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23 Cards in this Set

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Accounting Information Systems

systems that record, process, and reports on transactions to provide financial and non-financial information to make decisions and have appropriate levels of internal controls for those transactions

Attributes of Useful Information

Relevance and Reliability

3 Characteristics of Relevance

a. Predictive Value ( helps with forecasting the future)

b. Feedback Value (corrects or confirms what had been predicted in the past)

c. Timeliness (available when needed or in time to have an impact on a decision)

3 Characteristics of Reliability

a. Verifiable (can be confirmed by an independent party)

b. Representational faithfulness (reports what actually happened)

c. Neutrality (information is not biased)


Simply raw facts that describe the characteristics of an event, that in isolation, have little meaning


data organized in a meaningful way to be useful to the user

Information overload

the difficulty a person faces in understanding a problem and making a decision as a consequence of too much information

Information value chain (definition)

the overall transformation from a business need and business event to the collection of data and information to an ultimate decision

Information value chain (parts)

Business Need/Event > Data > Information > Knowledge > Decision

discretionary information

Managerial accounting information generally produced for internal information purposes and is not required by law to be provided to management

Mandatory Information

Financial and tax accounting information produced for external information purposes such as for investors, banks, financial analysis, IRS

Specific Accounting Roles in AIS

1. User (inputting data, calculating costs of products, using anti-virus software to protect system, etc.)

2. Manager

3. Designer

4. Elevator (IT auditor, assessor of internal controls, tax adviser, consultant, etc.)

Certified Information Systems Auditor

Perform IT audits to evaluate the accounting information systems' internal control design and effectiveness.

Certified Information Technology Professional

CITPs may help devise a more efficient financial reporting system, help the accounting function go paperless, or consult on how an IT function may transform the business

Certified Internal Auditor

Only designation that is globally accepted for internal auditors and is the standard to demonstrate their competency and professionalism in the internal auditing field.

business value

all the items, events, and interactions that determine the financial health and/or well-being of the firm

value chain

chain of business processes for a firm

Primary activities of value chain

1. inbound logisitics - activities associated with receiving and storing raw materials

2. operations - activities that transform inputs into finished goods

3. outbound logistics - activities that warehouse and distribute finished goods.

4. marketing and sales activities - identify the needs and wants of customers

5. service activities - provide the support of customers after the products are sold to them

Supporting activities of Value Chain

1. firm infrastructure - all the activities needed to support the firm (accounting, legal, etc.)

2. human resource management - recruiting, hiring, training, paying employees

3. Technology - all of the technology necessary to support value-creating activities

4. Procurement - activities involve purchasing inputs such as raw materials, supplies, and equipment

AIS can add value by

1. helps firm infrastructure by giving management valuable information

2. help provide internal controls

3. help produce external and internal reports efficiently

4. supports the human resource function by assisting employees

5. assists procurement by improving the effectiveness and efficiency of the supply chain

Enterprise System

a centralized database that collects data from throughout the firm. Includes data from orders, customers, sales, inventory, and employees

Supply Chain

refers to the flow of materials, information, payments, and services, from raw material suppliers, through factories and warehouses, all the way to the final customers of the firm's products

strategic roles for technology

1. Automate (lowest) - replace human labor

2. informate-up - provide information to senior management

3. informate-down - provide information to employees across firm

4. Transform (highest) - fundamentally redifine business processes and relationships