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AccounLlng lnformaLlon

SysLem
An Accountant's erspect|ve
8eporLed by
Ahmad 1ahseen 8aza p
urblno Mark AnLhony C
Jat |s Account|ng Informat|on System?
W lL ldenLlfles collecLs processes and
communlcaLes economlc lnformaLlon
abouL a flrm uslng a wlde varleLy of
Lechnologles
W lL capLures and records Lhe flnanclal
effecLs of Lhe flrm's LransacLlons
W lL dlsLrlbuLes LransacLlon lnformaLlon Lo
operaLlons personnel Lo coordlnaLe many
key Lasks
terna| and Interna| Informat|on I|ow
1op
ManagemenL
Mlddle
ManagemenL
CperaLlons
ManagemenL
CperaLlons ersonnel
uay Lo uay CperaLlons lnformaLlon
CusLomer
SLakeholders
Suppllers
Informat|on |n 8us|ness
Jat |s
lnformaLlon ls a business resource LhaL
needs Lo be approprlaLely managed
ls vlLal Lo Lhe survlval of conLemporary buslnesses
|nformat|on?
Informat|on |n 8us|ness
Jat |sa system?
W A group of lotetteloteJ moltlple compooeots
ot sobsystems LhaL serve a common purpose
W SysLem or subsysLem?
A system ls called a subsysLem when lL ls
vlewed as a componenL of a larger sysLem
A subsystem ls consldered a sysLem when lL
ls Lhe focus of aLLenLlon
System Decompos|t|on versus
System Interdependency
System Decompos|t|on System Interdependency
W Lhe process of dlvldlng Lhe
sysLem lnLo smaller subsysLem
parLs
W dlsLlncL parLs are noL selfconLalned
W Lhey are rellanL upon Lhe
funcLlonlng of Lhe oLher parLs of Lhe
sysLem
W all dlsLlncL parLs musL be
funcLlonlng or Lhe sysLem wlll fall
Informat|on |n 8us|ness
Jat |s an |nformat|on system
1he seL of formal procedures by whlch daLa are
collecLed processed lnLo lnformaLlon and
dlsLrlbuLed Lo users
@ransact|ons
Nonf|nanc|a| transact|ons
all otbet evenLs processed by Lhe organlzaLlon's lnformaLlon
sysLem
eg an alrllne reservaLlon no commlLmenL by Lhe cusLomer
A transact|on ls a buslness evenL
I|nanc|a| transact|ons
economlc evenLs LhaL affecL Lhe asseLs and equlLles of Lhe
organlzaLlon
eg purchase of an alrllne LlckeL
Financial
Transactions
NonIinancial
Transactions
InIormation
System
User
Decision
Making
InIormation
lS
AlS
CLS/l8S 1S M8S
MlS
llnance MarkeLlng roducLlon P8S ulsLrlbuLlon
AIS versus MIS
W Account|ng Informat|on Systems %AlS) process
flnanclal LransacLlons
W eg sale of goods
and nonflnanclal LransacLlons LhaL dlrecLly affecL
Lhe processlng of flnanclal LransacLlons
W eg addlLlon of newly approved vendors
W Management Informat|on Systems %MlS) process
nonflnanclal LransacLlons LhaL are noL normally
processed by LradlLlonal AlS
W eg Lracklng cusLomer complalnLs
AIS versus MIS
AIS Subsystems
W @ransact|on process|ng system (@S)
supporLs dally buslness operaLlons
W enera| Ledger] I|nanc|a| keport|ng System
(L]IkS)
produces flnanclal sLaLemenLs and reporLs
W Management keport|ng System (MkS)
produces speclalpurpose reporLs for lnLernal
use
@e enera| AIS Mode|
Data vs Informat|on
Informat|on causes Lhe user Lo Lake an acLlon
LhaL he or she oLherwlse could noL or would
noL have Laken
Data are facLs whlch may or may noL be
processed %edlLed summarlzed or reflned) and
have no dlrecL effecL on Lhe user
Data Sources
uaLa sources are flnanclal LransacLlons LhaL enLer Lhe
lnformaLlon sysLem from lnLernal and exLernal
sources
tetool floooclol ttoosoctloos are Lhe mosL common
source of daLa for mosL organlzaLlons
N Lg sale of goods and servlces purchase of lnvenLory recelpL of
cash and dlsbursemenL of cash %lncludlng payroll)
otetool floooclol ttoosoctloos lnvolve Lhe exchange or
movemenL of resources wlLhln Lhe organlzaLlon
N Lg movemenL of raw maLerlals lnLo worklnprocess %Jl)
appllcaLlon of labor and overhead Lo Jl Lransfer of Jl lnLo
flnlshed goods lnvenLory and depreclaLlon of equlpmenL
@ransform|ng te Data |nto Informat|on
uaLa CollecLlon
uaLa rocesslng
uaLa ManagemenL
lnformaLlon CeneraLlon
@ransform|ng te Data |nto Informat|on
uaLa CollecLlon
W CapLurlng LransacLlon daLa
W 8ecordlng daLa onLo forms
W valldaLlng and edlLlng Lhe daLa
uaLa rocesslng
@ransform|ng te Data |nto Informat|on
uaLa CollecLlon
uaLa rocesslng
W Merglng
W CalculaLlng
W Summarlzlng
W Comparlng
W Classlfylng
W 1ranscrlblng
W SorLlng
W 8aLchlng
uaLa ManagemenL
@ransform|ng te Data |nto Informat|on
uaLa CollecLlon
uaLa rocesslng
uaLa ManagemenL
W SLorlng
W 8eLrlevlng
W ueleLlng
lnformaLlon CeneraLlon
@ransform|ng te Data |nto Informat|on
uaLa CollecLlon
uaLa rocesslng
uaLa ManagemenL
lnformaLlon CeneraLlon
W Complllng
W Arranglng
W lormaLLlng
W resenLlng
aracter|st|cs of Usefu| Informat|on
e/evonce serves a purpose
@ime/iness no older Lhan Lhe Llme perlod of Lhe
acLlon lL supporLs
ccurocy free from maLerlal errors
