The Study of Accounting Information Systems
Rujukan: Wilkinson Ch 1
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Accounting is a process of identifying, recording, and communicating the financial information so the users can make decision from the information. Information is data that have been processed and they are meaningful and useful to users. System is collecting of components that work together systematically to achieve its purposes.
So, Accounting Information System is collecting of structure in company that work together to change the financial data become accounting information that used in making decision of company.
The purposes of A.I.S are:
1.To support the daily activity of organization;
2.To support in decision making by internal people in organization.
The mechanism of A.I.S:
- Data collection; it includes capturing the transaction data, recording, and validating, also editing data to ensure their accuracy and completeness.
- Data maintenance; involves steps like the following:
`Classifying
`Transcribing
`Sorting
`Batching
`Merging
`Calculating
`Summarizing
`Comparing
- Data management; it consists storing, maintaining, and retrieving.
- Data control; it has two basic aims: to safeguard and secure the firm’s assets including data, and to ensure that the captured data are accurate and complete and processed correctly.
- Information generation; it includes interpreting, reporting, and communicating information.
In organization, A.I.S has a big role in supporting every activity in departments such as sales/marketing, production, finance, and personnel. Those parts in organization relate each other and need A.I.S in their working process.
Role of the information system in creating value:
1.Increase the efficiency of the physical processes, hence reduced cost of operations.
2.Increase accuracy and currency of the records pertaining to the various entries.
3.Improve quality of products and services.
4.Enhanced quality of planning and control.
SUMMARY OF CHAPTER 1
Accounting information system is a unified structure within an entity, such as a business firm, that employee physical resource and other components to transform economic data into accounting information, with the purpose of satisfying the information needs of a variety of users.
Objective and users of Accounting Information System:
1. To support the day to day operations. For example the transaction of purchasing, sales and the credit policy.
2. To support decision making by internal decision makers.
3. To fulfill obligations relating to stewardship.
Functions in transforming data into information:
1. Data collection function involves steps such as capturing the transaction data, recording the data into forms, validating and editing the data to ensure their accuracy and completeness.
2. Data maintenance function involves steps such as classifying, transcribing, batching, merging, sorting, calculating, summarizing, and comparing.
3. Data management function involves steps such as storing, maintaining, and retrieving.
4. Data control function has two basic aims: (1) to safeguard and secure the firm’s assets, including the data, and (2) to ensure that the captured data are accurate and complete and processed correctly.
5. Information Generation function includes such as interpreting, reporting, and communicating information.
The AIS is not the only system within a firm that is concerned with data and information. Other component information systems include the management information system, decision support systems, expert systems, and executive information systems.
SUMMARY OF CHAPTER 1
Accounting information system is a unified structure within an entity, such as a business firm, that employee physical resource and other components to transform economic data into accounting information, with the purpose of satisfying the information needs of a variety of users.
Users of Accounting Information System:
1. Internal users, such as managers.
2. External users, such as customers, suppliers, employees who receive paychecks and banks that receive financial statements.
Objective of Accounting Information System:
1. To support the day to day operations, it also called transaction processing. Transaction processing consists of processing accounting and non-accounting transaction. Accounting transactions include events or transactions that represent exchange having economic value, for example the transaction of purchasing or sales. Non-accounting transactions, such as placing a purchase order for computers, lead to accounting transaction or credit policy.
2. To support decision making by internal decision makers, it also called information processing. The information is provided via the management information system
(MIS).
3. To fulfill obligations relating to stewardship.
Functions in transforming data into information (AIS):
1. Data collection function involves steps such as capturing the transaction data, recording the data into forms, validating and editing the data to ensure their accuracy and completeness.
2. Data maintenance function involves steps such as classifying, transcribing, batching, merging, sorting, calculating, summarizing, and comparing.
3. Data management function involves steps such as storing in repositories called files or database, maintaining, and retrieving.
4. Data control function has two basic aims: (1) to safeguard and secure the firm’s assets, including the data, and (2) to ensure that the captured data are accurate and complete and processed correctly.
5. Information Generation function includes such as interpreting, reporting, and communicating information to the appropriate managers.
The overall information system of a firm encompasses several systems in addition to the AIS. The management information system serves the managers with most of their information needs, using various subsystems such as the marketing information systems, finance information systems, and three other decision-oriented systems are decision support systems, expert systems, and executive information systems.
