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AIS REVIEWER – MIDTERM operates in concert with these business

operations.
*Violet stands for notes*
ensure that AIS is perfect fit sa operations to
CHAPTER 1 – Intro to AIS properly utilize in the business (to get perfect
ELEMENTS IN THE STUDY OF fit of the information system)
ACCOUNTING INFORMATION SYSTEMS Events Processing – Data about these
Technology – Your ability to plan and events must be captured and recorded to
manage business operations depends partly mirror and monitor the business operation.
on your knowledge of the technology To design and use the AIS, an accountant
available. Technology provides the must know what event data are processed
foundation on which AIS and business and how they are processed.
operations rest, and knowledge of sales and purchases – operations must be
technology is critically important to your monitored to generate report and give to the
understanding of the AIS discipline. management to support their decision
must be updated and upgraded and making
accountants under ais should have Management Decision Making –
knowledge to it Information used for a decision must be
Database – To perform analysis, to prepare tailored to the type of decision under
information for management decision consideration
making, and to audit a firm’s financial how to properly document
records, an accountant must be able to
access and use data from public and private System Development Operation – The
databases. information systems that process business
events and provide information for
enhance data base, such as cloud management decision making must be
Reporting – To design reports generated by designed, implemented, and effectively
an information system, the accountant must operated
know what outputs are required or are Communications – To present the results of
desirable. GAAP-based financial statements their endeavors effectively, accountants
are but one example of reporting that will be must possess strong oral and written
considered in our study of AIS. communication skills
provide financial and non-financial report and communicate financial reports to them, focus
must be accurate to ensure that reports are areas help to audit
sound and complete to utilize it in their
business ventures Accounting and Auditing Principles – To
design and operate the accounting system,
Control – means by which we make sure the an accountant must know the proper
intended actually happens accounting procedures and must understand
Business Operations – Organizations the audits to which the accounting
engage in activities or operations, such as information will be subjected.
hiring employees, purchasing inventory, and
collecting cash from customers. An AIS
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Top Technology Initiatives - it broadens your business to reach your

customers
1. Information System Management
2. IT Governance - helps develop system for operations that
3. Business Continuity Management (BCM) will help them expand more
and Disaster Recovery Planning
- connecting individuals to organization
4. Privacy Management – Data Privacy Act
of 2012 as an accountant, he/she must know
5. Business Process Improvement (BPI) internal control, moral obligation and
workflow and process exception alerts lawful obligation we know reasonable
6. Identify and access management assurance: financial reporting based
7. Conforming to assurance and on framework, accurate information,
compliance standards
8. Business Intelligence (BI) internal control - process designed to
9. Mobile and Remote Computing provide reasonable assurance (not 100%
10. Document, Forms, Content and absolute: human error, miscalculations can
Knowledge Management occur) regarding achieving objectives in the
following categories: efficiency and
Three Themes (Introduction) effectiveness of operations, reliability of
financial reporting, compliance w/ applicable
Enterprise systems - Integrate the business
laws and regulations
process and information from all of an
organization's functional areas, such as - detect and prevent errors and fraud
marketing and sales, cash receipts,
purchases, hr, payroll, production and
logistics and business reporting The Sarbanes-Oxley Act of 2002
(Broader kesa sa ERP) (SOX)/ICFR

Enterprise Resource Planning (ERP - search more about this

System) - fall of Enron
- system we know like oracle - SOX 404 -> internal control – top to bottom
- software package that can be used for the - SOX 409 -> disclosures to public on a rapid
core system necessary to support enterprise and current basis of material changes in an
- need na malaman ng mga accountants organization's financial condition – loss ->
mandated si accountant to report to protect
- ex: SAP - pasok mo ang info sa sap (sales, the public
sold, F&B, others), micros fidelo? (may POS
system), (EOD- end of day) - gagawa ng - business -> public co -> provides public FS
report -> one-line anodaw? -> audtor -> reasonable
assurance -> <- management