omp/eteness all lnformaLlon essenLlal Lo a
declslon or Lask ls presenL
ummoritotion aggregaLed ln accordance wlLh
Lhe user's needs
Informat|on System Cb[ect|ves |n a
8us|ness ontet
W Lhe sLewardshlp funcLlon of managemenL
W managemenL declslon maklng
W Lhe flrm's dayLoday operaLlons
CrganlzaLlonal SLrucLure
1he sLrucLure of an organlzaLlon helps Lo
allocaLe
W responslblllLy
W auLhorlLy
W accounLablllLy
Segment|ng by buslness funcLlon ls a very
common meLhod of organlzlng
luncLlonal %SegmenLed) Areas
W lnvenLory/MaLerlals ManagemenL
purchaslng recelvlng and sLores
W roducLlon
producLlon plannlng quallLy conLrol and
malnLenance
W MarkeLlng
W ulsLrlbuLlon
W ersonnel
W llnance
W AccounLlng
W CompuLer Servlces
AccounLlng lndependence
1o promoLe accounLlng lndependence
W AccounLlng acLlvlLles musL be separaLe and
lndependenL of Lhe funcLlonal areas malnLalnlng
resources
W AccounLlng supporLs Lhese funcLlons wlLh lnformaLlon
buL does noL acLlvely parLlclpaLe
W ueclslons makers ln Lhese funcLlons requlre LhaL such
vlLal lnformaLlon be supplled by an lndependenL
source Lo ensure lLs lnLegrlLy
@e omputer Serv|ces Iunct|on
entra||zed Data
rocess|ng (D)
D|str|buted Data
rocess|ng (DD)
,ost compooles foll lo betweeo
All daLa processlng ls
performed by
one or more large
compuLers housed
aL a cenLral slLe LhaL
serves users
LhroughouL Lhe
organlzaLlon
rlmary areas
daLabase admlnlsLraLlon
daLa processlng
sysLems developmenL
sysLems malnLenance
8eorganlzlng Lhe
compuLer servlces
funcLlon lnLo small
lnformaLlon processlng
unlLs LhaL are
dlsLrlbuLed Lo end users
and placed under Lhelr
conLrol
Crgan|zat|on of omputer Serv|ces Iunct|on |n a entra||zed
System
Crgan|zat|ona| Structure for a D|str|buted rocess|ng
System
oLenLlal AdvanLages of uu
W CosL reducLlons ln hardware and daLa enLry Lasks
W lmproved cosL conLrol responslblllLy
W lmproved user saLlsfacLlon slnce conLrol ls closer Lo Lhe user
level
W 8ackup of daLa can be lmproved Lhrough Lhe use of mulLlple
daLa sLorage slLes
oLenLlal ulsadvanLages of uu
W Loss of conLrol
W MlsmanagemenL of company resources
W Pardware and sofLware lncompaLlblllLy
W 8edundanL Lasks and daLa
W ConsolldaLlng Lasks usually segregaLed
W ulfflculLy aLLracLlng quallfled personnel
W Lack of sLandards
Informat|on System Mode|s
Informat|on System Mode|s
W Manual rocess Model
W llaLllle Model
W uaLabase Model
W 8esources LvenLs and AgenLs %8LA) Model
W LnLerprlse 8esource lannlng %L8) Model
Informat|on System Mode|s
W Manual rocess Model
W 1ransacLlon processlng lnformaLlon processlng and
accounLlng are physlcally performed by people usually uslng
paper documenLs
W useful Lo sLudy because
helps llnk AlS courses Lo oLher accounLlng courses
ofLen easler Lo undersLand buslness processes when noL
shrouded ln Lechnology
faclllLaLes undersLandlng lnLernal conLrols
W llaLllle Model
Informat|on System Mode|s
W Manual rocess Model
W llaLllle Model
W MosL ofLen assoclaLed wlLh socalled Legacy Systems
W uescrlbes an envlronmenL ln whlch lndlvldual daLa flles are
noL relaLed Lo oLher flles Lnd users ln Lhls envlronmenL own
Lhelr daLa flles raLher Lhan share Lhem wlLh oLher users
1hus sLandalone appllcaLlons raLher Lhan lnLegraLed
sysLems perform daLa processlng
@e vo|ut|on of IS Mode|s @e I|atI||e Mode|
uaLa 8edundancy roblems
< Data Storage excesslve sLorage cosLs of paper documenLs and/or magneLlc
form
< Data Updat|ng changes or addlLlons musL be performed mulLlple Llmes
< urrency of Informat|on poLenLlal problem of falllng Lo updaLe all affecLed
flles
< @askData Dependency user's lnablllLy Lo obLaln addlLlonal lnformaLlon as
needs change
< Data Integrat|on separaLe flles are dlfflculL Lo lnLegraLe across mulLlple
users
33
Informat|on System Mode|s
W Manual rocess Model
W llaLllle Model
W uaLabase Model
W CrganlzaLlon can overcome Lhe problems assoclaLed wlLh
flaL flles by lmplemenLlng Lhe database mode|
W 1hls model cenLrallzes Lhe organlzaLlons daLa lnLo common
daLabase LhaL ls shared by oLher users JlLh Lhe
organlzaLlon's daLa ln cenLrallzed locaLlon all users have
access Lo daLa Lhey need Lo achleve Lhelr respecLlve
ob[ecLlves
@e vo|ut|on of IS Mode|s @e Database Mode|
37
Informat|on System Mode|s
W Manual rocess Model
W llaLllle Model
W uaLabase Model
W 8esources LvenLs and AgenLs %8LA) Model
1he 8LA model ls an account|ng framework for mode||ng
an organlzaLlon's
economlc kesources eg asseLs
economlc vents le affecL changes ln resources
economlc Agents le lndlvlduals and deparLmenLs LhaL
parLlclpaLe ln an economlc evenL
Interre|at|ons|psamong resources evenLs and agenLs
nt|tyre|at|ons|p d|agrams (kD) are ofLen used Lo model
Lhese relaLlonshlps

