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Summary book: Accounting Information Systems [Chapters 1-3, 5, 7-9] (11th ed.) $5.94
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Summary book: Accounting Information Systems [Chapters 1-3, 5, 7-9] (11th ed.)

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  • Course
  • Information Systems and Data Analytics (323101M6)
  • Institution
  • Tilburg University (UVT)
  • Book
  • Accounting Information Systems

This is a summary of the book Accounting Information Systems: Gelinas, U.J., R.B. Dull, P. Wheeler, and M.C. Hill (2018), 11th edition. This summary contains the chapters: 1-3, 5, 7-9.

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Document information

  • No
  • H1, h2, h3, h5, h7, h8, h9
  • October 18, 2019
  • 29
  • 2019/2020
  • Summary

Subjects

  • accounting
  • information
  • systems
  • information systems
  • gelinas
  • dull
  • wheeler
  • hill
  • accounting information systems

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  • Tilburg University (UVT)
  • Accountancy
  • Information Systems and Data Analytics (323101M6)
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Content preview

Accounting information systems (AIS)

Part 1: understanding information systems
Chapter 1: introduction to AIS

All decision makers within an organization benefit from accounting technology

Three themes of the book:
- Enterprise systems: integrate the business processes and information from all of an
organization’s functional areas
o ERP systems are software packages that can be used to support enterprise
systems
o To install an enterprise system: the business processes of an organization
must be understood and documented  configuring the system to tailor the
needs of the business
o Store all information about business events for an organization
- E-business: the use of electronic networks (including the internet) to enable business
processes between individuals and organizations (back-office and front-office
processes)
o Has created new ways of working within and across organizations
o Accountants need to be aware of the opportunities and risks
- Internal control: a process designed to provide confidence that the organization is
achieving its objectives in the following categories:
o Efficiency and effectiveness of operations
o Reliability of reporting
o Compliance with applicable laws and regulations

Sarbanes-Oxley act of 2002 (SOX):
- Section 404: management must identify, document and evaluate significant internal
controls. Auditors must report on the effectiveness of the organization’s system of
internal control
- Section 409: requires disclosure to the public on a “rapid and current basis” of
material changes in an organization’s financial condition  requires application of
legal, financial, and technical expertise to ensure that the AIS is able to produce
financial data in an accurate and timely manner
- Financial accountants must be sure that their AIS can produce financial statements to
comply with SOX and other regulations
- Management accountants must be sure that a new information system (IS) has the
necessary features and the ability to access and trace data

How can you determine the reliability of financial information?
- Nonfinancial information
- Use of information technology to create or summarize information from databases
- Information interpretation to determine the quality and relevance of information to
be used for decision making

,Elements in the study of AIS
- Technology: foundation on which AIS and business operations rest; knowledge of
technology is critically important for understanding the AIS discipline
- Databases: data collection and storage in public and private databases
- Reporting: accountant must know what outputs are required or desirable
- Control: make sure the indented actually happens
- Business operations: AIS in light of the work being performed by the organization
- Events processing: data about business operations must be captured and recorded
- Management decision making: information is used for decision-making
- Systems development and operation: the IS that process business events and provide
information for management decision-making must be designed, implemented, and
effectively operated
- Communications: to present the results effectively
- Accounting and auditing principles: an accountant must know the proper accounting
procedures to design and operate the AIS

What is an accounting information system (AIS)?
- Information: data presented in a form that is useful for decision-making activity
- Data: facts or figures in a raw form; measurement of objects/events  to become
useful: data must be transformed into information
- Decision-making: process of making choices, which is the central activity of all
management
- System: set of interdependent elements (subsystems) that together accomplish
specific objectives  you must know an organization’s objectives to understand that
business as a system and to understand the actions and interactions of that
business’s subsystems
- Information system (IS) or management information system (MIS): man-made system
that generally consists of an integrated set of computer-based components and
manual components established to collect, store, and manage data and to provide
output information to users
o Functional components of an IS: storage, processing, users, input, and output
o IS facilitates operational functions and supports management decision-
making by providing information
- Accounting information system (AIS): specialized subsystem of IS with a purpose to
collect, process, and report information related to the financial aspects of business
events  AIS can often not be distinguished from the IS

Logical components of a business process
- Information process (IS)
- Operations process (include production, personnel, marketing, sales, accounting, etc)
- Management process: three most prominent management activities: planning,
controlling, and decision-making

Management uses of information
IS has to important functions within an organization:

, - Assisting in daily operations: can be used to improve operational effectiveness and
efficiency; and monitors actions in the operations system
- Supporting managerial activities: monitor current operations, help measure results,
recognize/adapt trends in the environment

COBIT information criteria:
- Effectiveness: information that is useful for decision-making
- Efficiency: process of obtaining and using information
- Integrity: free of error and complete
- Reliability: true and credible (subjective)
- Availability: information quality
- Confidentiality: restricted access information
- Compliance: information must conform to regulations

Effectiveness  understandability enables users to perceive information’s significance
- Relevance: capable of making a difference in decision-making
o Predicted/feedback value: improve capacity to predict expectations
o Timeliness: information that is available before is loses ability to influence
decision
- Reliability
o Validity: information about actual events
o Accuracy: agreement between information and actual events
o Neutrality: freedom from bias = objective
o Completeness: degree to which data about every relevant event is included
o Verifiability: high degree of consensus about information
- Comparability: enables users to identify similarities and differences in information

Decision-making as a three-step process:
1. Intelligence (environmental information, organizational information)
2. Design (information related to possible courses of action)
3. Choice (information about outcomes of possible courses of action)
 structured decisions

Vertical data flows for processing business events: (managerial decision support)
1. Operations and business event processing
2. Operations management: to monitor daily functioning (timely, accurate information)
3. Tactical management: focuses on relevant operational units
4. Strategic management: requires information to assess the environment (future)
Horizontal data flows: relate to specific business operations

Input for decision-making
- Directly from the environment or direct observations form business processes
- Indirectly through the IS which retrieves and presents operational and environmental
information
o Key component of IS to meet the needs of the decision-maker = enterprise
database (central repository for all data related to the enterprise’s business
activities and resources)

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