THE ACCOUNTING INFORMATION

E- Business – appreciation of electronic SYSTEM
networks to undertake business process
between individuals and organizations Systems - set of interdependent elements
that together accomplish specific objectives.
- Electronic -> World Wide Web (WWW) A system must have organization,
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interrelationships, integration, and central management monitors the operations

objectives. process.
Subsystems – parts of system Operation Process - is a system consisting
of the people, equipment, organization,
System versus the subsystems is to describe
policies, and procedures whose objective is
the area of current interest
to accomplish the work of the organization, it
Information System – (or the management typically includes production, personnel,
information system [MIS] – is a man-made marketing and sales, accounting, finance,
system that generally consists of an warehousing, and distribution.
integrated set of computer-based
Management Process - is a system
components and manual components
consisting of the people, authority,
established to collect, store, and manage
organization, policies, and procedures
data and to provide output information to
whose objective is to plan and control the
users.
operations of the organization.
simple information system is directed at the
The three most prominent management
processing of business events.
activities are planning, controlling, and
The IS facilitates these operational functions decision making
and supports management decision making
Management Uses of Information
by providing information that managers can
use to plan and control the activities of the Information System (IS) serves two important
firm. functions w/in an organization
IS may have advanced elements, such as a - can be used as leverage – assists daily
database for storage, and can use decision operation – to improve operational
models to present output information for effectiveness and efficiency. It also mirrors
decision making. and monitors actions in the operations
system by processing, recording, and
Accounting Information System - The
reporting business events.
purpose of this separate AIS was to collect,
process, and report information related to the - to support managerial activities –
financial aspects of business events. The including management decision making.
AIS may be divided into components based
on the operational functions supported, Data Versus Information
these AIS components the AIS business Information - is data presented in a form that
processes or AIS subsystems. is useful in a decision-making activity. It has
value to the decision maker because it
THREE LEGAL COMPONENTS OF A
BUSINESS PROCESS reduces uncertainty and increases
knowledge about a particular area of
Information Process - facilitates operations concern.
by maintaining inventory and customer data
Data - are facts or figures in raw form. Data
and by providing electronic signals (such as
represent the measurements or observations
those used in automated warehouses) and
of objects and events. To become useful to a
paper documents with which to execute
decision maker, data must be transformed
business events, such as shipments to
into information.
customers. It provides the means by which
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Qualities of Information understandable information is presented in a

form that permits its application by the user
- To provide output useful for assisting
in the decision-making situation at hand.
managers and other users of information, an
IS must collect data and convert them into Relevance – Information when capable of
information that possesses important making a difference in a decision-making
qualities. situation by reducing uncertainty or
increasing knowledge for that particular
COBIT APPLICATIONS CRITERIA
decision.
Effectiveness – Information is effective if it
Timeliness – Information that is available to
meets the needs of the information consumer
a decision maker before it loses its capacity
who uses the information for a specific task. to influence a decision.
If the information consumer can perform the
task with the information, then the Predictive Value and Feedback Value –
information is effective. Information quality Improve a decision maker’s capacity to
goals: appropriate amount, relevance, predict, confirm, or correct earlier
understandability, interpretability, objectivity. expectations. Information can have both
types of value because knowledge of the
Efficiency – efficiency relates more to the
outcomes of actions already taken will
process of obtaining and using information.
generally improve a decision maker’s
‘Information as a service’ view. Information
abilities to predict the results of similar future
quality goals: believability, accessibility, ease actions.
of operation, reputation.
Neutrality – or freedom from bias means
Integrity – If information has integrity, then it
that the information is objective.
is free of error and complete. Information
quality goals: completeness, accuracy. Comparability – the information quality that
enables users to identify similarities and
Reliability – often seen as a synonym of
differences in two pieces of information. If
accuracy. Information is reliable if it is
you can compare information about two
regarded as true and credible. Reliability is
similar objects or events, the information is
more subjective, more related to perception, comparable.
and not just factual. Information quality goals:
believability, reputation, objectivity. Validity – Information about actual
authorized events and objects.
Availability – one of the information quality
goals under the accessibility and security Accuracy – the correspondence or
heading. agreement between the information and the
actual events or objects that the information
Confidentiality – corresponds to the
represents.
restricted access information quality goal.
Completeness – the degree to which
Compliance – Information must conform to
information includes data about every
specifications is covered by any of the
relevant object or event necessary to make a
information quality goals, depending on the
decision and includes that information only
requirements. (Goal or requirement of the
once. We use relevant in the sense of all
use of information)
objects or events that we intended to include.
Understandability – enables users to
perceive the information’s significance.
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Documenting Information Qualities monitor the daily functioning of their

