1. Introduction to Accounting Information Systems
Chapter 1
Chapter 12
The Purchasing/
Accounts Payable/
Cash Disbursement (P/AP/CD) Process
Introduction to Accounting Information Systems

2. Learning Objectives Know definitions/basic functions of P/AP/CD
Relationship between P/AP/CD & environment
Logical/physical characteristics of P/AP/CD
Special requirements of payroll process
Technology to implement P/AP/CD
System control goals and plans for P/AP/CD

3. Expenditure cycle (merchandising)
P/AP/
CD process
Inventory
process
Expenditure
Cycle
General
ledger
Payroll

4. Vertical perspective - P/AP/CD

6. Horizontal Information Flows
Purchase requisition from inventory control to purchasing
Requisitions from other depts. to purchasing
Purchase order to vendor
PO notification to other depts. or inventory
PO notification to receiving
PO notification to accounts payable
Goods/services received from vendor

7. Horizontal Information Flows (2)
Receiving notification to accounts payable
Receiving notification to purchasing
Invoice received from vendor
Approved voucher to cashier
AP notification & inventory cost info to GL
Check to vendor by cashier
Paid voucher to accounts payable
Notification of cash disbursement to GL

10. ER diagram - P/AP/CD

15. P-1: Requisition audit data P-2: Authorized vendor data
Control Goals of the Business Process
Control Goals of the
Operations Process
Control Goals of the Information Process
Purchasing Subsystem
Receiving Subsystem
Ensure effectiveness of operations by
achieving the following
process goals
Ensure
efficient
employ-
ment of
resources
Ensure
security of
resources
For purchase
requisition
Inputs, ensure:
For purchase
order master
data, ensure
For vendor
packing slip
inputs,ensure:
For P.O.
master data,
ensure
Recommended
Control Plans A B C D IV IC IA UC UA IV IC IA UC UA
P-1: Requisition audit data
P-1
P-2: Authorized vendor data
P-2
P-2
P-2
P-3: Requisition confirmation
to originating department
P-3
P-4: Approve vendor selection
P-4
P-4
P-5: Independent authorization
to make payment
P-5
P-6: Independent validation
of vendor invoice
P-6
P-7: Vendor invoice math
accuracy check
Key: possible system goals: A – Select vendor – best quality, lowest price by promised delivery data
B – Ensure that right goods in acceptable condition received
C – Optimize cash discounts
D – Ensure sufficient but not excessive cash
IV = input validity
IC = input completeness
IA = input accuracy
UC = update completeness
UA = update accuracy

16. P-1: Requisition audit data P-2: Authorized vendor data
Control Goals of the Business Process (Continued)
Control Goals of the
Operations Process
Control Goals of the Information Process
Payables Subsystem
CD Subsystem
Ensure effectiveness of operations by
achieving the following
process goals
Ensure
efficient
employ-
ment of
resources
Ensure
security of
resources
For vendor
invoice inputs,
ensure:
For accounts
payable master
data, ensure:
For payment
voucher inputs,
ensure:
For A/P
master data,
ensure
Recommended
Control Plans A B C D IV IC IA UC UA IV IC IA UC UA
P-1: Requisition audit data
P-2: Authorized vendor data
P-3: Requisition confirmation
to originating department
P-4: Approve vendor selection
P-5: Independent authorization
to make payment
P-5
P-5
P-6: Independent validation
of vendor invoice
P-6
P-6
P-7: Vendor invoice math
accuracy check
P-7
Key: possible system goals: A – Select vendor – best quality, lowest price by promised delivery data
B – Ensure that right goods in acceptable condition received
C – Optimize cash discounts
D – Ensure sufficient but not excessive cash
IV = input validity
IC = input completeness
IA = input accuracy
UC = update completeness
UA = update accuracy

17. Learning Objectives Know definitions/basic functions of P/AP/CD
Relationship between P/AP/CD & environment
Logical/physical characteristics of P/AP/CD
Special requirements of payroll process
Technology to implement P/AP/CD
System control goals and plans for P/AP/CD