ACC 3520 Class #2 Ch 1 – Introduction to AIS

ACC AIS2 Syllabus questions? What is an AIS? Business Processes, Internal Controls, and Enterprise Systems Day 2 Agenda Ch 1 Introduction

Big Picture of AIS Understanding IS (ch 1 – 3) –AIS / Enterprise Systems / E-business Organizing & Managing Info (ch 4 – 6) –DFD / Flowcharts / DBMS (Normalization, REA, relational DB, SQL) Enterprise Risk Mgmt (ch 7 – 9) –ERM / COSO / COBIT / Controls: Pervasive, General, Application / Control Matrix Business Processes (ch 10 – 15) ACC AIS3

4 Textbook Themes Enterprise systems— integrate the business process functionality and information from all of an organization’s functional areas, such as marketing and sales, cash receipts, purchasing, cash disbursements, human resources, production and logistics, and business reporting (including financial reporting). E-Business—use of networks to undertake business processes Internal control— a system of integrated elements that provide reasonable assurance that a business will reach its business process goals

5 Overview –1500’s Italy –Entrepreneur –Sail to China for silk –Sell goods Entrepreneur Script - the Merchant of Venice

6 Entrepreneur Script – the big picture! Source: McCarthy & Geerts 1994

7 Entrepreneur Script, cont. 1.Purchase boat 2.Hire deck hand 3.Sail to China 4.Purchase silk 5.Sail back to Italy 6.Pay deck hand 7.Sell silk

8 Entrepreneur Script, cont.

9 Elements in the Study of AIS

10 Accounting Systems and Subsystems A system is a set of interdependent elements that together accomplish specific objectives. A subsystem is the interrelated parts that have come together, or integrated, as a single system, which we have named System 1.0.

11 Information System Model An information system (IS) or management information system (MIS) is a manmade system that consists of an integrated set of computer- based and manual components established to collect, store, and manage data and to provide output information to users. The figure on the next slide depicts the functional components of an information system.

12 Information System Model

13 Purpose of AIS Collect, process and report information related to the financial aspects of business events Often integrated and indistinguishable from overall information system Like the IS, the AIS may be divided into components based on the operational functions supported.

14 Comparison of Manual and Automated Systems

15 A Business Process

16 Information Qualities

17 Accountant’s Role Designer — application of accounting principles, auditing, information systems, and systems development. User — participate in design. Auditor — provide audit and assurance services.

18 Learning Objectives Appreciate the complex, dynamic environment in which accounting is practiced. Know the relationship between the AIS and the organization’s business processes. Know the attributes of information. Recognize how information is used for different types of decisions and at various levels in the organization. Recognize how the information system supports the management function. Recognize the accountant’s role in relation to the current environment for the AIS. Understand how to use this textbook effectively to learn AIS.

Enterprise Risk Management & Internal Controls Enterprise Information Systems Business Processes

ACC AIS20 Next? Chapter 2 – Enterprise systems