© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart1 of 43 Information is provided to both: –External users –Internal Users SYSTEMS, DATA, AND INFORMATION

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart2 of 43 Information is provided to both: –External users –Internal Users SYSTEMS, DATA, AND INFORMATION

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart3 of 43 External users primarily use information that is either: –MANDATORY INFORMATION—Required by a governmental entity, such as Form 10-K’s required by the SEC; or –ESSENTIAL INFORMATION—Required to conduct business with external parties, such as purchase orders. SYSTEMS, DATA, AND INFORMATION

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart4 of 43 In providing mandatory or essential information, the focus should be on: –Minimizing costs –Meeting regulatory requirements –Meeting minimum standards of reliability and usefulness SYSTEMS, DATA, AND INFORMATION

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart5 of 43 Information is provided to both: –External users –Internal Users SYSTEMS, DATA, AND INFORMATION

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart6 of 43 Internal users primarily use discretionary information. The primary focus in producing this information is ensuring that benefits exceed costs, i.e., the information has positive value. SYSTEMS, DATA, AND INFORMATION

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart7 of 43 An AIS is a system that collects, records, stores, and processes data to produce information for decision makers. It can: –Use advanced technology; or –Be a simple paper-and-pencil system; or –Be something in between. Technology is simply a tool to create, maintain, or improve a system. WHAT IS AN AIS?

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart8 of 43 The functions of an AIS are to: –Collect and store data about events, resources, and agents. –Transform that data into information that management can use to make decisions about events, resources, and agents. –Provide adequate controls to ensure that the entity’s resources (including data) are: Available when needed Accurate and reliable WHAT IS AN AIS?