AIS 1 (summary of ch.1)
* Accounting Information System (AIS)= Unified structure within an entity, such as a business firm, that employees physical and other components to transform economic data into accounting information, with the purpose of satisfying the information needs of variety of users
* AIS objective:
1. to support the day to day operation (record transaction)
2. to support decision making by internal decision makers
(projecting expected revenues, etc)
3. to fulfill obligations relating to stewardship
* Function in transforming data into information:
1. data collection
capture, record, and validate the data
2. data maintenance
classify, calculate, summarize, and compare
3. data management
storing, maintaining, and retrieving the data
4. data control
controlling the safeguard of our assets (information)
5. information generation
interpreting, reporting and communicating
* AIS resources/ components:
1. processor
2. database
3. input/ output devices
4. procedures
5. miscellaneous resources
* AISs & their subsystem:
1. general ledger & financial reporting cycle
2. revenue cycle
3. expenditure cycle
4. conversion cycle
5. human resource management cycle
* 3 other ecision-oriented systems:
– decision support system (DSS)
– expert system (ES)
– executive information system (EIS)
* Information has value if it reduces a decision maker’s uncertainty concerning a decision and yields marginal benefits greater than marginal costs
* Qualities that can give value to information:
1. relevance to the decision in question
2. accuracy
3. timeliness
4. conciseness
5. clarity
6. quantibility
7. consistency
* AIS role in the real world:
1. financial accountant
2. accounting manager
3. tax specialist
4. managerial accountant
5. systems developer
6. auditor
Yehezkiel Abisay [KU]
CHAPTER I
THE STUDY OF ACCOUNTING INFORMATION SYSTEMS (AIS)
WHAT IS AN ACCOUNTING SYSTEM?
ACCOUNTING
Accounting is the operation that encompasses recording economic data, maintaining stored data, and presenting quantitative information in financial terms.
INFORMATION
It is intelligence that is meaningful and useful to persons for whom it is intended.
For example, information about flood in Jakarta, so we can decide to stay at home on that day.
SYSTEM
It is a unified group of interacting parts that function together to achieve its purpose.
For example, respiration system, digestion system, etc.
So, accounting information system is a unified structure within entity, such as a business firm, that employs physical resources, and other components to transform economic data into accounting information, with the purpose of satisfying the information needs of a variety of users.
REASONS FOR STUDYING AIS
1. As an accountant, we will be closely involved with AISs during your entire career. Furthermore, as an auditor, we will be expected to evaluate AISs.
2. As information has become more vital, the management of data and the preparation of needed reports have become more complex and varied functions. We need to acquire the knowledge and skills that will enable we to apply computer-based AISs in effectively achieving these functions.
3. Modern-day information systems are also rapidly changing and improving. We should be aware of these developments and others that are just emerging, since they will be increasingly common in the future.
OBJECTIVES AND USERS OF AIS
1. To support the day to day operations.
For example, A Company wants to credit to B Company. B Company has data that A/R of A Company is $5,000,000. So B Company has to reject6 the A Company’s permission. A Company has to pay its debt first.
2. To support decision making by internal decision makers.
3. To fulfill obligations relating to stewardship.
DIFFERENCES BETWEEN DATA AND INFORMATION
DATA
It is raw facts and figures that are processed to produce information.
INFORMATION
It is data that has been processed and is meaningful and useful to users. And also it must have other qualities such as, timeliness, relevance, reliability, consistency, comparability, etc.
FUNCTIONS IN TRANSFORMING DATA INTO INFORMATION
Data Collection
It is involves steps such as capturing the transaction data, recording data onto forms, and validating and editing the data to ensure their accuracy and completeness.
Data Maintenance
• Classifying, or assigning collected data to preestablished categories.
• Transcribing, or copying the data onto another document or medium.
• Sorting, or arranging data elements according to one or more characteristics.
• Batching, or gathering together groups of transactions of a similar nature.
• Merging, or combining two or more batches or files of data.
• Calculating, or performing addition, subtraction, multiplication, and division operations.
• Summarizing, or aggregating quantitative data elements
• Comparing, or examining items from separate batches or files to find those that match or to determine how they differ.
Data Management
It function consists of three steps: storing, maintaining, and retrieving.
Storing involves placing data in repositories called files or data bases. Maintaining involves adjusting stored data to reflect newly occurring events, operations, or decisions. Retrieving consists of accessing and extracting data, either for further processing or for reporting to users.
Data Control
It has two basic aims:(1)to safeguard and secure the firm’s assets, including data, and (2) to ensure that the captured data are accurate and complete and processed correctly.
