1. Introduction to FIS 318/618: Financial Systems & Databases
Oakland University
School of Business Administration
Accounting and Finance
Joe Callaghan

2. Introduction Review Syllabus: Review Curricula Review Course
Course Website
Review Curricula
Review Course
Review and Critique Traditional AIS

3. Curriculum: Financial
Why Call it FIS and not AIS?
AIS has baggage (associated with stovepipe and use of accounting packages)
Output of system emphasizes GAAP measures
Meaning of “Financial”
Inputs are Event/Transaction-based
Reporting Emphasis, especially managerial
Audit and Control Emphasis
Using Financial Databases
Not Financial versus Managerial

4. Curriculum: Information
Output of Information System
Includes, but not limited to, GAAP financials
Emphasize Information for managers
Emphasize functional integration
Enterprise-wide information
Audit and Control Emphasis
Relevance versus Reliability
Historical versus Future orientation
Using Financial Databases

5. Curriculum: Systems Generic Life-cycle of IPSO framework
For Business
For AIS
For FIS
Not narrowly defined
Isomorphism between Business and Information systems

6. Model-Oriented Tool-Enhanced (MOTE)
Models as abstractions
Technologically independent
Tools (software) to implement
This course emphasizes tools, laying foundation for downstream courses
Tools needed by information-age accountants:
Database skills
Spreadsheet skills

7. Generic Stages of the Systems Development Life Cycle
Planning
Analysis
Design
Construction

8. Curriculum General Education, Precore and Core Major Courses
A total of credit hours, in the following two categories:
1. Required:
FIS 318 Introduction to Financial Systems & Databases 3
FIS 431 Analysis of Financial Systems
FIS 432 Design of Financial Systems
FIS 433 Information Systems Audit & Control (p.26)
Total

9. Curriculum (cont.) 2. Two Electives from:
FIS 435 Financial Systems Applications 3
Any ACC course at the 300 or 400 level 3
Any MIS course at the 400 level 3
Any Finance course at the 400 level 3
Manufacturing Planning & Control at the 400 level 4
Subtotal
Free Electives:
Total credit hours (minimum)

10. Introduction to Financial Systems & Databases
Course (M.O.T.E.)
Models
Tools/
Software
Introduction to Financial Systems &
Databases
Query (SQL)
Process
ERD REA
MS Access MS Excel
Compustat
Edgar
Analysis of Financial Systems
Process Data Interaction
Designer 9i Designer 9i Designer 9i
Design of Financial Systems
Designer 9i
Designer
Information Systems Audit & Control
Query
ACL
IDEA
Financial Systems Applications
Depends
Designer 9i Designer 9i

11. Course Review Modeling Business Systems IPSO framework
Element Business ACC FIS
Input materials transact. event
Process value-add posting info-add
Storage know-how Ledger RDBMS
Output products financials info.

12. Course Review (cont.) Models Type Abstract Implemented
Data ERD Access DB
Process CRUD Access/Excel
Interaction REA Running App.

13. Modeling A Business Cash Disbursements Cash Receipts $ $ “Suppliers”
Enterprise
Customers
AMP: Raw Materials, Supplies,
Labor,
Finance,
Fixed assets
MSC: Marketing
Sales
Collection
Convert: Operations
Job Costing

14. Activity Models: Template for Decomposition of Business Processes (IPSO template)
Source: Hollander, Denna & Cherrington, 2000 (adapted)
Suppliers
AMP Processes
Provides Input of Resources to Organization
Request input
resources
Pay for input
Customers
Provides
Finished Goods and Services
MSC
Processes
Supply goods and services
Receive payment
ORGANIZATION
Conversion Processes
Add value
Data Storage and Retrieval: Relational Database Management System

15. Relationship between Business Processes, Information Processes and Management Activities
AMP
Conversion Processes
MSC
Management
Activities
Plan
Execute &
Control
Evaluate
Manage Business Processes
Capture
Data
Information System
Provide
Reports
RDMS:
Data
Source: Hollander, Denna & Cherrington, 2000

16. Managing Business and Information Processes (PEACE)
Should Do Do
Feedback
Control;
Evaluate
Plan
Execute And
Trigger
Measures
Business
Rules
Business
Processes
Information
System
Data
Record Data &
Convert to
Information
How to
Value Add

17. Review and Criticisms of the Traditional Accounting System Architecture1

18. Traditional AIS Transactions as subset of Business events
Analyze in terms of Accounting Equation, usually in terms if Drs and Crs.
Journal as limited set of attributes
Posting to General Ledger (aggregated at time lag)
Trial Balance, Adjustments, ATB, Adjust, Close
Produce GAAP Financials

19. Criticisms of Traditional Accounting Systems
They are non-integrated systems in an organization
The architecture captures data about a subset of an organization's business events (the accounting transactions) - FILTERED
The architecture stores and processes only a limited number of characteristics about these accounting transactions – FILTERED EVEN MORE
The architecture captures and stores duplicate data in a highly summarized form - AGGREGATED
The architecture stores financial data to satisfy one primary view - ACCOUNTANT’S PERSPECTIVE
Data are not recorded and processed in real-time

20. Accounting Data: A Subset of Business Data
(Limited view &
limited data)
Data that
describes
Business
Events
Accounting
Data
Business
Events
Accountants
filter data
General
Ledger
Limited Output:
Views & Formats

21. Traditional Accounting “Stovepipe” Systems

22. ? Evolution Of AIS Stage 1 Stage 2 Stage 3 Manual Systems Automated
Resources:
Manual
Process:
Accounting Cycle
Data Stores (Files):
Journals & Ledgers
Resources:
Information Technology
Process:
Accounting Cycle
Data Stores (Flat-Files):
Journals & Ledgers ?
Objective:
Generate financial
statements
Objective:
Generate financial
statements

23. The solution:
An event-driven, enterprise-wide information system, sitting on top of a relational database management system

24. Evolution Of AIS Stage 1 Stage 2 Stage 3 Manual Systems Automated
Event-Driven, Enterprise-
Wide IT Applications
Resources:
Manual
Process:
Accounting Cycle
Data Stores (Files):
Journals & Ledgers
Resources:
Information Technology
Process:
Accounting Cycle
Data Stores (Flat-Files):
Journals & Ledgers
Resources:
Information Technology
Process:
Record, Maintain, Report
All Business Event Data
of Interest
Data Stores (Tables):
RBMS
Objective:
Generate financial
statements
Objective:
Generate financial
statements
Objective:
Support Planning, Executing, Control
And Evaluation Activities
(PEACE)

25. Creating Business Value
Organizations add value by converting resources to develop and provide the goods and services that customers desire.

26. Creating Information Value
Information Systems add value by converting data to develop and provide the information that information customers desire.

27. How Can Accountants Add Value In The Information Age?
Provide useful information for decision makers who are responsible for planning, executing, controlling or evaluating activities of an organization
Help embed information processes in the business processes (to capture and store data about the processes in real time)
Help embed controls in the business processes
Help management define business rules or policies that shape the nature of its business processes

28. Managing Organizations: Business & Information Processes
PEACE (Management)
Plan
Execute, And
Control
Evaluate
Business Processes
AMP: Acquire, Maintain, Pay for Business Resources
Convert: Add value, particularly unique to organization
MSC: Market, Sell goods/services, Collect payment
Information Processes
Record, Maintain, Report