1 Information systems Learning objectives To understand the concept of systems. To learn the systems that comprise an accounting information system. To identify the relationship between an accounting information system and value-adding activities. To understand the various types of decisions made in businesses, and the structure and scope of such decisions. To understand what a computer-based accounting information system is.

key terms accounting information system (AIS) boundary closed system data economic event information information system input interface management information system open system output subsystem super system system transaction transaction processing system value chain value system

Accounting information systems AIS provides information using accounting methods: Management reports for decision making Reports for regulatory bodies Special reports for potential creditors including financial institutions and suppliers of goods and services

Accounting information systems Record Process Report events in monetary terms using generally accepted accounting principles (GAAP)

Accounting information systems External reporting Internal reporting Financial accounting system Managementaccounting system Produces budgets & other reports for management Produces financial statements

Levels within the AIS super system Expert system Decision support system Management information system Transaction processing system

AIS super system – another view Comprises only three systems: Transaction processing system Records transactions Budgeting system Produces control information used by management Responsibility reporting system Summarises historical data and provides reports to compare with budgets or set management targets

Decision making Structured Semistructured Unstructured Strategic planning Management control Operational control Structured Trends in balance of accounts receivable Accounts receivable balances Semistructured Budget preparation Personnel management Production scheduling Cash management Unstructured New products Opening a factory site Mergers and acquisitions

Transaction cycle interconnection Finance cycle Payroll cycle Expenditure cycle General ledger & reporting system Conversion cycle Revenue cycle