Information Generation
It function includes such steps as interpreting, reporting, and communicating information.
RELATIONSHIPS BETWEEN AIS AND OTHER COMPONENT SYSTEMS
Some view the AIS as being a subsystem of the MIS, since the data accepted by the MIS have a broader scope. On the other hand, the AIS serves a wider range of users. Through its financial accounting subsystem, the AIS serves external users not accommodated by the MIS. Also, the AIS serves managers through its managerial accounting subsystem, in part directly and in part by providing information to the functional information systems of the MIS.
The MIS also has relationship with the decision support systems (DSS), expert systems (ES), and executive information systems(EIS).
Chapter 1
Accounting is Identifying, recording, summarizing.
Information is something that can change out mind to make the best decision.
System is a collection of components that work together in systematic manner to produce an output.
So, accounting information system is a universal structure within an entity, such as a business firm, that employs physical resources and other components to transform economic data into accounting information, with the purpose of satisfying the information needs of a variety of users.
The users of AIS may be internal user, such as managers, or external users, such us customers.
There is three specific objectives can be identified that will help achieve the primary aim, is to provide accounting information to a wide variety of users. First, to support the day to day operations. Second, to support decision making by internal decision makers. Third, to fulfill obligations relating to stewardship.
Function in transforming data into information, from source data, data collection, data maintenance, data management, data control, information generation, until to the users.
The component information system within a firm is transaction data and non transaction data.
Transaction data will process in AIS such as revenue cycle, expenditures cycle, Human resources management cycle, conversion cycle, and general ledger and financial reporting cycle.
Non transaction data will process in MIS such as marketing information system, finance information system, human resources information system, and production information system.
Every part of MIS is connecting and between AIS and MIS coordinated together to get decision support system, executive information system, and expert system which is usefull for one company.
Created by: Fransiska Indah Pramudita; 023.06.0296; KU
We have been involved with accounting information systems most of our life. For example, when we bought textbooks, we entered into accounting transactions. If we receive monthly statement from a credit card organization, we have received accounting information. Information systems that generate such information are called accounting information system ( AISs)
Accounting Information System is unified structure within an entity , that employs physical resources and other components to tranform economic data into accounting information, with the purpose of satisfying the information needs of a variety of users.
There are three objective of accounting information system. First, to support the day – to – day operation. Second, to support decision making by internal decision makers. The last is to fulfill obligations relating to stewardship.
Data collection :
Capturing the transaction data, recording data onto forms, and validating and editing the data to ensure their accuracy and completeness
Data maintenance :
Classifying or assigning collected data to preestablished catagories, Transcribing or copying/reproducing the data onto another document or medium, Sorting or arranging data elements according to one or more characteristics, Batching or gathering together group or transactions of similar nature, Merging or combining two or more batches of files of data, Calculating or performing addition, subtraction, multiplication, and division operations, Summarizing or aggregating quantitive data elements, and Comparing or examining items from separate batches or files to find those that match or to determine how they differ
Data control :
Storing, Maintaining, and Retrieving data
Infromation generation :
Interpreting, reporting, and communicating information
What is accounting Information System?
Accounting
Accounting has several facets. First, it is an information system in its own right. That is, it employs various systemic operations to generate relevant information. Among the operations that it encompasses are (1) recording economic data (data collection), (2) maintaining stored data (data maintenance), and (3) presenting quantitative information in financial terms (information generation). Second, accounting is the “language of business”: it provides the means by which the key affairs of a business firm are expressed and summarized.
Information
Information is intelligence that is meaningful and useful to persons for whom it is intended. Information has value to firms and their managers because it is necessary for making sound decisions and inducing actions.
System
A system is unified group of interacting parts that function together to achieve its purposes. In particular, a system contains interdependent parts that have system characteristics and are called subsystems.
Accounting Information System
An accounting Information system is an unified structure within an entity, such as business firm, that employs physical resources and other components to transform economic data into accounting information, with the purpose of satisfying the information of a variety of users.
Objectives and Users of AIS
The primary aim of any AIS, as the definition notes, is to provide accounting information to a wide variety of users. The users may be internal users, such as managers, or external users, such as customers. Three specific objectives can be identified that will help achieve the primary aim.
First objective: To support the day-to-day operations. In order to operate from day to day, a firm conducts a number of business events called transactions. Accounting transactions include events or transactions that represent exchanges having economic value. Most non-accounting transactions, such as placing purchase oreder for computers, lead to accounting transactions. Transaction processing consists of processing accounting and non-accounting transactions through key accounting records by means of procedures. Transactions are processed by means of transaction processing systems which are subsystems of the AIS.
