Accounting Information Systems: An Overview

Chapter 1

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

11

Learning Objective 1

Understand AIS and Business Organizations

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

12

Overview
An accounting information system

(AIS) is a collection of resources designed to transform data into information. Accounting information systems perform this transformation whether:
Manual Computerized
2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood
1 3

Information and Decisions

Who are the two main users of

accounting information?
External users: Internal users:
Stockholders Managers at different levels in Investors the organization Creditors Governmental agencies Customers and vendors
2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood
14

Information and Decisions

Hierarchy of Internal Users
Top-Level Management Middle Management Lower-Level Management Strategic Tactical Summarization and Filtration

Operational
Transaction oriented

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

15

Information Qualities

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

16

Information Systems
The term information systems suggests the use of information technology (IT) in an organization to provide information to users.
Hardware and Software
Informatio n

Data

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

17

Types of Information Systems

Electronic Data Processing Systems

(EDP) Data Processing Systems (DP) Management Information Systems (MIS) Decision Support Systems (DSS) Expert Systems (ES) Executive Information Systems (EIS) Accounting Information Systems (AIS)
2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood
18

Learning Objective 2 Understand the development of information system application architecture.

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

19

AIS and Application Architecture

AIS and information technology (IT)

are strongly intertwined. The fundamental benefits of IT are:

Automation Information organization Communication

Applications architecture:

Ensure the suite of organizations

applications work together as a composite application according to the goals and objectives of the organization.
2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood
1 10

AIS and Application Architecture

Evolution of applications architecture:
Earliest focused on automating the traditional

accounting cycle. Eventually shifted to new ways to use computers to enhance functional planning and control: Customer relation management (CRM) Supply chain management (SCM) Material requirements planning (MRP/MRP II) Computer-integrated manufacturing (CIM) Flexible manufacturing systems (FMSs)
2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood
1 11

AIS and Application Architecture

Enterprise Resource Planning (ERP): Emerged as a solution to too-loosely connected functional information systems. ERP II adds collaborative commerce. Enterprise application suite (EAS) replaces one monolithic ERP software package with a group (suite) of individual packages that work closely with each other and run in Web browsers.
2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood
1 12

Learning Objective 3

Understand the related concepts of business processes.

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

1 13

Business Processes

Tasks

Data Organizational Units Logical Time Sequence

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

1 14

Basic Business Processes

Procurement Inbound Sales Marketing Human Resources Accounting

Logistics Manufacturing Operations Outbound Sales Logistics Sales/Services

Finance
Research & Technology

Development Governance
1 15

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

Business Process Reference Models

ERP Functional Model Value Chain Model Supply Chain Model

Operations Process Model

Transaction Cycle Model

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

1 16

The Porter Value Chain Model

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

1 17

Operations Process Model

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

1 18

Transaction Processing Cycles

Revenue Cycle Expenditure Cycle Production Cycle

Finance Cycle

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

1 19

Learning Objective 4

Understand the involvement of Accountants in system development

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

1 20

The Accountant and Systems Development

Accountants may undertake systems

development activities either internally or externally as consultants. The general objectives of systems analysis are as follows: To improve the quality of information To improve internal control To minimize cost, where appropriate These objectives are interrelated and often in conflict so trade-offs must be made.
2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood
1 21

The Accountant and Systems Development

The systems approach is a general

procedure for the administration of a systems project and consists of six steps: 1. Statement of system objective(s) 2. Creation of alternatives 3. Systems analysis 4. Systems design 5. Systems implementation 6. Systems evaluation
2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood
1 22

Behavioral Considerations
A new information system creates new work

relationships among existing personnel, changes in job content, and perhaps a change in organizational structure.
Related technical, behavioral, situational, and

personnel factors should be considered. User cooperation is needed to operate the system successfully and should be ensured during the system design, not afterward. Users should be involved in the design of applications.
2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

1 23

End of Chapter 1

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

1 24