An kA Data Mode| amp|e


Inventory
Line items
Sales
Party to
Sales
person
Pays Ior
Cash
Collections
Increases
Cash
Made to
Customer
Cashier
Received
Irom
Received
by
M
1
M
M
M
M
M
M
M
M
1
1
1
1
#

Informat|on System Mode|s


W Manual rocess Model
W llaLllle Model
W uaLabase Model
W 8esources LvenLs and AgenLs %8LA) Model
W LnLerprlse 8esource lannlng %L8) Model
W An lnformaLlon sysLem model LhaL enables an organlzaLlon
Lo auLomaLe and lnLegraLe lLs key buslness processes
W laclllLaLes daLa sharlng lnformaLlon flows and Lhe
lnLroducLlon of common buslness pracLlces among all
organlzaLlonal users
ko|es of Accountants
ko|es of Accountants
W As an lnformaLlon SysLem users
W As SysLem ueslgner
W As SysLem AudlLors
ko|es of Accountants
W As an lnformaLlon SysLem users
W AccounLanLs musL be able Lo clearly convey Lhelr needs Lo
Lhe sysLems professlonals who deslgn Lhe sysLem
W 1he accounLanL should acLlvely parLlclpaLe
ln sysLems developmenL pro[ecLs Lo ensure
approprlaLe sysLems deslgn
W As SysLem ueslgner
ko|es of Accountants
W As an lnformaLlon SysLem users
W As SysLem ueslgner
W 1he accounLlng funcLlon ls responslble for Lhe conceptua|
system whlle Lhe compuLer funcLlon ls responslble for Lhe
physlcal sysLem
W 1he conceptua| system deLermlnes Lhe naLure of Lhe
lnformaLlon requlred lLs sources lLs desLlnaLlon and Lhe
accounLlng rules LhaL musL be applled
W As SysLem AudlLors
ko|es of Accountants
W As an lnformaLlon SysLem users
W As SysLem ueslgner
W As SysLem AudlLors
W LxLernal AudlLors
aLLesL Lo falrness of flnanclal sLaLemenLs
assurance servlce broader ln scope Lhan LradlLlonal
aLLesLaLlon audlL
W l1 AudlLors
evaluaLe l1 ofLen as parL of exLernal audlL
W lnLernal AudlLors
lnhouse lS and l1 appralsal servlces