2. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 1 Accounting Information Systems: An Overview Chapter 1

3. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 2 Learning Objective 1 Understand the related concepts of transaction cycles and internal control structure.

4. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 3 Overview An accounting information system (AIS) is a collection of resources designed to transform data into information. Accounting information systems perform this transformation. Manual Computerized

5. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 4 Information and Decisions Who are the two main users of accounting information? External users Internal users

6. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 5 Information and Decisions Who are the external users of accounting information? Stockholders Investors Creditors Government agencies Customers and vendors

7. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 6 Information and Decisions Strategic Tactical Operational Transaction oriented Lower-LevelManagement MiddleManagement Top-LevelManagement Summarization and Filtration Hierarchy of Internal Users

8. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 7 Information Systems The term information system suggests the use of computer technology in an organization. Hardware Software Data Information

9. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 8 Information Systems Electronic Data Processing System (EDP) Data Processing System (DP) Management Information System (MIS) Decision Support System (DSS) Expert System (ES) Executive Information System (EIS) Accounting Information System (AIS)

10. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 9 Business Processes DataOrganizationalunits Logical time sequence

11. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 10 Business Processes Inbound Inbound sales sales logistics logistics Outbound Outbound sales sales logistics logistics Operations Operations Marketing Marketing Service Service Primary Business Processes

12. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 11 Business Processes ProcurementTechnologydevelopment HumanresourcesFirminfrastructure Supporting Business Processes

13. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 12 Transaction Processing Cycles 1. Revenue cycle 2. Expenditure cycle 3. Production cycle 4. Finance cycle

14. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 13 Internal Control Process Reliability of financial reporting Effectiveness and efficiency Compliance

15. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 14 Internal Control Process What are the elements of internal control? Control environment Risk assessment Control activities Information and communication Monitoring

16. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 15 Internal Control Process Segregation of Duties: No individual or department should control the accounting records relating to its own operation. Internal Auditing: It is an independent appraisal activity within the organization.

17. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 16 Learning Objective 2 Describe the organizational structure of the information system function in organizations.

18. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 17 The Information System Function ChiefInformationOfficer ManagerSystemsAnalysisManagerProgrammingManagerOperationsManagerTechnicalSupportManagerUserSupport SteeringCommittee

19. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 18 The Information System Function ManagerProgrammingManagerSystemsAnalysis ApplicationAnalystsApplicationProgrammers

20. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 19 The Information System Function ManagerOperations MaintenanceProgrammers ComputerOperatorsDataEntryOperatorsFileLibrarian

21. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 20 The Information System Function ManagerTechnicalSupport DatabaseAdministrationCommunicationAnalystsSystemsProgrammers

22. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 21 The Information System Function Project organizations Application projects AnalystsProgrammers

23. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 22 Learning Objective 3 Discuss applications of information technology in organizations.

24. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 23 End-User Computing End-user computing (EUC) is the hands-on use of computers by end users. Functional end users do their own information processing activities.

25. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 24 EUC: Mainframe Application User Submits Query Language Job User Submits Query Language Job User Report Database Accounts Receivable DataDatabase Data Query Language Processor Processor Database Access Control SoftwareDatabase Software

26. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 25 Traditional Approach User Information System Specialists Data Processing for the End User DataProcessing

27. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 26 End-User Computing Approach User Database Software or Personal Computer Data Processing for the End User DataProcessing

28. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 27 EUC: Stand-Alone PC Application Mainframe Data or Report Mainframe Data or Report User Prepared Data DataPersonalComputer ReportReport

29. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 28 Quick-Response Technology Quick-response systems are essential to the total quality performance (TQP) movement in business. TQP is also called TQM or total quality management. TQP emphasizes customer satisfaction.

30. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 29 Quick-Response Technology Hardware and software standardization Electronic data interchange (EDI) Universal product code (UPC) bar code identification of products and scanning technologies

31. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 30 Quick-Response Technology Retail Sale of Product Retail Sale of Product Scan Bar Code Code Retailers Computer System Electronic Data Interchange Interchange Vendors Computer System Ship Order

32. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 31 Web Commerce Sales via the World Wide Web are an integral part of the economy. What are some benefits? Consumers No waiting in line Merchants Cost savings

33. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 32 Electronic Data Interchange Retailer Retailer Supplier Purchase Order Saves time timeSaves Eliminates paper paperEliminates

34. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 33 Extensible Business Reporting Language XBRL is a language that facilitates the exchange over the Internet of all kinds of business documents and financial statements.

35. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 34 Computer-Integrated Manufacturing What are the components of a CIM system? Computer-aided design (CAD) workstations Real-time production monitoring and control systems Order and inventory control system

36. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 35 Electronic Payment Systems (EFT) Electronic funds transfer systems are electronic payment systems in which processing and communication are primarily or totally electronic. Banks can interface with corporate EDI applications.

37. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 36 Learning Objective 4 Characterize the development of information systems.

38. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 37 The Accountant and Systems Development Accountants may undertake systems development activities either internally or externally. Systems development activities are often encountered by internal and external auditors during reviews of information systems controls.

39. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 38 The Accountant and Systems Development Systems analysis Systems design Systems implementation

40. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 39 The Accountant and Systems Development What are the general objectives of systems analysis? To improve the quality of information To improve internal control To minimize cost, where appropriate

41. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 40 The Accountant and Systems Development Systems design is the process of specifying the details of the solution selected by the systems analysis process.

42. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 41 The Accountant and Systems Development Systems implementation is the process of placing the revised or newly designed procedures and methods into operations. Testing the solution prior to implementation Documenting the solution Reviewing the system

43. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 42 Systems Approach What is the systems approach? It is a general procedure for the administration of a systems project. Its purpose is to assist in the orderly development of effective systems. What are the six steps of the systems approach process?

44. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 43 Systems Approach Statement of system objective(s) 1 Creation of alternatives 2 Systems analysis 3 Systems design 4 Systems implementation 5 Systems evaluation 6

45. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 44 Behavioral Considerations A new information system creates new work relationships among existing personnel. It creates changes in job content and perhaps a change in the formal organizational structure.

46. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 45 Behavioral Considerations The user cooperation needed to operate the system successfully should be ensured during the design of a system, not afterward. A philosophy of user-oriented design fosters a set of attitudes and an approach to systems development that consciously considers the organizational context.

47. 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 1 – 46 End of Chapter 1