operating units.
Matrix - a tool designed to help you analyze
a situation and relate processes to desired Tactical Management – requires
results. information that focuses on relevant
operational units and is more summarized,
broader in scope, and need not be as
Conflicts Among the Information accurate as the information used by
Qualities operations management. Some external
information may be required.
Simultaneously achieving a maximum level
for all the qualities of information is virtually Strategic Management – requires
impossible. In fact, for some of the qualities, information to assess the environment and to
an increased level of one generally requires project future events and conditions. Such
a reduced level of another. information is even more summarized,
broader in scope, and comes from outside
the organization more than does the
Management Decision Making information used by tactical management.

Decision Making - process of making

choices, which is the central activity of all Structured Decisions – are those for which
managemen all three decision phases (intelligence,
Managers - make decisions or choices that design, and choice) are relatively routine or
include what products to sell, in which repetitive. In fact, some decisions are so
markets to sell those products, what routine that a computer can be programmed
organizational structure to use, and how to to make them.
direct and motivate employees. Unstructured Decisions – ex: a manager’s
1. Intelligence. Searching the decision-making process when choosing
environment for conditions calling for what research and development projects to
a decision. undertake in the next year.

2. Design. Inventing, developing,

and analyzing possible courses of Information Qualities and Decision-
action. Making Level
3. Choice. Selecting a course of - e level of the decision maker and the type
action of decision to be made determine the pre-
eminence of certain information qualities.

Management Problem Structure and - Information used for strategic planning

Information Requirements should help managers “see” the future and
thereby assist them in formulating long-term
We should note, however, that current plans.
computer technology facilitates access to
detailed data at all management levels. - The strategic manager may be more
concerned with accuracy than with
Operations Management Level – timeliness.
supervisors use this type of information to
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- The strategic manager prefers an accurate Accountants perform a number of functions

but later quarterly sales report to a daily within organizations, including those of
report with a higher degree of error. controller, treasurer, tax specialist, financial
analyst, cost accountant, general
- Operations management may require both
accountant, and IS and budgeting specialist.
timely and accurate information and may not
In all cases, accountants use the AIS to
be concerned about the predictive value of
perform their functions.
the information
As a User – The accountant may also be
called on to participate in the AIS design
Conclusions about Management Decision process.
Making
As Internal and External Auditors –
- Within the organization, managers can accountants audit the AIS or provide the
secure inputs to their decisions directly from assurance services. They may test the
the environment or from direct observation of system’s controls, assess the system’s
business processes. Managers can also efficiency and effectiveness, and participate
receive information indirectly through the IS, in the system design process.
which retrieves and presents operational and
environmental information.
Enterprise Data – the central repository for
all the data related to the enterprise’s
business activities and resources.

Accountant’s Role in the Current

Business Environment
As a Designer of an AIS - accountant brings
knowledge of accounting principles, auditing
principles, IS techniques, and systems
development methods.
Accountants must answer the ff
questions as Designers

• What will be recorded?

• How will the event be recorded?
• Where will they be stored?
• When will the event be recorded?
• What controls will be necessary to
provide valid, accurate, and complete
records; to protect assets; and to
ensure that the AIS can be audited?
• What reports will be produced, and
when will they be produced?
• How much detail will the reports
include?
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CHAPTER 2 – Enterprise Systems Big Data and business analytics usually go

