1. ATG 383 - Chapter 1 Chapter 1 - Why it is difficult to have a good AIS? ATG 383 Spring 2002

2. ATG 383 - Chapter 1 Overview Define an AIS Why knowledge of an AIS is valuable What is useful information What an AIS must support: –different types of decisions –different types of managers –phases of decision making –different activities within a business

3. ATG 383 - Chapter 1 What an AIS does?

4. ATG 383 - Chapter 1 We should create useful information

5. ATG 383 - Chapter 1 Assume you are interested in purchasing company X.. Relevant –Feedback –Predictive –Timeliness Reliable –Rep. Faithful. –Verifiability –Neutrality Controller of the company sends you the annual report for the year ended 12/31/95.

6. ATG 383 - Chapter 1 Assume you are interested in purchasing some bonds.. Relevant –Feedback –Predictive –Timeliness Reliable –Rep. Faithful. –Verifiability –Neutrality The bonds are not traded on any markets. The broker sends you a price list.

7. ATG 383 - Chapter 1 How Relevant or Reliable is the presentation of this information? DivisionSales 1100 2120 3110 490 5105

8. ATG 383 - Chapter 1 Some may like this graph…

9. ATG 383 - Chapter 1 Others may prefer this style..

10. ATG 383 - Chapter 1 The information must have several qualities.

11. ATG 383 - Chapter 1 3 Components of an AIS

12. ATG 383 - Chapter 1 Make an argument that these are / are not AISs Checkbook General Ledger Balance Sheet & Income Statement

13. ATG 383 - Chapter 1 How important is knowledge of an AIS? Auditor Tax Accountant Consultant Management Accountant

14. ATG 383 - Chapter 1 Source of Fees: Top 100 Public Accounting Firms

15. ATG 383 - Chapter 1 My prediction for next year

16. ATG 383 - Chapter 1 Work Done by Management Accountants

17. ATG 383 - Chapter 1 An AIS must support different types of decisions Structured Semi-structured Unstructured

18. ATG 383 - Chapter 1 An AIS must support different types of managerial tasks Operational Managerial Strategic

19. ATG 383 - Chapter 1 Relationship Between Decisions and Management Level

20. ATG 383 - Chapter 1 Information and Management Level Strategic Managers –Less relevant –Less reliable Operational Managers –More relevant –More reliable In both cases, information should be understandable.

21. ATG 383 - Chapter 1 An AIS must support phases of decision making Intelligence Design Choice

22. ATG 383 - Chapter 1 An AIS must support different types of tasks Value Chain Transaction Cycles Two common ways to describe tasks

23. ATG 383 - Chapter 1 Value Chain Inbound Logistics Operations Outbound Logistics Marketing and Sales Service Firm Infrastructure Human Resources Technology Purchasing

24. ATG 383 - Chapter 1 Transaction Cycles Obtain Capital Hire Employees Acquire Raw Materials Build Product Sell Product

25. ATG 383 - Chapter 1 Why is it difficult to build a good AIS? Information needs to be delivered around the world.

26. ATG 383 - Chapter 1 It’s hard to create good information because it must have many different qualities.