Second objective: To support Decision Making by Internal Decision Makers. An equally important purpose is to provide information for decision making. Decisions must be made pertaining to planning and controlling a firm’s operations.
Third objective: To fulfill obligations relating to stewardship. Every firm must fulfill its obligations. Certain important obligations consist of providing mandatory information to users who are external to the firm.
Functions in Transforming Data into Information
Data Collection
The data collection function (performed during the input stage) involves steps such as capturing the transaction data, recording the data onto forms, and validating and editing the data to ensure their accuracy and completeness.
Data Maintenance
The data maintenance function (performed during the processing stage) involves steps like the following:
• Classifying, or assigning collected data to pre-established categories
• Transcribing, or copying/reproducing the data onto another document or medium
• Sorting, or arranging data elements according to one or more characteristics
• Batching, or gathering together groups of transactions of a similar nature
• Merging, or combining two or more batches or files of data
• Calculating, or performing addition, subtraction, multiplication, and division operations
• Summarizing, or aggregating quantitative data elements
• Comparing, or examining items from separate batches or files to find those that match or to determine how they differ
Data Management
The data management function consists of three steps: storing, maintaining, and retrieving. Storing involves placing data in repositories called files or data bases. Data must often be stored for future reference: also data that have been processed into information may be held temporarily until needed by users. Maintaining involves adjusting stored data to reflect newly occurring events, operations, or decisions. Retrieving consists of accessing and extracting data, either for further processing or for reporting to users.
Data Control
The data control function has two basic aims: (1) to safeguard and secure the firm’s assets, including data, and (2) to ensure that the captured data are accurate and complete and processed correctly.
Information Generation
The information generation function includes such steps as interpreting, reporting, and communicating information. It supports the output from both transaction processing and information processing.
Resources/Components
1. Processors The physical means by which data are transformed.
2. Data .Base The data base consist of all stored data
3. Procedures Particular sequences of steps performed within one or more of an AIS’s.
4. Input/Output Devices Although the data and information are not resources to an
AIS, the physical means of handling or storing them can be included.
5. Miscellanous Resouces An AIS requires other resources that should be noted.
Information Systems within a Firm
Management information system
Purpose and Scope The sole purpose of an MIS is to aid the managers of a firm in making decisions related to their responsibilities.
MIS subsystem like most system, the MIS contains subsystems .perhaps the most useful set of subsystem it incorporates is functional information systems.
Relation between AIS and other component system
Through its financial accounting subsystem ,the AIS serves external users not accommodated by the MIS also, the AIS serves managers through its managerial accounting sub-system, in part directly and in part by providing information to the functional information systems of the MIS.
DECISION SUPPORT, EXPERT, AND EXECUTIVE
INFORMATION SYSTEMS
A decision support system (DSS) is computer-based information system that aids mangers in making decisions that involve significant uncertainty.
An expert system (ES) is a knowledge-based information system that fully supports the making of decisions.
An executive information system (EIS) provides managers (i.e.,executive)with information that is tailored to their needs and interest.
AISs AND THEIR SUBSYSTEMS
Key subsystems of an AIS are:
• General ledger and financial reporting cycle
• Revenue cycle
• Expenditure cycle
• Conversion cycle and
• Human resource management cycle
OTHER INFORMATION SYSTEMS
Modern firms have incorporated various specialized information systems. certain examples, such as point-of-sales systems and computer integrated manufacturing systems, are related to particular types of industries.
ROLE OF THE INFORMATION SYSTEM IN CREATING VALUE
Following are several benefits that it provides:
1. Increased efficiency of physical processes, hence reduced costs of operations.
2. Increased accuracy and currency of the records pertaining to the various entities. such as customers and suppliers.
3. Improved quality of products and services
4. Enhanced quality of planning and control
Whooo….
Look separately at terms ‘’accounting’’, “information”, and “system”.
Accounting is Identifying, recording, summarizing, and presenting data. First, accounting it is information system in its own right. Second, is the “language of business”, so accounting may be viewed as financial information needed for overall functioning of an entity.
Information is data that prossesed that useful and meaningful to make the best decision.
System is a collection of components that work together in systematic manner to produce an output.
So, accounting information system is a universal structure within an entity, such as a business firm, that employs physical resources and other components to transform economic data into accounting information, with the purpose of satisfying the information needs of a variety of users.
