Excel-Based AIS

Accounting Information System- there are several components working interdependently following a pre-defined process
that includes specific tasks progressing towards a common goal which is to provide financial information needed by the
management to make important economic decision.
-is usually surround by subsystems that processes financial and non-financial transactions that directly
affect the processing of financial transactions. (Ex. Updating char of accounts)

3 Major Subsystems
1. Transaction Processing System (TPS)- supports daily business operations with numerous reports, documents, and
messages that can be seen on the monitor throughout the organization. (Built to be robust, highly reliable, available, and
user friendly.)
2. General Ledger Financial Reporting System (GL/FRS)- produces the traditional financial statements(income
statement, balance sheet, cash flows, tax returns, etc.)
3. Management Reporting System (MRS)- provides internal management with special purpose, financial reports, and
information needed for decision making such as budgets, variance report, and responsibility reports.

AIS MIS
- - often requires information that goes
beyond the capability of AIS.
-processes financial transactions -processes non-financial transactions
traditionally processed that are not normally processed by
traditional AIS
Legal and Regulatory Non-Legal:
 PFRS  Capital Budget System
 Sarbanes-Oxley  Market Analysis
 SEC and BIR  Delivery Scheduling

Why is it important to distinguish between AIS and MIS?

Because of the highly integrative nature of modern information system, management and auditors need a conceptual view of the
information system that distinguishes key processes and areas of risk and legal responsibility from the other non-legal binding
aspects of the system.

3 Major Stages Within the AIS

1. Data Collection- collect data from various sources, primarily from transactions processing system TPS. Its main purpose is to
ensure that data entering the system are and free from material errors. (Most important stage)
2 Rules:
A. Relevance- only data that ultimately contribute to information are considered
B. Efficiency- collect data only once.

Data Information
-facts which may or may not be - determined by the effect it has on the
processed. user not by its physical form
-no direct effect to user . -causes action to user that he or she
could not have taken.(doing nothing is
also an action)

2. Data Processing- task range from simple to complex depending on how the system is designed.
 Processing- means editing, summarizing or refining to produce information
 Date-Based Management- important task related to data management. It is the physical repository for
financial and non-financial data (can be a filing cabinet or CD)
Data Hierarchy
a. Attribute- most elemental piece of potentially useful data in the data base. It is a logical and relevant
characteristic of an entity about which the firm captures data.
 The addition of irrelevant data would not enhance the information content
 The absence of any single relevant attribute diminishes or destroys the information content of the set.
 b. Record- is a complete set of attributes for a single occurrence within an entity class. (Every record must be
unique even in a single attribute)
c. File- is a complete set of records of an identical class.

3 Fundamental Task of Data Management as Part of Data Processing

i. Storage- assign keys to new records and store them in their proper location
j. Retrieval- the task of locating and extracting an existing record from the database for processing. After processing,
the storage task restores the updated record to its place in the database
k. Deletion- task of permanently removing obsolete or redundant record in the database.

3. Information Generation- the process of compiling, arranging, formatting, and presenting information to users. It can he an
operational document such as sales order, structured report, or message in the computer screen.
Characteristics
a. Relevance- contents of a report or document must serve a purpose.
b. Timeliness- dictates that the age of information is a critical factor in determining its usefulness.
c. Accuracy- information must he free from material error. However, materiality is a difficult concept to
quantify so in some cases information must be completely accurate.
d. Completeness-no piece of information essential in decision making should he missing
e. Summarization- aggregation in accordance with the user’s needs

Feedback- a form of output that is sent back into the system as a source of data, maybe internal or external. It is used to alter a
process.

AIS OBJECTIVES
 To support stewardship function of management
Stewardship- refers to management responsibility to properly manage and utilize the resources of the firm.
 To support management decision-making
The information system supplies the managers the information they need to carry out their decision making responsibilities
 To support the firm’s day-to-day operations
The information system provides information to operational personnel to assist them in the efficient and effective discharge
of their daily task.

Simulation of an Excel-Based AIS

1. Chart of Accounts- one of the reference files maintained by the AIS subsystems which help to ensure that the system parameters.
System Parameters- are rules built in the system which makes transactions accurate.
Attributes:
a. Account Offset (ACCT_OFFSET)- the default offset account use when no other account was specified by the source TPS.
b. Account Normal Balance (ACCT_BAL)- if 1, normal balance is debit. If -1, normal balance is credit. These parameters are
use when summarizing transactions from the source TPS

2. Balance Sheet-
3. Current- is a simulation of the data from the TPS.
a. Current Source (CUR_SRC)- name of the TPS
b. Current Key (CUR_KEY)- unique ID
c. Current Date (CUR_DATE)- date
d. Current Source Document (CUR_SDOC) & Current Reference Document (CUR_RDOC)-
e. Current Description (CUR DESC)- short description of transaction
f. Current Amount (CUR_AMT)- amount of the transaction
g. Current Debit (CUR_DR)- account code for debit entry
h. Current Credit (CUR_CR)- account code for credit entry
4. Summary- simulation of the manual ledger
 ACCT_ID- account copied from COA
 ACCT_NB- normal balance indicator
 ACCT_BEG- beginning balance from the last period
 ACCT_TDR- total debits
 ACCT_TCR- total credits
 ACCT_END- ending balance of each account after considering the beginning balance, total credits and total debits.

5. Worksheet (WS)- it represents the counterpart papers like columnar worksheet.
 6. Income Statement (IS)
7. Statement of Changes in Equity (SCE)
8. Balance Sheet End (BSend)

Importing Transactions
1. Go to current worksheet
2. Position the cursor
3. Click on data; get external data from text
4. Choose one file
5. Click import

Processing Controls
 Batch Processing- transactions are group in batches depending in the number of transactions. They are divided in to chunks
named batch files