Lecture notes
AC2401 Accounting Information Systems Notes
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AC2401 Accounting Information Systems Notes taken at Nanyang Technological University
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Seminar 1 – Accounting Information Systems & Business ProcessesHorizontal flows of information – used at the operations level to
capture transaction and operations data
Vertical flows of information:
- downward flows — instructions, quotas, and budgets (execution of
plan)
- upward flows — aggregated transaction and operations data
(performance reports & sales volume)
Each user group has unique information requirements.
The higher the level of the organization, the greater the need for more
aggregated information and less need for detail.
Use this as the basis to explain about:
- transactions – captured at the lowest level, and
- information aggregated to support decision making at higher
levels
Transaction Business transactions
- financial (economic events that affects A & L)
- non-financial (all other events processed by org’s info system)
AIS vs MIS AIS
- financial transactions (eg. sale of goods)
- non-financial transactions that affect the process of financial transactions (eg. addition
of newly approved vendors) ------ closely related to economic activities
MIS
- non-financial transactions that are not normally processed by traditional AIS (HR,
Marketing, Logistics) ------ support functions
Transaction Processing System (TPS) – support daily business operations
General Ledger/Financial Reporting System (GL/FRS) – produces financial statements and
reports
Management Reporting System (MRS) – produce special-purpose reports for internal use
Combination of AIS & MIS
All data integrated across all modules, especially financial module
Characteristics of Useful - Relevance: serves a purpose
Information - Timeliness: no older than the time period of action it supports
- Accuracy: free from material error
Key objective of AIS/ERP: - Completeness: all information essential to a decision or task is present
to generate useful information - Summarisation: aggregated in accordance with user’s needs
- Linkages between firms’ separate value chains
supply chains
- Synergistic linkages between information systems of
participating companies improvements in
performance of each company’s value chain
Learning point - Observed phenomenon in forecast-driven distribution channels
from Beer Game: - Refers to a trend of larger and larger swings in inventory in response to changes in customer
Bullwhip Effect demand, as one looks at firms further back in the supply chain for a product
,Seminar 2 –Business Processes & Flowcharts
Functional Areas of
Operations/Busines
s
Business Processes - Collection of activities that takes one or more kinds of inputs & creates an output that is
of value to customers
- BP perspectives help managers look at organisation from customer’s POV
- Successful customer interaction =
o customer not required to interact with each biz function involved in the process
o front end customer service (ie output) can fit the customer needs
MARKETING & SALES
Via telephone, email, fax,
Web HUMAN RESOURCE
ACCOUNTING & FINANCE
Credit-granting
policies
SUPPLY CHAIN MANAGEMENT
,System Describes relationships between inputs, processing, and outputs (storage) for a business process
Flowchart Input Symbols
Processing Symbols
Storage Symbols
Flow & Misc Symbols
To start off: Identify (i) internal entities (departments, people, computers),
(ii) external entities (sources of inputs & destinations for
outputs – Customers, suppliers), (iii) documents/information
flow, & (iv) processes/activities
Seminar 3 –Business Process Reengineering
, Process Red Flags INEFFICIENCY - High cost, Low yield
- Rework
- Complex procedures
Most visible problems
- Rekeying, redundant data
(from flowcharts – - Heavy control, reconciliation
manual & cluttered - Inconsistency
processes) - Poor resource utilization
INEFFECTIVENESS - High reject rate, poor quality outputs
- Delay, slow cycle/response time
- Customer complaints
Less visible – have to
- High warranty costs
review process to - Shrink in markets share
identify them - Backlog, queue of jobs
- Incomplete output
INADAPTABILITY - No. of non-standard customer requests handled
- % of special requests turned down
- Average time to process a special customer request
For exceptions to
- % of special requests escalated
standard processes
Process #1: Process Thinking - End to end process integration
Optimisation & Measurement - Process modeling, measurement, analysis (data collection &
Principles tabulation), improvement, & redesign
- Process governance
Common process improvement techniques
- Six Sigma (statistical, problem-focused) vs Lean Thinking
(qualitative, process flow-focused)
- Take customer’s perspective
- Define & manage end-to-end processes
- Expose & solve problems
- Develop performance culture
#2: Single Source of - Capture data at source
Data - Integrated databases & master data management
(Technology-aspect) - Business Intelligence & analytics
*comes in hand #3: Total Customer - Mapping customer processes, not just organizational processes
with automation Experience - 360° view of customer
- Service excellence – consider what customers/stakeholders
need & what company can provide possible collaborations?
cross-selling, product binding, one-stop shop
Business Process - Fundamental rethinking & radical redesign of business process
Re-engineering - Challenge old assumptions
(BPR) - Involves changing business processes, job designs, organizational structures,
management systems
- Goal: improvement in performance – quality, innovation & service > cost, growth &
control
Why the need for - Use technology to mechanise old ways of doing business — leave existing process intact
BPR? & use compute to speed them up
- Not address fundamental problems
- Need radically redesign business processes
Use of IT for BPR 1) Automate data capture Revenue process
- Customers enter data themselves – through
Principle: websites, OCR forms, phone menus
Capture data at source & Purchase
make process paperless - Automate purchase order requests when
- storage in online databases inventory falls below specified level
- electronic data interchange Payment
(EDI) - Use Electronic Funds Transfer (ETF)
reduce errors & redundant Warehousing
checks - Barcode scanners & Radio Frequency
Identification (RFID) tags to record inventory
levels & movement – in conjunction with point
of sale (POS) systems
2) Facilitate changes in - EDI used to link company directly to customers
business model & supplier (stakeholders) to receive orders,
send/receive invoices (documents)
Principle: - Vendor-managed Inventory: use EDI to
Make information manage retail customer’s inventory
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