The users of AIS may be internal user, such as managers, or external users, such us customers.
There is three specific objectives can be identified that will help achieve the primary aim, is to provide accounting information to a wide variety of users. First, to support the day to day operations, the event called transactions. Transactions that processed means transactions processed systems (TPSs) are subsystem of AIS. Second, to support decision making by internal decision makers. Third, to fulfill obligations relating to stewardship.
Function in transforming data into information, from source data, data collection, data maintenance (classifying, transcribing, sorting, batching, merging, calculating, summarizing and comparing data), data management (storing, maintaining, and rerieving data), data control (to safeguard and secure the firms asset’s and to ensure that the capture data are accurate and complete and processed correctly), information generation, until to the users.
The component information system within a firm is transaction data and non transaction data.
Transaction data will process in AIS such as revenue cycle, expenditures cycle, Human resources management cycle, conversion cycle, and general ledger and financial reporting cycle.
N
on transaction data will process in MIS such as marketing information system, finance information system, human resources information system, and production information system.
Every part of MIS is connecting and between AIS and MIS coordinated together to get decision support system, executive information system, and expert system which is usefull for one company.
Role of AIS in creating value:
1. Increased efficiency of the physical processed, hence
2. reduce costs of operations
3.Increase accuracy and currency of the records pertaining to the various entry.
4.Improve quality of products and services
5. Enhanced quality of planning and control
i’m sorry mam, i forgoy write my NIM
Whooo….
Look separately at terms ‘’accounting’’, “information”, and “system”.
Accounting is Identifying, recording, summarizing, and presenting data. First, accounting it is information system in its own right. Second, is the “language of business”, so accounting may be viewed as financial information needed for overall functioning of an entity.
Information is data that prossesed that useful and meaningful to make the best decision.
System is a collection of components that work together in systematic manner to produce an output.
So, accounting information system is a universal structure within an entity, such as a business firm, that employs physical resources and other components to transform economic data into accounting information, with the purpose of satisfying the information needs of a variety of users.
The users of AIS may be internal user, such as managers, or external users, such us customers.
There is three specific objectives can be identified that will help achieve the primary aim, is to provide accounting information to a wide variety of users. First, to support the day to day operations, the event called transactions. Transactions that processed means transactions processed systems (TPSs) are subsystem of AIS. Second, to support decision making by internal decision makers. Third, to fulfill obligations relating to stewardship.
Function in transforming data into information, from source data, data collection, data maintenance (classifying, transcribing, sorting, batching, merging, calculating, summarizing and comparing data), data management (storing, maintaining, and rerieving data), data control (to safeguard and secure the firms asset’s and to ensure that the capture data are accurate and complete and processed correctly), information generation, until to the users.
The component information system within a firm is transaction data and non transaction data.
Transaction data will process in AIS such as revenue cycle, expenditures cycle, Human resources management cycle, conversion cycle, and general ledger and financial reporting cycle.
Non transaction data will process in MIS such as marketing information system, finance information system, human resources information system, and production information system.
Every part of MIS is connecting and between AIS and MIS coordinated together to get decision support system, executive information system, and expert system which is usefull for one company.
Role of AIS in creating value:
Increased efficiency of the physical processed, hence reduce costs of operations
Increase accuracy and currency of the records pertaining to the various entry.
Improve quality of products and services
Enhanced quality of planning and control
As we have learned from accounting before, accounting has several facets. First, it’s an information system in its own right. In the broadest sense, information is intelligence that is meaningful and useful to persons for whom its intended. Information has value to firms and their managers, as we have noted, because its necessary for making sound decisions. Qualities that can give value to information include relevance to decisions in question, accuracy, timeliness, conciseness, clarity, quantifiability, and consistency. And we know that the operations within the accounting activity, these are, economic data- data collection- data maintenance-information generation, and last is financial information. That is, data become information through 3 stages (data collection, data maintenance, information generation). After we know accounting and information, we need to know the meaning of system, that is a unified group of interacting parts that function together to achieve its purposes. An accounting information system is a unified structure within an entity, such as business firm, that employs physical resources and other components to transform economic data into accounting information.
The objectives of AIS, are:(1) to support the day-to-day operations; such as transaction processing,(2) to support decision making by internal decision makers,(3) to fulfill obligation relating to stewardship.
