Accounting Information Systems: An Overview, Cheat Sheet of Accounting

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AIS:

An Overview

Dina Amalia

Learning Objectives

After studying this chapter, you should be able to:

1. Distinguish data from information, discuss the

characteristics of useful information, and explain

how to determine the value of information.

2. Explain the decisions an organization makes, the

information needed to make them, and the major

business processes present in most companies.

3. Explain how an AIS adds value to an organization,

how it affects and is affected by corporate

strategy, and its role in a value chain.

A system is a set of two

or more interrelated

components that interact

to achieve a goal.

Introduction

Each subsystem is designed

to achieve one or more

organizational goals.

Changes in subsystems

cannot be made without

considering the effect on

other subsystems and on

the system as a whole.

Data are facts that are collected, recorded, stored, and processed by an information system Information is data that have been organized and processed to provide meaning and improve the decision-making process

To make effective decisions, organizations must

decide what decisions they need to make,

what information they need to make the decisions,

and how to gather and process the data

needed to produce the information.

Infromation Needs & Business Processes

Infromation Needs &

Business Processes

Transaction An agreement between two entities to exchange goods or services Transaction Cycle The major give-get exchange that occur frequently in most companies Transaction Processing Process of capturing transaction data

Business Process

(Transaction Cycle)

Revenue Cycle Where goods & services are sold for cash / a future promise to receive cash Expenditure Cycle Where companies purchase inventory for resale / raw material to use producing products in exchage for cash / a futurepromise to pay cash Production/Convertion Cycle Where raw material are transformed into finished goods Payroll/HR Cycle Where employees are hired, trained, compensated, evaluated, promoted, & terminated Financing Cycle Where companies raising money by selling shares in the company investors and borrowing money as well as paying dividends and interest.

6 components of AIS

to fulfill 3 important

business functions :

Transform data into information so management can plan, execute, control, and evaluate activities, resources, and personnel Provide adequate controls to safeguard the organization’s assets and data AIS knowledge and skills are critical to an accountant’s career success

Improving the quality & reducing the costs of products/ services

2. Improving efficiency 03.^ Sharing^ knowledge

5. Improving the efficiency & effectiveness of its supply chain Improving the internal control structure Improving decision making

THE ROLE OF THE AIS IN THE VALUE CHAIN

Linking together

of all the primary & support

activities in a business

VALUE CHAIN

Primary

Activities

Secondary

Activities

allow the five primary activities to be performed efficiently and effectively. that directly provide value to customers

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