33:010:458 33:010:458 A Accounting Information Accounting Information A ntin ntin Inf rm ti n Inf rm ti n Systems Systems y Dr. Peter R. Gillett Dr. Peter R. Gillett Associate Professor Department of Accounting, Business Ethics and Information Systems Rutgers Business School–Newark and New Brunswick
Accounting Information Systems A.I.S. Class 3: Outline A.I.S. Class 3: Outline � Key Questions from Class 2 � Introduction to A I S (Conclusion) Introduction to A.I.S. (Conclusion) � Learning Objectives for Appendix � Flowcharting Symbols � Fl h ti S b l � Traditional Systems - Sales & Purchases � Working in Teams � Group Contracts Group Contracts September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 2 2
Accounting Information Systems Key Questions from Class 2 Key Questions from Class 2 � What is business? � What are organizations? What are organizations? � What do organizations do? � How do organizations create value? � H d i ti t l ? � How are organizations managed? � Describe common business processes � Give three types of information process Give three types of information process September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 3 3
Accounting Information Systems Key Questions from Class 2 Key Questions from Class 2 � A working definition: Organizations are transmutative social entities forming goal-directed structured g g activity systems September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 4 4
Accounting Information Systems Key Questions from Class 2 Key Questions from Class 2 � Organizations create value through managing their business and information g g processes � At the heart of managing is the decision- At the heart of managing is the decision making involved in planning, executing, controlling and evaluating the controlling and evaluating the organization’s business and information processes processes September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 5 5
Accounting Information Systems Key Questions from Class 2 Key Questions from Class 2 � Value Chain Analysis (Michael Porter) Primary Activities Primary Activities Inbound Outbound Marketing Operations Services Logistics g Logistics g & Sales The Value Chain Procurement Human Resource Management Technological Development Infrastructure Secondary Activities September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 6 6
Accounting Information Systems Key Questions from Class 2 Key Questions from Class 2 � Organizations typically have three main types of business processes (sometimes called business cycles): cycles): * acquisition/expense/payment process * conversion process * sales/collection process l / ll i � Information processes include: * recording recording * maintaining * reporting September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 7 7
Accounting Information Systems Introduction to A.I.S. Introduction to A.I.S. � Digression: what is a process? * A process is a time-dependent sequence of steps governed by a rule called a process law. t d b l ll d l All processes have five common ingredients: • the entities participating in the process p p g p • the elements describing the steps in a process (called events in business processes) • the relationships between these elements the relationships between these elements • the links to other processes • the resource characteristics of the elements September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 8 8
Accounting Information Systems Business Management Business Management Manage Business Processes Management Business Processes Activities Acq./Pmt Process Information System Plan Provide Provide Execute Reports Maintain Capture Data Conversion Data Process Control Sell/Collect Process Evaluate Manage Business Processes g Hollander Denna & Cherrington, 2000 September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 9 9
Accounting Information Systems Business Solution Framework Business Solution Framework Culture S3 Culture S2 C lt Culture S1 S1 Strategy Business People and Information Processes/ Structures Technology Events Measurements September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 10 10
Accounting Information Systems Introduction to A.I.S. Introduction to A.I.S. � Change: the only constant in business: * Downsizing and rightsizing g g g * Business process re-engineering * Information superhighway Information superhighway * Dissatisfaction with quality and timeliness of accounting information g * Expectation gap * ENRON, WORLDCOM, Sarbanes-Oxley, etc. ENRON, WORLDCOM, Sarbanes Oxley, etc. September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 11 11
Accounting Information Systems Introduction to A.I.S. Introduction to A.I.S. � The role of the accounting professional is in deciding: * which events to capture information about * which events to capture information about * what data relating to each event should be captured * how data is to be captured while preventing input errors * how data should be stored to optimize usability while maintaining integrity * how meaningful reports can be generated on h i f l b d demand in real time September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 12 12
Accounting Information Systems Introduction to A.I.S. Introduction to A.I.S. � The purpose of accounting is to provide information used in decision making � Accounting may be viewed as a system (a process) that converts data into useful i f information i � Double entry bookkeeping is a limited model for meeting information needs d l f i i f i d � Who are the information “customers”? September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 13 13
Accounting Information Systems Introduction to A.I.S. Introduction to A.I.S. � Information customers: * internal: • employees employees • management * external: • investors • stockholders • creditors • customers • financial institutions • fi i l i i i • regulators • government September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 14 14
Accounting Information Systems Introduction to A.I.S. Introduction to A.I.S. � Traditional accounting processes: * The Basic Accounting Equation (Kieso Weygandt & Warfield p 70): (Kieso, Weygandt & Warfield p. 70): • Assets = Liabilities + Stockholders’ Equity * Double Entry Bookkeeping: • Debits = Credits • Debits Credits * Main steps: • Capture transactions via source documents • Record transactions in journals • R d t ti i j l • Post journals to ledgers • Extract a trial balance • Adj • Adjust and prepare financial statements t d fi i l t t t September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 15 15
Accounting Information Systems Introduction to A.I.S. Introduction to A.I.S. � Problems with the traditional view: * “transactions” versus “events” * narrow focus on financial information * periodic not real-time recording & reporting * li * limited accessibility of information it d ibilit f i f ti * too high a level of aggregation * limited flexibility in answering cross functional * limited flexibility in answering cross-functional queries * duplicate data in non-integrated systems p g y September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 16 16
Accounting Information Systems Introduction to A.I.S. Introduction to A.I.S. � Automation of Accounting: * first wave: custom processing: • computerized bookkeeping • standard reports • COBOL • COBOL * second wave: software packages: • inexpensive, relatively error free, but less flexible inexpensive, relatively error free, but less flexible • data often accessed via proprietary file management software September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 17 17
Accounting Information Systems Introduction to A.I.S. Introduction to A.I.S. � Computerized bookkeeping * Advantages * Disadvantages automation of t ti f “transactions” “t ti ” tedious clerical tasks orientation only periodic not real-time speed and accuracy reporting ti low cost of packages limited flexibility for automatic generation “ad hoc” reports of standard reports proprietary file (“redundant” data management storage permits efficient generation cross-functional of some reports) queries difficult d l September 9, 2009 September 9, 2009 Dr. Peter R. Gillett Dr. Peter R. Gillett 18 18
Recommend
More recommend
