Accounting Information Systems

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accounting information system(AIS)

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is a collection of resources designed to transform data into information.

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Whoare the two main usersofaccounting information?

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Externalusers

Internalusersts

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information system

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suggests the use of information technology in an organization.

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Information Systems

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• Electronic Data Processing System (EDP)
  
• Data Processing System (DP)
• Management Information System (MIS)
  
• Decision Support System (DSS)
  
• Expert System (ES)
• Executive Information System (EIS)
  
• Accounting Information System (AIS)
  

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Management Information System

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• Marketing Information System
  
• Manufacturing Information System
  
• Human Resources Information System
  
• Financial Information System
• Customer Relation Management System
  
• Supply Chain Management System
  

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The fundamental benefits of IT are:

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• Automation
• Information Organization
• Communication
  

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Applications Architecture

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involves the process of ensuring the suite of organization’s applications work together as a composite application according to the goals and objectives of the organization.

ex: SCM: MRP, MRP II, CIM, FMS. ERP and ERP II (Collaborative commerce)Enterprise Application Suite (EAS)

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11Basic Business Processes

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• Procurement
  
• Marketing
  
• Inbound/Outbound Sales Logistics
• HumanResources
• Manufacturing
  
• Accounting /Finance
• Sales/Service
  
• R& D/Governance

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BusinessProcess Reference Models

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• ERPFunctional Model
  
• ValueChain Model
• SupplyChain Model
  
• OperationsProcess Model
  
• TransactionCycle Model
  

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TransactionProcessing Cycles

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1.Revenue cycle

2.Expenditure cycle

3.Production cycle

4.Finance Cycle

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InternalControl Process

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• Controlenvironment
  
• Riskassessment
  
• Controlactivities
  
• Informationand communication
  
• Monitoring
  

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Segregationof Duties:

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Noindividual or department shouldcontrolthe accounting recordsrelatingto its own operation

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InternalAuditing:

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It isan independent appraisalactivitywithin the organization.

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End-usercomputing (EUC)

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is the hands-on use of computers by end users. Functionalend users do their owninformationprocessing activities.

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Quick-ResponseTechnology

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Quick-responsesystems are essentialtothe total quality performance(TQP)movement in business.

Hardwareand software standardization

Electronic data interchange (EDI)

Universalproduct code (UPC)

RadioFrequency Identification (RFID)

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LeanManufacturing

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is ageneral class of production improvement principlesthat are based on theToyota Production System (TPS). mainfocus in lean manufacturing is eliminatingwaste and improving thesmoothness of the production flow.

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WebCommerce

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• Salesvia the World Wide Web areanintegral part of the economy
• Whatare some benefits?
• Consumers No waiting in line
• Merchants Cost savings
  

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XBRL

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is a language that facilitates theexchange over the Internet of financial statements.

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ElectronicPayment Systems

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areelectronicpayment systems in whichprocessingand communication areprimarilyor totally electronic.

Bankscan interface withcorporateEDI applications.

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TheAccountant andSystems Development

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Accountantsmay undertake systemsdevelopmentactivities eitherinternallyor externally.

Systemsdevelopment activities areoftenencountered by internal andexternalauditors during reviewsofinformation systems controls.

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SystemsDevelopment Project:

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Systemsanalysis

Systemsdesign

Systemsimplementation

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Whatare the general objectivesofsystems analysis?

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Toimprove the quality of information Toimprove internal control

Tominimize cost, where appropriate

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Systemsdesign

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is the process of specifying the details of the solution selected by the systems analysis process.

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Systemsimplementation

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is the process of placing the revised or newly designed procedures and methods into operations.

Testingthe solution prior to implementation

Documentingthe solution

Reviewingthe system

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systems approach

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• It isa general procedure for theadministrationof a systems project
  
• Itspurpose is to assist in the orderlydevelopmentof effective systems.
  

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Whatare the six steps of thesystemsapproach process?

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• Statementof system objective(s)
  
• Creationof alternatives
  
• Systemsanalysis
  
• Systemsdesign
• Systemsimplementation
  
• Systemsevaluation
  

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BehavioralConsiderations

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• A newinformation systemcreatesnew work relationshipsamongexisting personnel.
• Itcreates changes in job contentandperhaps a change in theformalorganizational structure.
• Theuser cooperation needed to operatethesystem successfully should be ensuredduringthe design of a system, not afterward.

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user-orienteddesign

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fosters a set of attitudes and an approach to systems development that consciously considers the organizational context.

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What are the two basic components of an auditing engagement?

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1. The interim audit

Compliance testing

2. The financialstatement audit

Substantive testing

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Internal Control Evaluation

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Auditorsare typically concerned with theflowof processing and distribution ofdocumentswithin an application system.

Auditorsuse charts to analyze thedistributionof documents in a system.

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Compliance Testing

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requires an understandingof the controls that are to betested.

must have a basic understandingof systems techniques.

input-process-output (IPO)– hierarchy plusinput-process-output (HIPO)– logical data flow diagrams (DFD)

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Working Papers

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These are the records kept by anauditorof the procedures and testsapplied, theinformation obtained, andconclusionsdrawn during an audit engagement.

Required by professional standards

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Whatare some of the systems techniquesusedby auditors to document and analyzethecontent of working papers?on.",

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–internal control questionnaires

–analytic flowcharts

–system flowcharts

–branching and decision tables

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Whatare the three phases of asystemsdevelopment project?

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1.Systems analysis

2.Systems design

3.Systems implementation

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Systems techniques examples:

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Interviewing

Observations

Document reviews

Matrix