WHAT IS AN AIS?

(Romney,
Steinbart)

An AIS is a system that collects,

records, stores, and processes
data to produce information for
decision makers.
Technology is simply a tool to
create, maintain, or improve a
system.
Accounting Information Systems 11th Edition by Romney, Steinbart

WHAT IS AN AIS?
(Simkin, Rose, Norman)

Is a collection of data
and processing
procedures that
creates needed
information for its
users.
Accounting Information Systems 12th Edition by Smkin, Rose, Norman

WHAT IS AN AIS?
(Hurt)

Is a set of interrelated
activities, documents, and
technologies designed to
collect data, process it, and
report information to a diverse
group of internal and external
decision makers in an
organization.
Accounting Information Systems 3rd Edition by Hurt

WHAT IS AN AIS?

INFORMATI
ON

DATA
AIS

Accounting Information Systems 3rd Edition by Hurt

DECISIO
N

COMPONENTS OF AN AIS
(Romney, Steinbart)

People
Procedures
Data
Software
Information technology
infrastructure
Internal controls and security
measures
Accounting Information Systems 11th Edition by Romney, Steinbart

IMPORTANT FUNCTIONS AIS

PERFORMS IN ORGANIZATION
1. It collects and stores data about
activities and transactions.
2. It processes data into information
that is useful for making decisions.
3. It provides adequate controls to
safeguard the organizations assets.

Accounting Information Systems 11th Edition by Romney, Steinbart

BASIC SUB-SYSTEMS IN AN AIS

The expenditure cycle:
involves activities of
buying and paying for
goods or services used
by the organization.
The financing cycle:
involves activities of
obtaining necessary
funds to run the
organization, repay
creditors, and
distribute profits to
investors.
The production cycle:
involves activities
converting raw
materials and labor into
finished goods.

The human
resources/payrol
l cycle: involves
activities of
hiring and
paying
employees.

The revenue cycle: involves

activities of selling goods or
services and collecting
payment for those sales.
wps.prenhall.com/wps/media/objects/152/155841/AIS02.PPT

WHY STUDY AIS?

1.To understand how the
accounting system works.
2.Auditors need to
understand the systems
that are used to produce a
companys financial
statements.

WHY STUDY AIS?

3. Tax professionals need to
understand enough about the
clients AIS to be confident
that the information used for
tax planning and compliance
work is complete and
accurate.

WHY STUDY AIS?

4. A survey conducted by the
Institute of Management
Accountants (IMA) indicates
that work relating to accounting
systems was the single most
important activity performed by
corporate accountants.

WHY STUDY AIS? (Romney,

Steinbart)
1. Its fundamental to accounting.
2. The skills are critical to career
success.
3. The AIS course complements other
systems courses.
4. AIS topics are tested on the new
CPA exam.
5. AIS topics impact corporate
strategy and culture.
Accounting Information Systems 11th Edition by Romney, Steinbart

FACTORS INFLUENCING DESIGN OF

AN AIS
Organizational
Culture

Strategy

AIS

Information
Technology

Accounting Information Systems 11th Edition by Romney, Steinbart

VALUE CHAIN
Primary Activities
Inbound
Logistics

Marketing
and Sales

Operations

Outbound
Logistics

Service
Accounting Information Systems 11th Edition by Romney, Steinbart

VALUE CHAIN
Support Activities
Infrastructure

Technology

Human
Resources

Purchasing

Accounting Information Systems 11th Edition by Romney, Steinbart

HOW AIS CAN ADD VALUE TO AN

ORGANIZATION
1. Improving the quality and reducing
the costs of products and services.
2. Improving efficiency.
3. Sharing knowledge.
4. Improving the efficiency and
effectiveness of its supply chain.
5. Improving the internal control
structure.
6. Improving decision making.
Accounting Information Systems 11th Edition by Romney, Steinbart

3 BASIC FUNCTIONS PERFORMED BY

AN AIS
1. The first function of an AIS is the
efficient and effective collection and
storage of data concerning an
organizations financial activities,
including getting the transaction
data from source documents,
recording the transactions in
journals, and posting data from
journals to ledgers.
Computer Accounting by 3G ELearning FZLLC

3 BASIC FUNCTIONS PERFORMED BY

AN AIS
2. The second function of an AIS is to
supply information useful for making
decisions, including producing
managerial reports and financial
statements.
3. The third function of an AIS is to
make sure controls are in place to
accurately record and process data.

Computer Accounting by 3G ELearning FZLLC

3 BASIC FUNCTIONS PERFORMED BY

AN AIS (Wiweck)
1. The efficient and effective processing of
data about a company's transactions:
. Capture transaction data at source
documents.
. Record transaction data in journals,
which present a chronological record of
what occurred.
. Post data from journals to ledgers,
which sort data by account type.
www.slideshare.net/mobile/wiweck/accounting-information-system-

3 BASIC FUNCTIONS PERFORMED BY

AN AIS (Wiweck)
2. To provide management with
information useful for decision
making
In manual systems, this information is
provided In the
Financial statements
Managerial reports

Accounting Information Systems 11th Edition by Romney, Steinbart

3 BASIC FUNCTIONS PERFORMED BY

AN AIS (Wiweck)
3. To provide adequate Internal controls
Ensure that the information produced
by the system is reliable.
Ensure that business activities are
performed efficiently and in accordance
with management's objectives.
Safeguard organizational assets.

www.slideshare.net/mobile/wiweck/accounting-information-system-

TYPES OF INFORMATION PROVIDED

BY AN AIS
The information an AIS provides falls
into two main categories:
Financial Statements
Managerial Reports

http://www.slideshare.net/ratnadeepgautam/accounting-information-systems-overview-of-b

TYPES OF INFORMATION PROVIDED

BY AN AIS

FINANCIAL STATEMENTS
Prepare a trial balance.
Make adjusting entries.
Prepare the adjusted trial balance.
Produce the income statement.
Make closing entries.
Produce the balance sheet.
Prepare the statement of cash flows.
http://www.slideshare.net/ratnadeepgautam/accounting-information-systems-overview-of-b

TYPES OF INFORMATION PROVIDED

BY AN AIS

MANAGERIAL REPORTS
Two important types of managerial reports are
budget
performance reports
What is a budget?
A budget is the formal expression of goals in
financial terms.
One of the most common types of budget is a
cash budget.

http://www.slideshare.net/ratnadeepgautam/accounting-information-systems-overview-of-b

TYPES OF INFORMATION PROVIDED

BY AN AIS

http://www.slideshare.net/ratnadeepgautam/accounting-information-systems-overview-of-b