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CA51013 Module 1 Part 1 (PDF of

This document provides an overview of accounting information systems from an accountant's perspective. It discusses key concepts such as the role of accountants in providing financial information to organizations, the characteristics of useful information, and the functions of common AIS subsystems like the transaction processing system and general ledger/financial reporting system. It also describes how data is transformed into information through processes like collection, processing, management and generation within the general AIS model.

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81 views28 pages

CA51013 Module 1 Part 1 (PDF of

This document provides an overview of accounting information systems from an accountant's perspective. It discusses key concepts such as the role of accountants in providing financial information to organizations, the characteristics of useful information, and the functions of common AIS subsystems like the transaction processing system and general ledger/financial reporting system. It also describes how data is transformed into information through processes like collection, processing, management and generation within the general AIS model.

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CA51013

IT APP TOOLS
IN BUSINESS
I. PUNSALAN
MODULE 1
Introduction to AIS
ACCOUNTANT’S
PERSPECTIVE
ACCOUNTANT’S PERSPECTIVE
The purpose of this module is to
place the subject of AIS in
perspective for accountants. The
accounting plays an important
roles as purveyor of financial
information for the rest of the
organization.
CAN YOU THINK OF
SCENARIOS WHERE
ACCOUNTANTS ACT AS
PURVEYOR OF FINANCIAL
INFORMATION TO THE
ORGANIZATION?
INFORMATION
ENVIRONMENT
WHAT IS INFORMATION?
Information is a business resource that:

Needs to be Is vital to the survival


appropriately of contemporary
managed business
PREVENT
DECISION-MAKING
UNNECESSARY ACCESS

MAINTAIN RELIABILITY REPORTING PURPOSES


FUNDAMENTAL OBJECTIVES OF
INFORMATION COMMON TO
ALL ORGANIZATIONS

Support the firm’s Support Support the


day-to-day management stewardship function
operations decision making of management
OPERATIONAL STRATEGIC VALUATION
INTERNAL AND EXTERNAL
INFORMATION FLOWS
Top Stakeholders
Management

Middle Management

Operations Management

Operations Personnel
Customers Day-to-Day Operations Suppliers
WHAT IS
INFORMATION
SYSTEM?
WHAT IS
INFORMATION
SYSTEM?
A system is a group of
interrelated multiple components
or subsystems that serve a
common purpose.
WHAT IS
INFORMATION
SYSTEM?
The information system is the set
of formal procedures by which
data are collected, processed into
information, and distributed to
users.
A FRAMEWORK FOR INFORMATION
SYSTEMS
Information System (IS)

Accounting Information Management Information


System (AIS) System (MIS)

General Ledger/Financial Financial Management


Reporting System (GL/FRS) Systems

Transaction Processing System


Marketing Systems
(TPS)

Management Reporting
Distribution Systems
System (MRS)

WHAT IS THE DIFFERENCE BETWEEN AIS AND


Human Resource Systems
MIS?
AIS versus MIS

▸ AIS processes:
▸ financial transactions;

e.g., sale of goods


▸ and nonfinancial
transactions that directly
affect the processing of
financial transactions;
e.g., addition of newly
approved vendors
AIS versus MIS

▸ MIS process:
▸ nonfinancial transactions

that are not normally


processed by traditional
AIS; e.g., tracking
customer complaints
PROCESSING OF INFORMATION

INPUT PROCESS OUTPUT

Transactions Information
(Financial Information
and non- System User
financial) Decision
AIS SUBSYSTEMS

TPS GL/FRS
Transaction Processing General Ledger/Financial
System Reporting System
supports daily business produces financial
operations statements and reports

MRS
Management Reporting
System
produces special-
purpose reports for
internal use
THE GENERAL AIS MODEL
DATA SOURCES

Data sources are financial transactions that


enter the information system from internal
and external source.

▸ External financial transactions are the


most common source of data for most
organizations.

▸ Internal financial transactions involve the


exchange or movement of resources
within the organization.

INPUT
TRANSFORMING THE DATA
INTO INFORMATION

Functions for transforming data into


information according to the general AIS
model:

▸ Data Collection
▸ Data Processing
▸ Data Management
▸ Information Generation

PROCESS
DATA COLLECTION
Capturing transaction data

Recording data onto forms

Validating and editing the data


DATA PROCESSING
Classifying Merging

Transcribing Calculating

Sorting Summarizing

Batching Comparing
DATA MANAGEMENT
Storing

Retrieving

Deleting
INFORMATION GENERATION
Compiling

Arranging

Formatting

Presenting
CHARACTERISTICS OF USEFUL
INFORMATION

Regardless of physical form or technology,


useful information has the following
characteristics:

▸ Relevance
▸ Timeliness
▸ Accuracy
▸ Completeness
▸ Summarization

OUTPUT
ORGANIZATIONAL
STRUCTURE
ORGANIZATIONAL
STRUCTURE
The structure of an organization
helps to allocate responsibility,
authority, and accountability.

Segmenting by business function


is a very common method of
organizing.
WHAT DO WE WANT TO ACHIEVE IN
ESTABLISHING THE STRUCTURE OF
THE ORGANIZATION?
ACCOUNTING INDEPENDENCE
▸ Information reliability requires
accounting independence.
▸ Accounting activities must be
separate and independent of
the functional areas
maintaining resources.
▸ Accounting supports these
functions with information but
does not actively participate.
▸ Decisions makers in these
functions require that such
vital information be supplied
by an independent source to
ensure its integrity.
REFERENCES
Accounting Information Systems by James Hall

Shelly Cashman Series Microsoft Office 365 &


Office 2019 by Sandra Cable

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