hand-in-hand, that is, business analytics are
Enterprise Systems – or also known as the applications used for analyzing Big Data.
enterprise-wide information systems and
enterprise information systems – integrate Enterprise Resource Planning (ERP)
and automate business process functionality System – are software packages that can be
and information from all of an organization’s used for the core systems necessary to
functional areas, such as marketing and support enterprise systems.
sales, cash receipts, purchasing, cash
ex: oracle=large, sap=large, lawson=large
disbursements, human resources,
and sme, infor=large,sme,micro, Microsoft
production and logistics, and business
dynamics= sme,micro, sage=sme,micro
reporting (including financial reporting).
- sales marketing -> cash receipts -> Most Common Add on Modules
purchasing -> cash disbursements -> hr ->
production and logistics -> business Customer Relationship Management
reporting software (CRM) – for acquisition; build and
maintain an organization’s customer-related
E-Business – Connecting directly to the database. EX: Microsoft Dynamics CRM,
enterprise systems of business partners, Oracle’s Siebel CRM, SAP CRM, and
such as the vendor that will sell you, office Salesforce CRM = data are collected from
equipment. Completing the business multiple customer interactions, such as the
process by making data available for Web, call centers, field sales, service calls,
management and analysis of the purchase and dealer and partner networks.
and related events.
Controls – where controls might be Customer Self-service Software (CSS) –
implemented within the enterprise system. often an extension of CRM software, allows
For example, by ensuring that proper a customer to inquire, perform a task
approvals are obtained and that the (including make a purchase), or troubleshoot
purchase is within budget, the enterprise problems without the help of the
system reduces the risk that unauthorized organization’s humans.
purchases will be made. like chat support to get what u need in your
sufficient type, like flight accounts – u can
Business Event Example – purchase of select your own flight, mode of connecting
goods or services flights, food etc
Big Data (Gartner) – as “high-volume, high-
Sales Force Automation software (SFA) –
velocity and/or high variety information
automates sales task which CRM does not
assets that demand cost-effective,
such as order processing, contact
innovative forms of information processing
management, inventory monitoring, order
that enable enhanced insight, decision
tracking and employee performance
making, and process automation.”
evaluation. internal control – sila yung
Business Analytics (Gartner) – as nagpoprocess para magtuloy tuloy yung
“solutions used to build analysis models and service (in CSS)
simulations to create scenarios, understand
realities and predict future states.
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Supply Chain Management software Application Program Interface (API) –

(SCM) – helps enable the steps in an which is a means for connecting to a system
organization’s supply chain, including or application provided by the developer of
demand planning; acquiring inventory; and that application.
manufacturing, distributing, and selling the
Enterprise Application Integration (EAI) –
product. EX: Kinaxi’s RapidResponse
chain of activities performed by the
Software
organization to transform inputs into outputs
valued by the customer. EAI can be used to
Product Life-cycle Management software
connect pieces of an enterprise system to
(PLM) – manages product data during a
legacy systems or to add-on modules such
product’s life, beginning with the design of
as CRM software.
the product, continuing through manufacture,
and ending in the disposal of the product at Business Process Management (BPM) – a
the end of its life. concept much larger than systems
during product’s life, beginning – integration that provides a comprehensive
manufacturing – culminating at the end of its method for integrating manual and
life automated internal processes, applications,
and systems, as well as integration to
Supplier Relationship Management external partners and services.
software (SRM) – manages the interactions
with the organizations that supply the goods considers modeling, business process
and services to an enterprise just as CRM automation, management, and optimization
software streamlines the processes between BPM typically consists of the following:
the enterprise and its customers. SRM • A modeling and documentation
functionality includes procurement and environment for business processes. This
contract management. The goal of SRM is to procedure is designed to seek for ways to
reduce product costs and production costs improve the present system in order to boost
and to enhance product quality. efficiency and effectiveness.

maintains supplier’s data – list of credited • Conversion of manual procedures to

suppliers. Helps monitor which supplier is the automated processes, when possible,
best deal. Include contract management and including automation of stages between
procurement external processes and business systems.

Best-of-breed Approach - combines • Implementation of error-prevention data

modules from various vendors to create an entry forms (force needed fields and prohibit
information system that better meets an repetitive data entering) like entering
organization’s needs than a standard ERP erroneously double transactions
system. • A BPM engine that is independent from
Middleware – a software product that the data and business rules on which it
connects two or more separate applications functions, allowing for modifications to
or software modules. Middleware might be those aspects.
used to stitch together a number of legacy • Monitoring of every process activity to
systems, an ERP system, best-of-breed offer visibility into process status and to
applications, and Web-based applications. enable process improvement and
Used to integrate an ERP and third-party optimization
modules.
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Enterprise Systems Value Chain to the open accounts receivable data,

