Accounting Information Systems in a Computer Environment
Pages 1 to 7
System development:
Initiatives arise from all levels of an organization (planned and unplanned).
Managers and employees are users and part of the development process.
Solid planning and managerial involvement ensure alignment with organizational
goals.
Reasons for replacing or improving information systems:
Changes in technology, decision-making policies, user demands, business
environment, and organization's nature.
Maintaining competitive advantage, improving performance and productivity.
System performance measurement:
Monitoring system effectiveness and contribution to the organization.
Definition and components of a system:
A set of components working together to achieve a common goal.
Subsystems perform specific functions supporting the larger system.
Open vs closed systems:
Closed systems are isolated from their environment.
Open systems interact with and are affected by their environment.
Overview of system development life cycle (SDLC):
Practical framework for developing an information system.
Traditional SDLC, prototyping, rapid application development (RAD), end-user
development life cycle.
Role of accountants and auditors in system development:
SDLC is of interest to accountants due to financial and resource implications.
Pages 7 to 10
Accountants are involved in system development in three ways: as users, as members of
the development team, and as auditors
Accountants play a role in the conceptual design of the system, considering control
implications, accounting conventions, and legal requirements
An information system (IS) is a set of components that collect, process, and disseminate
data and information
ISs are used by organizations to carry out operations, interact with customers and
suppliers, and compete in the marketplace
Information systems assist organizations in functions such as planning, recording
transactions, decision making, control and performance measurement, and hardware,
software, telecommunication, people, procedures, networks, and databases
The computerized information system process involves different stages and their
relationship is illustrated in a diagram
IS departments can be organized in a centralized, decentralized, or outsourced manner,
and the most efficient approach should be considered by the organization.
,Pages 10 to 12
Organizations can outsource their IS department to external service providers and
monitor the service through a service level agreement
Three outsourcing models include on-site outsourcing, off-site outsourcing, and blended
outsourcing
The effectiveness of an organization's information system can give it an advantage over
competitors by providing faster access to sales figures, product availability, and client
requirements
IS departments can be located either on-site or at the head office
Information produced by information systems is vital for day-to-day decision-making
Computerized information systems are essential for accuracy and speed in processing
information
AIS (Accounting Information System) is important for producing reliable financial
statements and can be misused if not monitored properly
The application of AIS can have a significant positive effect on areas such as internal
control, organizational culture, and decision-making
AIS implementation under ERP and accountant competency can positively affect useful
information and successful decision-making
Studying AIS is important for careers in accounting or auditing to evaluate the reliability
and accuracy of information
CIS (Computer Information System) is a computerized system that collects, stores, and
processes data into meaningful information
ICT adoption has increased globally, and the modernization of ICT, including accounting
systems, is crucial for competitive business processes
Different types of IS include TPS (Transaction Processing System), KWS (Knowledge Work
System), and OAS (Office Automatic System)
TPS collects and stores transaction information, KWS is used for technical design
purposes, and OAS supports knowledge-level tasks such as document processing and
calculations.
Pages 12 to 18
Information systems are crucial for the success of an organization and aid in decision-
making and internal control.
There are different types of information systems including Transaction Processing
Systems, Decision Support Systems, Management Information Systems, and Executive
Support Systems.
Outdated software of an AIS can negatively impact the organizational culture by
hindering efficient processes and creating frustration among employees.
The components of a computerized information system are essential for its effective
functioning and should be understood by managers.
Understanding the impact and effectiveness of information systems is crucial in running a
successful business in a continuously changing environment.
Information is derived from data and must be processed and organized to provide value
and knowledge for decision-making.
, Information serves the needs of internal and external users, providing records, analyzing
business situations, and aiding in decision-making and performance monitoring.
Internal users include financial managers, production managers, staff managers,
marketing managers, sales managers, and purchase managers, who require different
types of information for their specific tasks.
External users, such as shareholders, customers, suppliers, and government agencies, also
rely on information for decision-making and assessing stability and reliability.
Information Systems consist of operational support, support of knowledge work, and
management support layers, each serving different purposes within the organization.
Pages 18 to 21
Management support subsystems are used to manage and evaluate an organization's
resources and goals.
A business information system collects and processes data and resources from the
environment to satisfy the information needs of different entities associated with the
business enterprise.
Management information systems (MIS) collect and store key data, produce information
for analysis, control, and decision-making.
MIS is used by all levels of management, with the decision to implement a system falling
on the CIO and CTO.
The MIS director oversees the technical implementation of the system and ensures data
availability, network services, and security.
MIS reports can help with decision-making and reduce downtime for actionable items.
MIS can improve an organization's operating efficiency, add value to existing products,
and help managers make better decisions.
MIS can identify strengths and weaknesses, give an overall picture of the company, act as
a communication and planning tool, and provide customer data for marketing activities.
Advantages of using MIS include improved efficiency, innovation, better decision-making,
and a competitive advantage.
Disadvantages of using MIS include dependence on technology, potential for inaccurate
information.
Information is a key resource within an organization and forms the basis of decisions
made by internal and external users.
Technology is revolutionizing work in the office and organizational setting.
The role of accountants is still needed in preparing the AIS and inputting financial data.
Traditional accounting knowledge is necessary but not sufficient for accounting
information professionals.
Factors influencing technology adoption in organizations include technical feasibility,
cost, economic benefits, labor skills, and regulatory and social acceptance.
Pages 21 to 24
Factors such as technical feasibility, cost minimization, and economic benefit
management are important in embracing new technologies.
Accounting professionals in the digital economy need digital competence in soft skills
more than technical skills.
Routine tasks in accounting have been automated through the latest wave of technology
and software solutions.
