Ais

Front 1

2 Internal information flows

Back 1

Horizontal Flow of information

Vertical Flow of information

Front 2

Horizontal Flow of Information

Back 2

Used at operations level( capture operation data or transaction)

Front 3

2 types of Vertical Flow of Information

Back 3

Downward Flow

budget, instructions, quotas

Upward Flow

Aggregated operation data or transactions

Front 4

3 Goals of information system

Back 4

Support stewardship function of mgnt

Support mgnt decision making

support day to day operations

Front 5

Information system

Back 5

Set of formal procedures

(which data are collected,

processed into information,

distribute to users)

Front 6

Transaction

Back 6

Event that affects org or affects the interest of the org.

Processed by info system as unit of work

Front 7

2 types of transaction

Back 7

1.Financial

economic events affectassets and equity of org

2. Non-Financial

Front 8

Accounting Information System

Back 8

Identify, collect, process, communicate Economic info about the firm using diff technologies

records financial effects of transaction

Distributes transaction information to operation personnel

Front 9

AIS VS MIS

Back 9

AIS

financial transactions

Nonfinancial transactions that directly affect the processing of financial information

MIS

Nonfinancial transactions normally process by traditional AIS ( custo complaints)

Front 10

AIS subsystem

Back 10

TPS Transaction processing system

support daily operations

GL/FRS General ledger/ Financial reporting system

produces FS

MRS Mgnt Reporting system

produce special purpose report for internal use

Front 11

Data sources

Back 11

Financial transaction enter the info system from internal and external sources

Front 12

2 types of financial transaction

Back 12

External financial transaction

Internal financial transaction

exchange or movement of resources within organization

Front 13

4 Functions of transforming data to information(AIS model)

Back 13

1. Data collection

2. Data processing

3. Data Mgnt

4. Information generation

Front 14

Data collection

Back 14

Capturing transaction data

Recording data onto forms

Validating and editing data

Front 15

Data Processing

Back 15

Classifying

Transcribing

Sorting

Batching

Merging

Calculating

Summarizing

Comparing

Front 16

Data Mgnt

Back 16

Storing

Retrieving

Deleting

Front 17

Info generation

Back 17

Compiling

Arranging

Formatting

Presenting

Front 18

5 Characteristics of useful info

Back 18

Relevance- serves as purpose

Timeliness-no older

Accuracy-Free from material errors

Completeness- All information essential are present

Summarization-aggregated accd to user's need

Regardless of physical form / technology

Front 19

Organizational structure helps to allocate

Back 19

Responsibility

authority

accountability

Front 20

Common method of organizing

Back 20

Segmenting by business function

Front 21

8 Functional Segmentation

Back 21

Materials Mngt

Production

Marketing

Distribution

Personnel

Finance

Accounting

Information Technology

Front 22

Accounting Independence

Back 22

Information reliability requires accounting independence.

1. Accounting activities must be separate of functional areas maintaining resources

2. Accounting support this function but does not actively participate

3. Decision makers of these function requires that vital info will be supplied by independent source to ensure integrity

Front 23

IT Data processing

Back 23

Most companies fall in between

1. Distributed data processing

2. Centralized data processing

Front 24

Distributed data processing

Back 24

Reorganizing the computer services function

into small information processing units

that are distributed to end users and placed under their control

Front 25

Centralized data processing

Back 25

All data processing performed

by one or more large computers( housed at central site)

serves users throughout org

Front 26

Primary areas of centralized data processing

Back 26

database administration

data processing

system development

system maintenance

Front 27

Accountant's role in AIS

Back 27

clearly convey their needs to system's professionals( who designed the system)

actively participate in systems project dev( to ensure appropriate system design)

Front 28

Accountant as system designers

Back 28

1. is a domain experts

responsible for conceptual design of AIS

Front 29

Conceptual system design

Back 29

specifying criteria for :

identifying delinquent customers, info needed to report

Front 30

Domain expert

Back 30

determines the nature of info required

its sources

its destination

accounting rules that need to be applied

Front 31

Accountant as system auditors

Back 31

External(financial audit)

Internal audit

Fraud audit

Front 32

External Financial audit

Back 32

Independent attestation regarding fairness of presentation of FS

Front 33

External audit

2 types of evidence

Back 33

Tests of controls

Substantive test

Front 34

Auditor may not provide

Back 34

1.Bookkeeping or other services

2 Financial info system design and implementation

3. contribution-in-kind reports

4. actuarial services

5. internal audit outsourcing services

6.mgnt function/ human resources

7.broker, investment banking services

8. legal services unrelated to audit

9. service that board determine as impermissible

Front 35

Internal audit

Back 35

independent appraisal function within org to evaluate its activities

diff constituencies from ext. audit

Front 36

Fraud audit

Back 36

Investigation of fraud and gather evidence that may lead to criminal conviction

Front 37

When fraud audit is initiated

Back 37

1. Corp mgnt suspects employee fraud

2. BOD hired fraud auditors to investigate suspected executives

Front 38

Role of Audit Commitee

or special responsibilities regarding audits

Back 38

subcommittee of BOD

1. Independent check and balance for internal audit function

and liason with external auditors

2. usually 3 people(outsiders)

3. SOX requires one to be "financial expert"