recognize signatures, voices, or storing a single character of data
keystroke dynamics.  RAM capacities are typically measured in gigabytes (billions
II. Physiological systems recognize fingerprints, irises, retinas, of bytes).
faces, and even ears.  Microprocessor performs through manipulation of data or
execution of instructions directly in primary memory.
Microcomputer Input Devices  The Arithmetic-Logic Unit (ALU) portion of these
 Many specialized devices now help users input data into microprocessor chips performs arithmetic tasks as well as
their microcomputers. logic tasks.
 Keyboards, Mouse, Touch Pads, Joy Stick, Touch Screens,  The Control Unit of the processor supervises the actual data
Web cams, Stylus. processing.

 Computer processing speeds are typically measured in

Information System Process megahertz (MHz or millions of computer clock cycles per
• Input – PROCESS - Output second).
 Designers of accounting applications must look elsewhere
Central Processing Units for ways to speed computer Throughput—that is, the time
it takes to process business transactions such as payroll time
cards.

Information System Process

• Input – Process - OUTPUT

Output Devices
 Printed/Hard-copy output
 Soft-Copy Output
 Video Output
 Audio Output
 File Output
 Printers - produces physical/hard-copy outputs from the Multimedia
processed data/information.  Multimedia combines video, text, graphics, animation, and
1. Dot Matrix Printers sound to produce multidimensional output.
2. Ink Jet Printers  Multimedia presentations also require advanced processor
3. Laser Printers chips, sound cards, and fast video cards to work properly.

Dot Matrix Printers

 are impact printers that employ tiny wires in a print head to  Primary memory is volatile memory, memory that loses its
strike an inked ribbon and create tiny dots on a print page. contents when electrical power is lost.
 Secondary Storage also called mass storage or auxiliary
Ink-jet printers storage includes:
 create characters by distributing tiny bubbles or dots of ink 1. Magnetic Hard Disk
onto pages. 2. Floppy Disk
 The print resolutions of these printers (commonly measured 3. CD-ROMs
in dots per inch or dpi) tend to be higher than dot-matrix 4. DVD disks
printers, while printing speeds (commonly measured in 5. Blu-Ray discs
pages per minute or ppm) tend to be lower than laser 6. Flash drive
printers.
DATA COMMUNICATION AND NETWORKS
Laser printers Data communications refers to transmitting data to and
 create printed output in much the same way as duplicating from different locations.
machines.  Many accounting applications use data communications in
 Print quality is usually superior and output speeds are much normal business operations.
faster. A communication channel is the physical path that data
take in data transmissions.
Video Output  Examples include
1. Twisted-pair wires
 The monitors of most netbook, laptop, and desktop 2. Coaxial cables
computers use flat-panel, liquid crystal display (LCD) or 3. Optical fibers
plasma screens to create video outputs in the same way 4. Microwaves
that televisions do. 5. Radio Satellite waves
 The picture elements (pixels) in both types of screens are
tiny, discrete dots of color that are arranged in a matrix.  To transmit data over these communications channels, the
 Super video graphics adapter (SVGA) refers to a pixel digital pulses of the sending computer must be translated
matrix of about 1200 (in width) by 800 pixels (in height).
 into the sound patterns, light pulses, or radio waves of the  Wi-Fi devices use Wireless Application Protocol (WAP), a
communications channel. set of communication standards and wireless markup
 Over voice-grade telephone lines, this translation is language.
performed by a modem (‘‘modulator-demodulator’’).
Two important types of wireless communications are
LOCAL AND WIDE AREA NETWORKS 1. RFID applications
Local Area Networks (LAN) - consists of microcomputers, 2. NFC communications.
printers, terminals, and similar devices that are connected
together for communications purposes. Radio frequency identification (RFID)
- is a form of wireless communication that incorporates the
 Most LANs use file servers to store centralized software and use of electromagnetic or electrostatic coupling in the
data files and also to coordinate data transmissions among radio frequency portion of the electromagnetic spectrum
the other LAN devices and users. to uniquely identify an object, animal or person.
 Passive RFID tags have no power source (and therefore
Wide area networks (WANs) - area networks (WANs) are cannot wear out) but can nonetheless ‘‘answer’’ inquiries
computer networks spanning regional, national, or even from energized sources.
global areas.  Active RFID tags are actually chips with antennas, have
 WANs typically use a multitude of communication channels their own power source, enjoy ranges of more than 100
for this purpose, including leased phone lines, microwave meters, and are generally more reliable than passive tags.
transmitters, and perhaps even satellite transmissions.
Near field communication (NFC)
Wireless Data Communications - is a short-range high frequency wireless communication
 The term wireless communications, also called Wi-Fi (for technology that enables the exchange of data between
‘‘wireless fidelity’’), means transmitting voice-grade signals devices over about a 10 cm distance.
or digital data over wireless communication channels. 1. active (bidirectional),
 Wi-Fi creates a wireless Ethernet network using access hubs 2. passive (one way), and
and receiver cards in PCs, cell phones, and PDAs, thereby 3. transponder (battery-less and therefore powered only
turning cell phones and similar wireless devices into by an external communication source)
cordless, multifunction ‘‘web appliances.’’ CLOUD COMPUTING
 The two key dimensions of Wi-Fi applications are  The term cloud computing refers to a range of computing
Connectivity & Mobility. services on the Internet.
 Connectivity advantage means the ability to connect to the  It is the delivery of computing services—including servers,
Internet, LAN, or WAN without physical wires or cables. storage, databases, networking, software, analytics, and
 intelligence—over the Internet (“the cloud”) to offer faster 3. Accounting Software
innovation, flexible resources, and economies of scale.
4. Communications Software
 On-line business softwares. 
5. Enterprise Resource Management (ERP)

COMPUTER SOFTWARE
 Software is a program that enables a computer to perform
a specific task, as opposed to the physical components of
the system (hardware).

Types:
1. Operating Systems
2. Application Software

 An Operating System (OS) is a set of software programs that

helps a computer, file server, or network run itself and also
the application programs designed for it.
 An Application Software refers to computer programs that
help end users such perform the tasks specific to their jobs
or relevant to their personal needs.
 The utility programs that come with operating systems help
users perform tasks such as copying files, converting files
from one format to another, compressing files, performing
system diagnostics, and building disk directories.
 Virtual Storage—that is, disk memory that a computer
system uses to augment its limited primary memory and
secondary memory.
APPLICATION SOFTWARE TYPES

1. Personal Productivity Software

2. Business Productivity Software

DATA MODELING
LESSON 3