1. Accounting Activity : a. Economic data
b. Data Collection
c. Data Maintenance
d. Information Generation
e. Financial statement
2. Information is Intelligence that is meaningful and useful for person that intended. System is unified group of interacting parts that function together to achieve purpose.
Accounting is unified structure, that used physical resources and other components to transform economic data into accounting information, the purpose for satisfying the information needs of variety users.
3. The objectives to achieve primary aim :
a. To support the day to day operations, a firms conducts a number of business events called transactions ( accounting and non accounting ).
b. To support decision making by internal decision makers, decisions must be mad pertaining to planning and controlling a firm’s operations. This second objective is aided by activities that may be broadly labeled as information processing.
c. To fulfill obligations relating to stewardship, every firm must fulfill its legal obligations. Certain important obligations consists of providing mandatory information to users are external to the firm.
4. Functions in transforming data into information
a. Data collection, capturing the transaction data, recording the data onto forms, and validating and editing the data to ensure their accuracy and completeness.
b. Data maintenance, include classifying, transcribing, sorting, batching, merging, calculating, summarizing, comparing.
c. Data management, consist of three steps : storing, maintaining, and retrieving data.
d. Data control, two basics aim : to safeguard and secure the firm’s assets, including data and to ensure that the captured data area accurate and complete and processed correctly.
e. Information generation, includes such steps : as interpreting, reporting, and communicating information.
5. Resources / Components
a. Processor
b. Data Base
c. Procedures
d. Input/output Devices
e. Miscellaneous
6. Purpose and scope of management information system : to aid the managers of a firm in making decisions related to their responsibilities.
MIS subsystems : the most useful set of subsystems it incorporates is functional information system.
Relationships between AIS and other component systems :complex and somewhat controversial, also the decision support systems (DSS), expert systems (ES), and executive information systems (EIS).
7. Decisions Support Systems (DSS): a computer based information system that aids managers in making ad hoc decision that involve significant uncertainty.
Expert System (ES): a knowledge based information system that fully supports the making of decisions.
Executive Information Systems (EIS): provides managers executives with information that is tailored to their needs and interests.
8. The value of information is the differences between the benefits and costs. Information value is related the effectiveness of decision making. It is based on the common sense concept that the more information that value given to a decision maker, the less risk he or she has of making a bad decision.
9. Role of Information System In Creating Value :
a. Increased efficiency of the physical processes
b. Increased accuracy an currency of the records pertaining the various entities, such as customers and suppliers.
c. Improved quality of products and services.
d. Enhanced quality of planning and control.
10. The most conveniently organized around the positions :
a. Financial Accountants ; financial accounting is the field of accounting that is mainly concerned with generating financial historical information.
b. Accounting Managers ; managers reporting to the controller may include a head financial accountant.
c. Tax Specialist ; tax accounting has the purposes of developing information that reflects the tax obligations of an entity and of aiding the making f decisions that have tax implications.
d. Managerial Accountants ; managerial accounting also called cost accounting, has the purpose of providing financial information to the internal users o a firm.
e. System Developers ; system development cycle consists of devising specifications for an AIS that best fit a firm’s current and expected circumstances.
f. Auditors ; to evaluate controls to the fairness of the financial statement.
g. Extended System Related Roles ; accountants in all of the positions described above interface with the MIS. For instance, the controller of a firm will acquire and use information from the MIS in making key decisions relating to the accounting function.
CHAPTER 1
(summary of chapter 1)
Accounting is a process of identifying, recording, and communicating the financial information so the users can make decision from the information. Information is data that have been processed and they are meaningful and useful to users. System is collecting of components that work together systematically to achieve its purposes.
Objective and users of Accounting Information System:
1. to support the day to day operation (record transaction)
2. to support decision making by internal decision makers
(projecting expected revenues, etc)
3. to fulfill obligations relating to stewardship
Function in transforming data into information:
1. Data Collection
It is involves steps such as capturing the transaction data, recording data onto forms, and validating and editing the data to ensure their accuracy and completeness.
2. Data Maintenance
It is involves steps such as classifying, transcribing, batching, merging, sorting, calculating, summarizing, and comparing.
3. Data Management
The data management function consists of three steps: storing, maintaining, and retrieving. Storing involves placing data in repositories called files or data bases. Data must often be stored for future reference: also data that have been processed into information may be held temporarily until needed by users. Maintaining involves adjusting stored data to reflect newly occurring events, operations, or decisions. Retrieving consists of accessing and extracting data, either for further processing or for reporting to users.