customer needs to call accounting to
Value Chain – a chain of activities performed
approve this order.
by the organization to transform inputs into
outputs valued by the customer. FLOW 8 (credit department) – maybe
company’s policy not to turn down an order
The Value of Systems Integration
for insufficient credit without first checking
The system performs this coordination by with the credit department, without an
sharing data across business processes. integrated system, this requires that
customer call the credit department.
The Problem
The Solution
FLOW 1 (customer service) – When a
customer calls to place and order To integrate the disaggregated processes
into an enterprise system:
FLOW 2 (warehouse) – available to promise
(ATP) FLOW 1 (customer service) – access
customer data
• If the item is on the shelf
FLOW 2 (warehouse) – available to promise
FLOW 3 (factory) – If the item is not on the (ATP) / whether the item is available in any
shelf, the item will be available when warehouses
released from manufacturing, unless that
quantity has been committed to another FLOW 3 (factory) – scheduled to be
customer: In the event that the item is not manufactured
available and must be scheduled for FLOW 4 & 5 (purchasing & vendor) – if
manufacturing, customer needs to know scheduled for manufacture, when it will be
when it can be scheduled and how long the available
manufacturing process will take.
FLOW 6 (marketing) – After the source of
FLOW 4 (purchasing) – depends on the the item is known, the system automatically
availability of the production line and determines the price
personnel, as well as the required raw
materials. FLOW 7 & 8 (accounting & credit
department) – the customer’s
FLOW 5 (vendor)– determine when they can creditworthiness
promise delivery: determined when the item
will be available to ship to the customer. The bottom line is that without integrated
What price will be charged to this customer information systems, organizations have
for this order? difficulty managing on a day-to-day basis and
being successful in the long run.
FLOW 6 (marketing) – the marketing
department may determine prices
dynamically based on customer status,
market conditions, quantity being purchased,
and current manufacturing costs.: After price
has been determined:
FLOW 7 (accounting) – now if the total price
charged for the order falls within this
customer’s credit limit, without direct access
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Enterprise Systems Support for Enterprise Systems Data Facilitate

Organization Purposes Functioning of the Organization’s
Operations
An information system supports the
functioning of an organization in several BASIC TYPES OF DATA
ways.
Master Data – entity-type data
First, it facilitates the functioning of the
Business Event Data – event-type data
organization’s operations.
Second, the information system retains
records about business events that have HIERARCHY OF DATA
occurred.
Character – basic unit of data
Finally, the information system stores data
that is useful for decision making. Field – collection of related characters that
compromise an attribute
Record – collection of related data fields
Capturing Data During Business Events
Table – collection of related records
The data captured as business events unfold
should be sufficient for someone who was
not a party to the event to understand and Enterprise Systems Record That
reconstruct every relevant aspect of what Business Events Have Occurred
happened—whether in accounting,
marketing, human resources, financial As the business event progresses, the
management, manufacturing, or any other information system must capture the
part of the organization. multifaceted data to track the progression of
the process. To capture the sales event, we
FOUR W’s need to record data related to the four Ws
Who – all individuals and/or organizations (capturing data during business events)
that are involved in the event (sometimes
called agents to the event)
Enterprise Systems Store Data for
What – all resources that are exchanged as Decision Making
a result of the event
Depicts a manager using the data collected
Where – locations at which the event takes and stored by the organization’s information
place, exchanged resources reside before system.
and after the event, the agents are during the
event MAJOR ERP MODULES (SAP system)
When – time periods involved in completion Sales and Distribution (SD) – module
of the event, including future exchanges of which contains the related functions to the
resources (like payment of cash for a/r) sales of goods, recording a customer order,
arising from the event shipping of goods to the customer, and billing
the customer; 3 major steps: order entry -
> shipment -> billing
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Materials Management (MM) – module activities in the order entry/sales process, the
which constraint relation functions to the billing/accounts receivable/cash receipts
acquisition oof goods from vendors and process, and the applicable parts of the
management of the goods while they are in general ledger process
stock; 3 major steps: creating purchase
order -> receiving of goods -> recording • STEP 1 – Presales Activities -
the vendor invoice includes responding to customer
inquiries and customers’ RFQs
Financial Accounting (FI) – module which • STEP 2 – Sales order Processing
plays the center and major role in the system, - capturing and recording customer
for which in this module it includes the orders. At this point in the process,
different events from other modules like an enterprise system links together
sales and distribution and materials customer, inventory, purchasing,
management into the general ledger and vendor data to determine
accounts and included in external whether the customer is in good
statements, balance sheet or the statement standing and likely to pay the bill and
of financial position, profit and loss statement where and when the inventory will be
or the income statement and the statement available to send to the customer.
of cash flow • STEP 3 – Pick and Pack - picking
the goods from the shelf in the
Controlling and Profitability Analysis
warehouse and packing the goods
(CO/PA) – module which handles related
for shipment then, ERP System
functions of internal accounting including the
maintain a record of the progress
cost center accounting, profitability analysis
and to retain control over the
for sales, activity-based accounting and
location of the goods.
budgeting
• STEP 4 – Shipping - transferring
Human Capital Management (HCM) – the goods to the organization’s
module which are traditionally known as transportation function, or to a third-
Human Resources or the HR, which includes party carrier, for shipment to the
related functions to the recruitment, customer.
management, and administration of • STEP 5 – Billing - includes
personnel, payroll processing and personnel preparing the customer invoice and
training which includes benefits like travel. recording sales and accounts
receivable data in the general
Enterprise Systems Support for Major ledger.
Business Event Processes
• STEP 6 – Payment - capturing and
major business events into two processes: recording cash receipts and
the order- to-cash (or revenue) process updating cash and accounts
and the purchase-to-pay (or expenditure) receivable amounts in the general
process. ledger.

