A.I.S. Class 2: Outline I Review Timetable and Syllabus I Discuss - - PowerPoint PPT Presentation
A.I.S. Class 2: Outline I Review Timetable and Syllabus I Discuss technical problems with Initial Computer Assignment I Review use of Netscape, Bulletin Board, Listserve and e-mail I Learning Objectives for Chapter 1 I Chapter 1: Introduction to
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I Review Timetable and Syllabus I Discuss technical problems with Initial
I Review use of Netscape, Bulletin Board,
I Learning Objectives for Chapter 1 I Chapter 1: Introduction to A.I.S. I Organizations and Information
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I Topics I Readings I Assignments Due I Examinations I Schedule Conflicts I Group Work Instruction: September 18 I Presentation Instruction & Assistance
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I If you are using your own browser, it may
need to be configured
I You may need to reset Netscape to read all
messages on Bulletin Board
I Remember you can use “threads” I Use the Bulletin Board for postings:
F that will reach those who read the Board F that remain all semester F that you want to be public messages
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I Use the Reload/Refresh features of your
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I After studying this chapter you should be able
to:
N discuss the impact of the information revolution on the
accounting function
N explain the purpose of accounting and the role of the
accounting professional in organizations
N describe the information customers served by accounting N describe the traditional accounting model and the manual
accounting process and the drawbacks of this traditional view
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I After studying this chapter you should be able
to:
N indicate the process of computerized bookkeeping and its
advantages and limitations
N explain in general terms the database approach to satisfying
accounting information and the advantages of the database approach
N discuss concepts of events orientation and the enterprise
repository
N describe the roles that the future accounting professional can
play
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I In “Images of Organization” Gareth Morgan suggests a
number of metaphors for organizations:
F machines F organisms F brains F psychic prisons F cultures F political systems F flux and transformation F instruments of domination
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I A working definition:
I Can you give some different examples of
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I Some organizations:
F Johnson & Johnson F Ernst & Young F AICPA F Institute of Management Accountants F American Accounting Association F Rutgers: the State University of New Jersey F Roman Catholic Church
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I So what do organizations do?
F According to Michael Porter:
N everything an organization does should contribute to the
creation of value for its customers
N “margin” can be defined as the difference between value
and costs; however, this includes ALL value and ALL costs
F For-profit organizations seek to maximize margin:
constraints of their resources
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I Value Chain Analysis (Michael Porter)
Inbound Logistics Operations Outbound Logistics Marketing & Sales Services
The Value Chain
Procurement Human Resource Management Technological Development Infrastructure
Secondary Activities Primary Activities
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I Organizations create value through
I At the heart of managing is the decision-
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Management Process Recommendations Plan Execute Evaluate Rules Trigger Measures Measures Business Processes Information Processes Data Opportunities/Risks Objectives Resources
Managing Business and Information Processes
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I Organizations typically have three main types
business cycles):
F acquisition/expense/payment process F conversion process F sales/collection process
I Information processes include:
F recording F maintaining F reporting
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Customers Suppliers Acquire, maintain, and pay for Goods/ services acquired Goods/ services for customers ORGANIZATION Convert Deliver and collect payment Needed goods and services Payment for goods and services Payment for goods and services
Types of Business Processes
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I Digression: what is a process?
F A process is a time-dependent sequence
process law. All processes have five common ingredients:
Nthe entities participating in the process Nthe elements describing the steps in a process
(called events in business processes)
Nthe relationships between these elements Nthe links to other processes Nthe resource characteristics of the elements
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Business Solution Framework
Culture S3 Culture S2 Culture S1 Measurements Business Processes/ Events People and Structures Information Technology Strategy
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I Change - the only constant in business:
F Bob Elliott: The Third Wave Breaks the Shores of Accounting:
N “IT is creating a wave of change that is crashing
industry in the 1970s. Then it crashed across the services in the 1980s. And it will crash across accounting in the 1990s. It is changing the way business is done and the problems faced by
information in order to make decisions, so internal and external accounting must be changed.”
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I Change: the only constant in business:
F Downsizing and rightsizing F Business process re-engineering F Information superhighway F Dissatisfaction with quality and timeliness of
accounting information
F Expectation gap
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I The role of the accounting professional is in
deciding:
F which events to capture information about F what data relating to each event should be
captured
F how data is to be captured while preventing input
errors
F how data should be stored to optimize usability
while maintaining integrity
F how meaningful reports can be generated on
demand in real time
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I The purpose of accounting is to provide
I Accounting may be viewed as a system (a
I Double entry bookkeeping is a limited
I Who are the information “customers”?
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I Information customers:
F internal:
N employees N management
F external:
N investors N stockholders N creditors N customers N financial institutions N regulators N government
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I Traditional accounting processes:
F The Basic Accounting Equation
(Kieso & Weygand p. 71):
N Assets = Liabilities + Stockholders’ Equity
F Double Entry Bookkeeping:
N Debits = Credits
F Main steps:
N Capture transactions via source documents N Record transactions in journals N Post journals to ledgers N Extract a trial balance N Adjust and prepare financial statements
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I Problems with the traditional view:
F “transactions” versus “events” F narrow focus on financial information F periodic not real-time recording & reporting F limited accessibility of information F too high a level of aggregation F limited flexibility in answering cross-functional queries F duplicate data in non-integrated systems
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I Automation of Accounting:
F first wave: custom processing:
N computerized bookkeeping N standard reports N COBOL
F second wave: software packages:
N inexpensive, relatively error free, but less flexible N data often accessed via proprietary file
management software
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F Advantages
N automation of tedious
clerical tasks
N speed and accuracy N low cost of packages N automatic generation
N “redundant” data
storage permits efficient generation of some reports
F Disadvantages
N “transactions”
N periodic not real-time
reporting
N limited flexibility for
“ad hoc” reports
N proprietary file
management
N cross-functional
queries difficult
I Computerized bookkeeping:
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I The Database Approach to A.I.S.:
F Events orientation F Enterprise-wide data repository F Advantages:
N financial and non-financial data N real-time reporting N increased data accessibility N support for cross-functional data analysis N data storage in disaggregated form
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I Future roles of accounting professionals:
F information processing within an organization F auditing within a public accounting firm:
assurance services
F consultancy within an accounting or
consulting firm
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I How accounting professionals can enhance
their value:
F provide useful information for decision makers
responsible for planning, executing or evaluating an organization’s activities
F help embed information processes into business
processes
F help management define business rules and
policies that shape the nature of its business processes
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I Solving business problems:
F A framework:
N all individual solution components (strategy, business
processes, organization structures, and IT are important
N align each business solution to the organization’s
business processes
N encourage continuous learning:
“In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.” (Eric Hoffer)
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I A challenge for our times: