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The document discusses the components of an accounting information system, including inputs such as sales orders and invoices, processes like data validation, and outputs like profit reports. It differentiates between data and information, explaining how raw data can be transformed into meaningful information through analysis. Additionally, it outlines the various uses of accounting information by different stakeholders and compares the evolving role of accountants from managing both accounting and information functions to focusing primarily on accounting due to technological advancements.

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4 views2 pages

Ba937soln 1

The document discusses the components of an accounting information system, including inputs such as sales orders and invoices, processes like data validation, and outputs like profit reports. It differentiates between data and information, explaining how raw data can be transformed into meaningful information through analysis. Additionally, it outlines the various uses of accounting information by different stakeholders and compares the evolving role of accountants from managing both accounting and information functions to focusing primarily on accounting due to technological advancements.

Uploaded by

AAA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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DISCUSSION QUESTIONS

1.1 Describe some inputs, processes and outputs of an accounting information


system.

Inputs: Sales order (record purchase requests from customers), purchase data (data
about purchases initiated with our vendors), Receiving data (data about arriving
goods), shipping data (data about goods sent to customers), invoices (received from
vendors)

Processes: Check data is valid, sort data, manipulate data

Outputs: Invoice (sent to customer), cheque (sent to vendor), profit and loss report,
accounts receivable report

1.2 What is the difference between data and information?

Data are the raw facts relating to or describing an event. For example, data relating to
a sale could include the customer’s name, address, salesperson ID, the sale number,
sale date, items purchased, quantity purchased and so on. On its own this data is not
all that useful. However, through the application of rules and knowledge the data can
be made meaningful, thus converting it to information. For example, the collection of
data relating to sales may be summarised into sales by customer or sales by product,
to provide information about high spending customers or slow moving products.

1.3 What are some of the uses of accounting information? Provide five examples
of how accounting information may be used and who it would be used by.

The table below provides some typical examples of how accounting information may
be used.
USER USES OF ACCOUNTING INFORMATION
Shareholder Uses the general purpose financial reports to assess the performance of
the company they have invested in, assessing both historical
performance and using the historical information to make predictions
about future performance.
Managers Are commonly exposed to bonus schemes that are based on profit
levels or other financial performance indicators. Thus managers have
accounting information being used as a performance assessment
device.
Union May use financial reports of companies – particularly profit
information – to substantiate claims for higher wages for union
members.
Bank Will look at financial performance and financial position information
when assessing credit worthiness of loan applicants.
Suppliers A company’s suppliers may wish to view financial information before
entering in to long term supply agreements, in order to ensure that the
company is able to meet the terms of the agreement and pay for the
supplies that are purchased.
1.6 Compare the role of the accountant today to his or her role before the
introduction of computer technology. How have the responsibilities and duties
changed over time?

The discussion of this question can be tied in to the discussion in question 1.4. What
becomes evident from the historical discussion of the evolution of the accounting and
information systems function is that the accountant has gone from being responsible
for both the accounting function and the information management function associated
with accounting, to just being responsible for the accounting function and the
technically qualified personnel, who do not necessarily have accounting skills, have
become responsible for the information storage function associated with accounting.
In a sense, the responsibilities of the accountant have been reduced, since they have
lost direct control of the information storage function associated with the accounting
discipline. Some may also argue that this shift has created a greater need for
accountants to be trained not just in the technical skills of accounting but also in skills
of information management, for example information systems.

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