1. Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing The Study of Accounting Information Systems

2. What Is Accounting? zIt is the principal way of organizing and reporting financial information. It has been called the “language of business.” zAccounting and information systems comprise the functional area of business responsible for providing information to the other areas to enable them to do their jobs and for reporting the results to interested parties. zTo that end, an accounting system is used to identify, analyze, measure, record, summarize, and communicate relevant economic information to interested parties.

3. What Is a System? zA System is an entity consisting of interacting parts that are coordinated to achieve one or more common objectives. Systems must possess

4. SYSTEM INPUTOUTPUTPROCESS FEEDBACK

5. INFORMATION SYSTEM INPUTOUTPUTPROCESS FEEDBACK DATA INFORMATION

6. zData are raw facts and figures that are processed to produce information zInformation is data that have been processed and are meaningful and useful to users. The terms “meaningful” and “useful” are value-laden terms and usually subsume other qualities such as timeliness, relevance, reliability, consistency, comparability, etc. Data Versus Information

7. Functional Steps in Transforming Data into Information zData collection - capturing, recording, validating and editing data for completeness and accuracy zData Maintenance/Processing - classifying, sorting, calculating data zData Management - storing, maintaining and retrieving data zData Control - safeguarding and securing data and ensuring the accuracy and completeness of the same zInformation Generation - interpreting, reporting, and communicating information

8. What Is an Information System? zAn Information system is a framework in which data is collected, processed, controlled and managed through stages in order to provide information to users zIt evolves over time and becomes more formalized as a firm grows and becomes more complex. It can be a manual or computerized system zFirms depend on information systems in order to survive and stay competitive

9. The Universal Data Processing Model Processing Storage Consumers Exchange Events Internal Events Environmental Events }

10. Accounting Information System zAn Accounting Information System is a unified structure that employs physical resources and components to transform economic data into accounting information for external and internal users.

11. The Business Firm as a System Business Firm Environment of the Firm Organization’s functions AIS Transaction Cycles Business Events from Operations Organization Information System Operational System

12. System Characteristics of Business Firms zObjectives zEnvironment zConstraints zInput-Process-Output zFeedback zControls zSubsystems

13. FUNCTIONS OF AN INFORMATION SYSTEM INPUTOUTPUTPROCESS FEEDBACK INFORMATION SYSTEM ENVIRONMENT Customers Suppliers Regulatory Stockholders Competitors Agencies ORGANIZATION

14. TYPES OF INFORMATION SYSTEMS DATA WORKERS KIND OF SYSTEM GROUPS SERVED STRATEGIC LEVEL SENIOR MANAGERS MANAGEMENT LEVEL MIDDLE MANAGERS OPERATIONAL OPERATIONAL LEVEL MANAGERS KNOWLEDGE LEVEL KNOWLEDGE & SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESMARKETING

15. AIS Sales/ Marketing Personnel Production Info Finance AIS as an MIS Subsystem

16. Relationship of AIS & MIS Sales/MarketingProduction AISPersonnel MIS Finance Order entry/Sales Billing/A.Rec./Cash receipts Production General ledger Payroll Inventory Purchasing/A. Pay./Cash disb.

17. Examples of AIS Subsystems (Merchandising) No Planning/Control, Investment, or Production Cycles reflected here Inventory System General Ledger System Order entry Sales System Billing/ A. Receivable Cash Receipts System Purchasing/ A. Payable/ Cash Disb. System Human Resource Management (Payroll) System Revenue Cycle Expenditure Cycle Shipping Receiving Ext/Fin. reporting Tax & req. reporting Internal reporting

18. The Operational System of a Manufacturing Firm Facilities Labor (human services) Data Funds Acquiring Materials Producing Finished Goods Storing Finished Goods Shipping Finished Goods to Customer Supporting Operations AIS Information Funds Material from Supplier Manufacturing Firm Data and information flow Physical flows

19. Examples of AIS Subsystems: Production Cycle Inventory System Human Resource Management (Payroll System General Ledger System Purchasing/ A. Payable/ Cash Disb. System Production System Production Cycle No Revenue, and Investment Cycles reflected here

20. Organizational Structure in Business Firms zHierarchical zMatrix: Blend functional and project- oriented structures zDecentralized zNetwork

21. Objectives and Users of AIS zSupport day-to-day operations yTransaction processing zSupport Internal Decision-Making yTrend Analyses yQuantitative & Qualitative Data yNon-transactional sources zHelp fulfill Stewardship Role

22. Resources Required for an AIS zProcessor(s): Manual or Computerized zData Base(s): Data Repositories zProcedures: Manual or Computerized zInput/Output Devices zMiscellaneous Resources

23. Reasons for Studying Accounting Information Systems zCareer accountants will be users, auditors, and developers of AIS zModern-day AIS are complex because of new technologies zConcepts studied in AIS are integrated into every other accounting course

24. Information-Oriented Professionals zAn array of professionally trained persons from different fields of study have focused on providing information to users zThese professionals include system and managerial accountants and auditors, system analysts and industrial engineers zProfessional certifications are increasing. These include Certified Computing Professional, Certified Information Systems Auditor, Certified Managerial Accountant, Certified Fraud Examiner, etc.

25. Roles of Accountants With Respect to an AIS zFinancial accountants prepare financial information for external decision-making in accordance with GAAP zManagerial accountants prepare financial information for internal decision-making

26. Roles of Accountants With Respect to an AIS zAuditors - evaluate controls and attest to the fairness of the financial statements. zAccounting managers - control all accounting activities of a firm. zTax specialists - develop information that reflects tax obligations of the firm. zConsultants - devise specifications for the AIS.

27. Ethical Standards for Consulting zProfessional competence zExercise due professional care zPlan and supervise all work zObtain relevant data to support reasonable recommendations zMaintain integrity and objectivity zUnderstand and respect the responsibilities of all parties zDisclose any conflicts of interest