1. Chapter 3 Systems Concepts and Accounting

2. Learning Objectives l To learn selected concepts from the theory of systems l To apply these selected concepts to the processing of accounting transactions l To learn about those systems that include accounting information systems

3. Systems Everywhere l Solar System l Eco-System l Digestive System l Transportation System l Economic System l Political System l School System l... and on and on.

4. What is a System l A System is a set of parts (or components) coordinated to accomplish a set of goals. InputOutput Process

5. Characteristics of a System l Component Parts l A Process l Goal InputOutput (Goal) Process

6. Sub/Super Systems l Subsystem »a component may itself be a system –a subsystem l Supersystem »a system may itself be a component of a bigger system –the supersystem Supersystem Subsystem

7. Boundaries and Interfaces l Boundaries l Interfaces - Where boundaries meet

8. Boundary and Environmet The Environment System Boundary Interaction

9. Interfaces System 1 System 2 Interface

10. Types of System l Closed Systems »No Interaction with environment l Relatively Closed Systems »Controlled interaction l Open Systems »Uncontrolled interaction l Feedback Control Systems »Portion of output returned as input

11. AIS as a System l A Relatively Closed System l Subsystems of AIS »Classified as Application Systems –Cash Disbursement –Accounts Receivables »Classified as Transaction Cycles –Revenue Cycle –Expenditure Cycle –Conversion Cycle –Financial Cycle

12. Environment l Environment »Customers »Vendors »Government »Owners »Creditors

13. Interfaces and Decoupling l Interfaces Provided by »Documents »Computer Records »General Ledger Accounts l Decoupling (Offline Storage or Filing) Provided by »Documents »Storage media

14. AIS as a Subsystem l AIS is a subsystem of MIS Executive Information System Budgeting and Responsibility Reporting System Transaction Processing System

15. Decision Problems l Unstructured Problems l Semi-structured Problems l Structured Problems

16. Spectrum of Mgt. Info. Needs Structured Retrospective Recurring Unstructured Prospective Nonrecurring Transaction Processing Systems Responsibility Reporting Systems Budgeting Systems Decision Support Systems

17. Thank you