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This document provides an introduction to accounting information systems. It defines key terms like accounting, accounting information systems, and accounting systems. It describes the major components of an accounting information system including people, procedures, data, software, IT infrastructure, and internal controls. It also outlines the functional steps to transform data into useful information for decision making. Finally, it discusses the objectives and users of accounting information systems and the roles and responsibilities of accountants with respect to an accounting information system.

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Aira Jaimee Gonzales
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461 views2 pages

AIS Reviewer

This document provides an introduction to accounting information systems. It defines key terms like accounting, accounting information systems, and accounting systems. It describes the major components of an accounting information system including people, procedures, data, software, IT infrastructure, and internal controls. It also outlines the functional steps to transform data into useful information for decision making. Finally, it discusses the objectives and users of accounting information systems and the roles and responsibilities of accountants with respect to an accounting information system.

Uploaded by

Aira Jaimee Gonzales
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Week 1 – INTRODUCTION TO ACCOUNTING INFORMATION SYSTEMS

Key Terms 5. Understandable


Accounting  The quality of information that enables users to
 the principal way of organizing and reporting perceive its significance.”
financial information. It has been called the 6. Verifiable
“language of business.”  The ability through consensus among measurers to
Accounting and Information Systems ensure that information represents what it purports to
 comprise the functional area of business responsible represent or that the chosen method of measurement
for providing information to the other areas to enable has been used without error or bias.”
them to do their jobs and for reporting the results to 7. Accessible
interested parties  Available when needed (see Timely) and in a useful
Accounting System format (see Understandable).
 is used to identify, analyze, measure, record,
summarize, and communicate relevant economic 5 Major Transaction Cycles
information to interested parties 1. Revenue
Information System  Goods and Services are sold for cash
 is a framework in which data is collected, processed, 2. Expenditure
controlled and managed through stages in order to  Purchase of inventory for resale or raw materials
provide information to users which are used in production in exchange for cash or
Accounting Information System future profit
 is a unified structure that employs physical resources 3. Production
and components to transform economic data into  Raw materials are converted into goods
accounting information for external and internal users 4. Human Resources
Value Chain  Employees are hired, trained, paid, evaluated and
 the set of activities a product or service moves along dismissed
before as output it is sold to a customer at each 5. Financing
activity the product or service gains value  Selling of shares to investors, borrowing of money,
System dividend payments and interest payments
 is an entity consisting of interacting parts that are
coordinated to achieve one or more common Components of an AIS
objectives 1. People using the system
Data 2. Procedures and Instructions
 are raw facts and figures that are processed to  for collecting, processing, and storing data
produce information 3. Data
Information 4. Software
 is data that have been processed and are meaningful 5. Information Technology (IT) Infrastructure
and useful to users. The terms “meaningful” and  Computers, peripherals, networks, and so on
“useful” are value-laden terms and usually subsume 6. Internal Control and Security
other qualities such as timeliness, relevance,  Safeguard the system and its data
reliability, consistency, comparability, etc.
Information-Oriented Professionals
AIS Benefits
 an array of professionally trained persons from
1. Improve Quality and Reduce Costs
different fields of study have focused on providing
2. Improve Efficiency
information to users
3. Improve Sharing Knowledge
4. Improve Supply Chain
Functional Steps in Transforming Data into Information 5. Improve Internal Control
Data Collection 6. Improve Decision Making
 capturing, recording, validating and editing data for  Identify situations that require action.
completeness and accuracy  Provide alternative choices.
Data Maintenance/Processing
 Reduce uncertainty.
 classifying, sorting, calculating data
 Provide feedback on previous decisions.
Data Management
 Provide accurate and timely information.
 storing, maintaining and retrieving data
Data Control
 safeguarding and securing data and ensuring the Objectives and Users of AIS
accuracy and completeness of the same 1. Support day-to-day operations
Information Generation  Transaction processing
 interpreting, reporting, and communicating 2. Support Internal Decision-Making
information  Trend Analyses
 Quantitative & Qualitative Data
What Makes Information Useful?  Non-transactional sources
1. Relevant 3. Help fulfill Stewardship Role
 The capacity of information to make a difference in
a decision by helping users to form predictions about Resources Required for an AIS
the outcomes of past, present, and future events or to
confirm or correct prior expectations.” 1. Processor(s)
2. Reliable  Manual or Computerized
 The quality of information that assures that 2. Database(s)
information is reasonably free from error and bias  Data Repositories
and faithfully represents what it purports to 3. Procedures
represent.”  Manual or Computerized
3. Complete 4. Input/output Devices
 The inclusion in reported information of everything 5. Miscellaneous Resources
material that is necessary for faithful representation
of the relevant phenomena.” Reasons for Studying Accounting Information Systems
4. Timely
 Having information available to a decision maker 1. Career accountants will be users, auditors, and developers
before it loses its capacity to influence decisions.” of AIS
Week 1 – INTRODUCTION TO ACCOUNTING INFORMATION SYSTEMS

2. Modern-day AIS are complex because of new technologies


3. Concepts studied in AIS are integrated into every other
accounting course

Roles of Accountants With Respect to an AIS

Financial accountants
 prepare financial information for external decision-
making in accordance with GAAP
Managerial accountants
 prepare financial information for internal decision-
making
Auditors
 evaluate controls and attest to the fairness of the
financial statements.
Accounting managers
 control all accounting activities of a firm.
Tax specialists
 develop information that reflects tax obligations of
the firm.
Consultants
 devise specifications for the AIS.

Ethical Standards for Consulting

1. Professional competence
2. Exercise due professional care
3. Plan and supervise all work
4. Obtain relevant data to support reasonable
recommendations
5. Maintain integrity and objectivity
6. Understand and respect the responsibilities of all parties
7. Disclose any conflicts of interest

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