Order-to-Cash – depicts the order-to-cash

process, which includes the events
Purchase-to-Pay – events surrounding
surrounding the sale of goods to a
the purchase of goods from a vendor, the
customer, the recognition of the revenue,
recognition of the cost of those goods, and
and the collection of the customer payment.
the payment to the vendor. The purchase-to-
The order-to-cash process comprises all
pay process comprises all of the activities in
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the purchasing process, the accounts CHAPTER 3 – Electronic Business (E-

payable/cash disbursements process, and Business) Systems
the applicable parts of the general ledger
process. E-Business – (E-Commerce), basically the
use of electronic networks (including the
• STEP 1 – Requirements Internet) to exchange information and link
Determination - preparing a business processes among
purchase requisition to request the organizations and individuals. Interaction
purchase of goods from a vendor. between a company’s back-office (internal)
enterprise system = quantity-on- processes (for example, distribution,
hand, quantity-on-order, and manufacturing, and accounting) and front-
expected demand. office (external) processes (those that have
• STEP 2 – Purchase order traditionally connected an organization to its
Processing - preparing and customers and suppliers).
recording purchase orders,
enterprise system assists the buyer in Appreciation of electronic networks to
identifying sources of supply for the undertake business process (VALUE
requested item, preparing RFQs to CHAIN) between individuals and
be sent to vendors, analyzing vendor organization
quotations, and selecting vendors by Applying E-Business to the Value Chain –
comparing vendor prices, terms, and Putting stores in different location for you to
past performance (e.g., timely, reach various customers like fast-foods and
accurate deliveries). convenience store.
• STEP 3 – Goods Receipt -
comparing the on-order quantity and - (providing needed products) even not
the quantity received, increasing the physically available now but can be deliver in
quantity-on-hand, creating a record short period of time
of the receipt, and recording the cost - getting the algorithms: (ads) search for your
of inventory in the general ledger. needs/interests like in fb, twitter etc.
ERP System also ensures timely
availability of the goods. Value Chain – Performing Inputs to Outputs
• STEP 4 – Invoice Verification -
Main Structures of E-Business
receiving vendor invoices; three-way
matching of the purchase order, Business-to-Customer (B2C) – goes direct
receipt, and vendor invoice; and to the customer, communication directly
recording accounts payable in the accessing the customer/consumer. You
general ledger. connect to your customer, building trust to be
• STEP 5 – Payment Processing - patronized EX: Amazon (from b2c)
preparing and recording cash
Business-to-Business (B2B) – B2B
disbursements and updating cash
systems are not limited to companies that
and accounts payable amounts in the
sell predominantly over the Internet. B2B is
general ledger.
much bigger than B2C
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The Changing World of Business organizations (e.g., employees, customers),