4. Data Control
It has two basic aims:(1)to safeguard and secure the firm’s assets, including data, and (2) to ensure that the captured data are accurate and complete and processed correctly.
Information Generation
It function includes such steps as interpreting, reporting, and communicating information.
5. Information Generation
It is includes such as interpreting, reporting, and communicating information to the appropriate managers.
The AIS is not the only system within a firm that is concerned with data and information. Other component information systems include the management information system, decision support systems, expert systems, and executive information systems.
Resources/Components
1. Processors
The physical means by which data are transformed.
2. Data Base
The data base consist of all stored data
3. Input/Output Devices
Although the data and information are not resources to an AIS, the physical means of handling or storing them can be included.
4. Procedures
Particular sequences of steps performed within one or more of an AIS’s.
5. Miscellanous Resouces
An AIS requires other resources that should be noted.
Qualities that can give value to information:
1. relevance to the decision in question
2. accuracy
3. timeliness
4. conciseness
5. clarity
6. quantibility
7. consistency
Role of the information system in creating value
Following are several benefits that it provides:
1. Increased efficiency of physical processes, hence reduced costs of operations.
2. Increased accuracy and currency of the records pertaining to the various entities. such as customers and suppliers.
3. Improved quality of products and services
4. Enhanced quality of planning and control
THE STUDY OF ACCOUNTING INFORMATION SYSTEM
1.) Reason for studying accounting information system
a. As an accountant, you will be closely involved with AISs during your entire carreer.
b. Almost all bussiness firms have computers as integral parts of their information
systems.
c. Modern – day information systems are also rapidly changing and improving.
2.) The importance of information to modern organizations
Information has been critical to individuals and organizations troughtout recorded
history.
Modern bussiness organizations function is a vastly altered environtment.
3.) What is accounting information system?
• Accounting
1. accounting is an information system in its own right
2. accounting is the languageof business.
3. accounting may be viewed as financial information needed for the overall
Functioning of an entry.
• Information
Is intellegence that is meanngful and useful to persons fr whom it is intended
• System
Is a unified group of interacting parts that function together to achieve its purpose.
• Accounting information systems
Is a unified structure ithin an entity, such as a busiess firm, that mploys physical resources and other components to transform economic data into accounting information.
4.) Features of typical accounting information systems
» Objective and users of AIS
The users may be internal users, such as managers, or external users, such as customers.
Three spesific objective:
To support the day to day operations
In order to operate from day to day, a firm conducts a number of business event called transaction.
To support decision making by internal decision makers
This second objective is aided by activities that may be boardly labeled as information processing.
To fulfill obligations relating to stewardship
Every firms must fulfill its legal obligations. Certain important obligations consist of providing mandatory information to users who are external to the firm.
» Functions in transformingdata into information
Data collection
Data collection function involves steps such as capturing the transaction data, recording the data onto forms, and validating and editing the data to ensure their accuracy and completeness.
Data maintenance
Data maintenance function involves steps like :
1. classifying, or assigning collected data to preestablished categories.
2. transcibing, or copying the data onto another document
3. sorting data elements according to one or more characteristic.
4. batching together groups of transactions of a similar nature.
5. merging two or more bathces or file of data.
6. calculating
7. summarizing quantitive data elements.
8. comparing items from separate batches.
Data management
Data management function consist of three steps : storing, maintaning, and retrieving.
Data control
Data control function has to basic aims :
- To safeguard and secure the firms assets
- To ensure that the captured data are accurate and complete and processed correctly.
Information generation
The functions includes such steps as interpreting, reporting, and communcating information.
» Resources / components
Processor – the physical means by which data are transformed.
Data base – databased consist of all stored data.
Procedures – particular sequences of steps performed within one or more of an AIS’s functions
Input / output devices
Miscellaneous resources – an AIS requres other resources that should be noted.
5.) information systems within a firm
» Management information systems
Serves the managers of the firm with their informations needs.
Purpose and scope
To sole purpose of an MIS in to aid the managers of a firm in making decisions related to their responsibility.
MIS subsystems
The most useful set of subsystems it incorporate is functional information systems.
Relationship between AIS and other component systems
the relationship is complex and somewhat controversial.
» Decision support, expert, and executive information systems
Decision support system is a computer based information system that aids managers in making ad hoc decision that involve significant uncertaintly.
Expert system is a knowledge based information system that fully supports the making of decisions.
Executive information system provides mangers with information that is tailored to their needs and interests.
