Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo,Raval, and Wong-On-WingChapter 2: The Business Environment and the AISSlides Authored by Somnath Bhattacharya, Ph.D.Florida Atlantic University

The Business Firm as a System OrganizationsfunctionsAIS TransactionCyclesBusiness Eventsfrom OperationsFigure 2-1

System Characteristics of Business FirmsObjectivesEnvironmentConstraintsInput-Process-OutputFeedbackControlsSubsystems

Examples of AIS Subsystems(Merchandising)No Planning/Control, Investment, or Production Cycles reflected here

Examples of AIS Subsystems: Service Firm RevenueNo Purchasing, Production, Planning/Control, Investment Cyclesreflected here

Examples of AIS Subsystems: Production CycleNo Revenue, and Investment Cycles reflected here

Organizational Structure in Business FirmsHierarchicalMatrix: Blend functional and project-oriented structuresDecentralizedNetwork

A Networked Organizational Structure ConsultantTrainingMarketingConsultingServicesConsultantRecruitmentOperationManagementCustomerProjectTeamCustomerServicesManagementFigure 2-5

The Operational System of a Manufacturing FirmFigure 2-7

Useful Data Elements Concerning a Business EventThe nature of the element and when it occurredWhich agents were involvedWhat kinds of resources were involved and in what quantitiesWhere the event took place

Data Management:Some Specifics

Some More SpecificsThe manual activity of journalizing transactions is equivalent to the computerized recording of transactions in a transaction fileIn general, manual accounting journals are equivalent to computerized transaction filesSimilarly, manual general ledger and subsidiary ledgers are equivalent to computerized Master files. e.g., There is typically 1 record in the general ledger for each account in an entitys chart of accountsExamples of Master files include:Accounts Receivable Master FileAccounts Payable Master FileInventory Master File

Basic Rules of Flowcharting - I1) The flow begins at the upper left-hand corner of the sheet and generally moves from left to right and from top to bottom2) All steps are clearly presented in a sequence, or a series of sequences. No obvious gaps in the procedure should be present3) Symbols are used consistently throughout. Thus the symbol for manual processing (an inverted trapezoid) should appear each time a clerk performs a step in the procedureExamples: What is what?Figure 2-9

Basic Rules of Flowcharting - II4) The dispositions of all documents and reports are shown. In fact, the final resting place of every copy of every of every prepared document should be specified. Typical dispositions include placing documents in files, sending documents to outside parties such as customers, forwarding documents to connecting procedures (such as a general ledger procedure), and distributing reports to managers. If the disposition consists of destroying a document, this action may be represented in the manner shown below:Figure 2-9 - continued

Basic Rules of Flowcharting - III5) The sandwich rule is consistently applied. This rule states that a processing symbol should be sandwiched between an input symbol and an output symbol, in the manner shown below:Figure 2-9 - continued

Basic Rules of Flowcharting - IV6) When a document crosses an organizational line within the flowchart, the document is pictured again in the new organizational unit. However, the repetition is not usually necessary in some instances if the organizational units are adjacent 7) All symbols contain a brief but specific label written inside the symbols8) Multiple copies of documents are drawn as an overlapping group and are numbered in the upper right-hand corners; these numbers remain the copies during their flows through the procedureFigure 2-9 - continued

Basic Rules of Flowcharting - V9) Added comments are included within annotation symbols and are attached to appropriate symbols, such as the processing symbols to which the comments are related10) Ample connections (cross-references) are provided. The symbols used in forming the connections depend on the situation. Thus, if two sheets are needed to to contain the flowchart, the flows between pages are formed by off-page connector symbols. In those cases where the procedure being flowcharted links to an adjoining procedure, the connection can be formed by a terminal symbolFigure 2-9 - continued

Basic Rules of Flowcharting - VI11) Exceptional Occurrences, such as back orders, are clearly noted. They may appear as (i) comments within annotation symbols, (ii) separate flowcharts, with references to the main flowchart, or (iii) decision branches, as shown below:Figure 2-9 - continued

Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo,Raval, and Wong-On-WingCopyright 2000 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.

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