Processing places (e.g., buildings), and things (e.g.,
accounts receivable, inventory). Master data
Web development tools from their ERP
include such data as the AR master data
vendors to build Web sites that are linked to
(i.e., the AR subsidiary ledger), the customer
the ERP system’s processing and central
master data, and the general ledger master
database
data (i.e., the general ledger)
• Exponential growth in business
processing Information Processing – recording
• Evolution of Business with Internet information from events such as accounting,
manufacturing, and adjusting entries.

Data Maintenance – activities related to

A Comparison of Manual and Automated
adding, deleting, or replacing the standing
Accounting Information Systems
data portions of master data.
Manual Accounting Activities
Standing Data – relatively permanent
• Journalize (recording of transactions portions of master data, such as the credit
in General Journal - a book of original limit for a customer within the customer
entry) master data or the selling price of an item for
• Posting from Journal to Subsidiary an inventory item within the inventory master
Ledger (ex: sales journal) data.
• Posting from Journal to General
Ledger AUTOMATING AN INFORMATION
• Summarizing (Trial Balance, AJE, SYSTEM
FS, Closing Entries)
Automated Accounting Information Batch Processing – aggregation of several
Systems (AISS) business events over some period of time
with the subsequent processing of these data
• Business Event Data Store – as a group by the information system.
transaction file, book of original entry 1. Business Event Occurs
used for recording business events 2. Record Business Event Data
• Update AR Master Data – equivalent 3. Update Master Data
to the posting of business event data 4. Generate Outputs
to the subsidiary ledger activity
• Update GL Master Data – equivalent Periodic Mode – processing mode in which
to the posting of the total from the a delay exists between the various data
journal to the general ledger activity processing steps. EX: payroll
• Preparation of Trial Balance –
equivalent to summarizing the Immediate Mode – data processing mode in
business events by preparing a trial which little or no delay occurs between any
balance activity two data processing steps. EX: ATM

Master Data – are repositories of relatively Online Transaction Entry System (OLTEs)
permanent data maintained over an – use of data entry devices allows business
extended period of time. Master data contain event data to be entered directly into the
data related to entities—persons and information system at the time and place
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that the business event occurs. Such a purpose of supporting management decision
system is considered online because the making and facilitating business event data
data entry device is connected to the processing. EDM systems provide a
computer. relatively inexpensive alternative to paper
documentation.
Instead na magprocess, under OLTE pinag
isa na yung gagawin, malalaman mo agad • Document Storage and Retrieval –
magkano billing mo, then transferred to the mortgages, deed and liens are
main database, then gagana na yung Central archived and made available to the
Computer, malalaman kung may new sales public for such uses as title searches.
ka na. Ni-cut ang three processes into one. birth certificates, death certificates,
marriage licenses, banking-account
Online Real-Time Processing (OLRT) - signature cards, user manuals, price
gather business event data at the time of lists, and catalogs, PDF Files
occurrence, update the master data • Business Event Data Processing –
essentially instantaneously, and provide the loan and insurance applications must
results arising from the business event within pass through several stages, such as
a very short amount of time—that is, in real origination, underwriting, and closing.
time. OLRT systems complete all stages of
business event data processing in Typical benefits of EDM Systems
immediate mode.
• Reduced cost of handling and storing
Nag uupdate agad like GCASH, pay to paper
mobile banking or transfer, Maya but checks • Improved staff productivity
are subject to clearing, automatic na • Superior customer service
maguupdate, nakapost agad, • Enhanced management of
operational workflow
1. Business event occurs; Record • Faster processing
business event data
2. Update Master Data Electronic Data Interchange (EDI) – the
3. Generate Reports (and support computer-to-computer exchange of business
queries) data (i.e., documents) in structured formats
that allow direct processing of those
FOUR METHODS OF CONDUCTING E- electronic documents by the receiving
BUSINESS computer system.
1. Application Software – An
Electronic Mail (E-Mail) – the electronic originating application prepares an
transmission of nonstandardized messages electronic business document, such
between two individuals who are linked via a as a PO. At the destination
communications network (usually an intranet organization, an application
or the Internet). E-mail represents a weak processes the business data.
form for E-business because the message Purchasing which prepares the
format is nonstandardized. electronic document.
2. Translation Software – An
Electronic Document Management (EDM) application’s electronic business
– capture, storage, management, and control document must be translated to the
of electronic document images for the structured EDI format that will be
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recognized by the receiving purchasers and salespeople), coupled with

computer. where in this circle it set the standard implementation of OLTE. This
format using a particular EDI eliminates any risk of erroneous data entry
standard, then creates and EDI from within the selling organization.
envelope which compromise
transaction set and headers. Web Services and Services-Oriented
Architectures
3. Communications Network – which Web Service Definition Language (WSDL
routes the EDI message (the
envelope) to the VAN mailbox. Web Services – a software application that
supports direct interactions with software
4. Value-Added Network Service objects over an intranet or the Internet.
(VAN) – Connects, A VAN service
acts as the EDI “post office.” An Service-oriented Architecture (SOA) –
organization can connect to the VAN refers to well-defined, independent
when it wants, leave its outgoing functions (or applications) that can be
messages, and at the same time pick distributed over a network via Web Services.
up incoming messages from its Essentially plug-and-play components
“mailbox.” A VAN generally operates that are available over the Internet. To be
as a hub by linking many business plug-and-play, they must be for a well-
partners together. defined process, as well as self-contained
and independent of other processes.
which serves as the post office that
logs, translate the message to Internet Commerce – computer-to-
required communication and EDI computer exchange of business event data
standard, if necessary, of course, in structured (such as IEDI) or semi
then, checks for the message structured formats via Internet
integrity such as its completeness communication that allows the initiation and
and authorization. Then, finally consummation of business events. Basically,
routes to appropriate mailbox at the Internet commerce is the process where
same time pick up incoming organizations use technology to conduct
messages from its mailbox. business (usually) without human
Generally, VAN serves as the linkage intervention.
between firms or businesses.
1. Client/Server Relationship –
EDI over the Internet – Internet EDI, use of connection created between the
secure, structured messages over the customer and the vendor is an
Internet to execute business transactions. extended form of client/server
The main difference between traditional and applications.
Internet EDI is the use of a VAN for the Circle 1 (customer) – uses web
traditional method. IEDI takes advantage of browser to access vendor’s webpage
the existence of the Internet virtually Circle 7 (vendor) – application
everywhere in today’s society. program, server, gateway interface

EDI and Business Event Data Processing 2. Network Providers - companies that
– significant reduction in the need for provide a link to the Internet by
interaction between humans (e.g., making their directly connected
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networks available for access by fee- Public exchanges bring together suppliers
paying customers, such as: cable and buyers and allow essentially any
(TV), DSL, direct Ethernet, satellite organization to participate, subject
dish, or the traditional telephone line sometimes to credit approval and
to connect with the network provider’s background checks.
network.
Circle 2 (network provider) –
physical connection to circle 1
Circle 5 (network provider) – server
to connect to CPA firm

3. Assurance Providers – Internet

Assurance, service provided for a
fee to vendors to provide limited
assurance to users of the vendor’s
Web site that the site is in fact reliable
and event data security is
reasonable.
Circle 4 (VeriSign) – WebTrust seal
Circle 6 (CPA or CA firm)

4. Internet Connection – Circle 3

(Internet) – Public network-based
infrastructure

Other Internet Uses of E-Business

Cloud Computing – the use of the Internet

to provide scalable services, such as
software, and resources, such as hardware
and data storage, to users, is increasing in
popularity.

Internet Auction Markets – provide an

Internet base for companies to put products
up for bid or for buyers to put proposed
purchases up for bid.

Internet Market Exchanges – bring together

a variety of suppliers in a given industry with
one or more buyers in the same industry to
provide Internet commerce through
organized markets. Internet market
exchanges can be either private or public.
Private exchanges restrict the buyers and
suppliers that can participate in the market.
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CHAPTER 4 – Documenting Information

Systems