6.) economic nature of information
» Qualities of information
Useful information qualities are relevance, accuracy, timeless, conciseness, clarity, quantifiability, and consistency.
» Role of the information system in creating value
Several benefits that it provides:
Increased efficiency of the physical processes
Increased accuracy and currency of the records pertaining to the various entities.
Improved quality of product and service
Enhanced quality of planning and control
7.) roles of accountants with respect to an AIS
» Financial accountants
Financial accounting is the field of accounting that is mainly concerned with generating financially oriented historicalinformation.
» Accounting managers
As a controller
» Tax specialist
Tax accounting has the purpose of developing informations that reflects the tax obligations of an entity and of aiding the making of decisions that have tax implications.
» Managerial accountants
Managerial accounting has the purpose of providing financial information to the internal users of a firm.
» Systems developers
Systems design is the key phases within the system development cycle.
» Auditors
Auditing has the purposes of evaluating the information products of an AIS or various operational aspects of the AIS itself.
CHAPTER I
THE STUDY OF ACCOUNTING INFORMATION SYSTEMS (AIS)
I. WHAT IS AN ACCOUNTING SYSTEM?
• Accounting
Accounting is the operation that encompasses recording economic data, maintaining stored data, and presenting quantitative information in financial terms.
• Information
It is intelligence that is meaningful and useful to persons for whom it is intended.
For example, information about flood in Jakarta, so we can decide to stay at home on that day.
• System
It is a unified group of interacting parts that function together to achieve its purpose.
For example, respiration system, digestion system, etc.
Accounting Information System (AIS) : Unified structure within an entity, such as a business firm, that employees physical and other components to transform economic data into accounting information, with the purpose of satisfying the information needs of variety of users.
II. REASON FOR STUDYING AIS
a) As an accountant, you will be closely involved with AISs during your entire carreer.
b) Almost all bussiness firms have computers as integral parts of their information systems.
c) Modern – day information systems are also rapidly changing and improving.
III. OBJECTIVES AND USERS OF AIS
1. To support the day to day operations. For example the transaction of purchasing, sales and the credit policy.
2. To support decision making by internal decision makers.
3. To fulfill obligations relating to stewardship.
IV . DIFFERENCES BETWEEN DATA AND INFORMATION
• DATA
It is raw facts and figures that are processed to produce information.
• INFORMATION
It is data that has been processed and is meaningful and useful to users. And also it must have other qualities such as, timeliness, relevance, reliability, consistency, comparability, etc.
V. FUNCTIONS IN TRANSFORMING DATA INTO INFORMATION
• DATA COLLECTION
Capturing the transaction data, recording data onto forms, and validating and editing the data to ensure their accuracy and completeness
• DATA MAINTENANCE
Classifying or assigning collected data to preestablished catagories, Transcribing or copying/reproducing the data onto another document or medium, Sorting or arranging data elements according to one or more characteristics, Batching or gathering together group or transactions of similar nature, Merging or combining two or more batches of files of data, Calculating or performing addition, subtraction, multiplication, and division operations, Summarizing or aggregating quantitive data elements, and Comparing or examining items from separate batches or files to find those that match or to determine how they differ
• DATA CONTROL
Storing, Maintaining, and Retrieving data
• INFORMATION GENERATION
Interpreting, reporting, and communicating information
VI. ROLES OF ACCOUNTANTWITH RESPECT TO AN AIS
» Financial accountants
Financial accounting is the field of accounting that is mainly concerned with generating financially oriented historicalinformation.
» Accounting managers
As a controller.
» Tax specialist
Tax accounting has the purpose of developing informations that reflects the tax obligations of an entity and of aiding the making of decisions that have tax implications.
» Managerial accountants
Managerial accounting has the purpose of providing financial information to the internal users of a firm.
» Systems developers
Systems design is the key phases within the system development cycle.
» Auditors
Auditing has the purposes of evaluating the information products of an AIS or various operational aspects of the AIS itself.
VII. RELATIONSHIPS BETWEEN AIS AND OTHER COMPONENT SYSTEMS
Some view the AIS as being a subsystem of the MIS, since the data accepted by the MIS have a broader scope. On the other hand, the AIS serves a wider range of users. Through its financial accounting subsystem, the AIS serves external users not accommodated by the MIS. Also, the AIS serves managers through its managerial accounting subsystem, in part directly and in part by providing information to the functional information systems of the MIS.
The MIS also has relationship with the decision support systems (DSS), expert systems (ES), and executive information systems(EIS).