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Accounting Information SystemsOverview

ACCTG 333, AISRomney Chapters 1 and 2Paul Sager

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What is an Accounting Information System?

• A structural, repeatable approach to! Collect"ng and stor"ng rele#ant data about $"nanc"al

transact"ons, and! Process"ng and aggregat"ng the data to create

"n$ormat"on $or users and dec"s"on ma%ers• Can be manual or automated

• Transact"on processes must be e$$ect"#e and e$$"c"ent! Internal Control Activities ensure accurate and

appropr"ate account"ng records! Efficient design reduces t"me and labor &costs' or

enhances customer e(per"ence &re#enues'

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Transaction Processes• Accountants record d"screte e#ents

! Sh"p goods ) re#enue! Rece"#e goods ) l"ab"l"ty ! Rece"#e cash ) reduce rece"#able! Pay employees ) e(pense

• The account"ng e#ents are only one or t*o steps"n mult"+step transact"on processes

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Account"ngntry

Expenditure Cyc e Process Examp e

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Each Process is !in"ed to Another• #ery bus"ness e#ent "s a ser"es o$ "nterl"n%ed

processes

.

PR/C SSI0P T/ TP T I0P T PR/C SS

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Process Temp ate

Process&Create "n#o"ce, sh"p

goods, prepare chec%,calculate payroll, etc4'

INPUT OUTPUT

56AT7rom 56/ 56 06/5

7rom 56 R

56ATTo 56/ 56 06/5

To 56 R

PriorProcess

NextProcess

5hy 5ho ho* processes 5hat "s created added 5here "s data doc stored 5hen

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Co ect and Process #ata• 8ata and "n$ormat"on are d"$$erent

! 8ata ) $acts about processes &e#ents', resources orpeople &agents'

! In$ormat"on ) data that "s aggregated andorgan"9ed to pro#"de bas"s $or dec"s"on ma%"ng orgeneral %no*ledge

• 8ata "s collected, processed and stored

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Characteristics of $sefu Information and#ata• Rele#ant• Rel"able 7a"th$ul representat"on• Complete• T"mely • nderstandable

• ;er"$"able• Access"ble• Read

7AS< Statement o$ 7"nanc"al Account"ng Concepts 0o4 =, >Conceptual 7rame*or% $or 7"nanc"al R

=

http://www.fasb.org/jsp/FASB/Page/PreCodSectionPage&cid=1176156317989http://www.fasb.org/jsp/FASB/Page/PreCodSectionPage&cid=1176156317989http://www.fasb.org/jsp/FASB/Page/PreCodSectionPage&cid=1176156317989http://www.fasb.org/jsp/FASB/Page/PreCodSectionPage&cid=1176156317989

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Pro% em &'(

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#ata Processing Cyc e

DataStorage

DataProcessing

InformationOutput

DataInput

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Interna Contro s• Internal Control sa$eguards assets and

ensures accurate and appropr"ate account"ngrecords and $"nanc"al statements! 8es"gned "nto transact"on processes! Banual or automated

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I0T R0AE C/0TR/ES

#ata Processing Cyc e w) Contro s

8ataStorage

8ataProcess"ng

In$ormat"on/utput

8ataInput

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AIS and Accounting *ust %e Efficient• Account"ng "s a support organ"9at"on to the #alue

creat"on $unct"ons• B"chael PorterFs ;alue Cha"n

! http ***4#aluebasedmanagement4net methods porter #alue cha"n4html

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Account"ng,

Eegal,6R,Purchas"ng,In$ormat"onTechnology

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http://www.valuebasedmanagement.net/methods_porter_value_chain.htmlhttp://www.valuebasedmanagement.net/methods_porter_value_chain.html

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+I,E-+ET Transaction Cyc es

1-

GI E!GET C"cle

GI; product ser#"ce, G T cash +Re#enue

GI; cash, G T product ser#"ce + (pend"ture

GI; cash, G T Eabor +6R Payroll

GI; Eabor Bater"al, G T 7"n"shed Goods +Product"on

GI; Cash, G T Cash +7"nanc"ng

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A most A Accounting Entries are in theTransaction Cyc es• Thousands o$ transact"ons, but #ery $e* #ar"at"ons

• (amples! Grocery store chec%out! Payroll $or . , employees

! 5eb purchases at Ama9on! App do*nload to "Phone or Andro"d! Reg"ster"ng $or S8S classes

1.

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+enera !edger . /eporting System

1

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#ata Input

• 8ata must be rele#ant, rel"able, accurate, t"mely • Collect data $or about

! Act"#"t"es & #ents'! Assets &Resources'! People organ"9at"ons &Agents'

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#ata Input• 7orms and documents collect data $or "nput

! Re$erred to as Source 8ocuments! (amples Purchase /rder, Chec%, In#o"ce! 5ell des"gned $orms help data accuracy

• Turnaround 8ocuments sent to end user, *hocompletes or adds data, then returns! (ample "s stub on b"lls ut"l"ty, cred"t card

• Technology can be used to capture data! Source 8ata Automat"on

! ATBs, Po"nt o$ Sale reg"sters, bar code scanners

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#ata Input• /pt"cal Character Recogn"t"on &/CR'• R7I8 &rad"o $reDuency "dent"$"cat"on'• 5eb+based "nput allo*s end user to "nput data

d"rectly ! Immed"ate #al"dat"on *"th or"g"nator! l"m"nates redundant *r"t"ng %ey"ng! Bob"le AppsHHHH

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#ata Storage• pon "nput, data "s "mmed"ately stored• 8ata process"ng retr"e#es data, then stores

changes ne* data &t*o+*ay $lo*'• Banual AIS stores data "n ledgers and ournals• Automated AIS stores data "n $"les and databases

2

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Coding• s"ng log"c "n number alpha attr"butes

! (ample ;eh"cle Ident"$"cat"on 0umber &;I0'

• AIS use o$ cod"ng! /rgan"9at"on structure, legal ent"ty structure! Geograph"c locat"ons! In#entory types, locat"on, use

! Customer locat"on, type

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Coding• Chart o$ Accounts

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AIS *anua Storage0igure 1-12pg 31• Eedgers

! General Eedger &GE' stores all transact"ons

nt"re Chart o$ Accounts "s "n GE! Account deta"ls recorded "n Subs"d"ary EedgersCustomer rece"#ables, #endor payables, $"(ed assetsSum o$ "nd"#"dual deta"ls eDuals GE account total &Control Account'

• Kournals! Kournals record "nd"#"dual account"ng entr"es! General Kournal $or "n$reDuent non+rout"ne "tems! Spec"al"9ed Kournals $or h"gh #olume, recurr"ng "tems

Sales, purchases, cash rece"pts, cash d"sbursements

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AIS Automated Storage• 5"ll address "n deta"l *"th database model"ng• 8ata stored "n $"les• 7"les are comb"ned "nto databases

2-

Student7"le

Class

7"le

Ad#"sor7"le

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Entity• Someth"ng about *h"ch data "s stored

! Resources, Act"#"t"es & #ents', People &Agents'! (ample nt"ty ) Students

2.

STUDENTS

REDID Last Name First NamePhone

Number Birth Date

333-33-3333 Simpson Alice 333-3333 10/11/84

111-11-1111 Sanders Ned 444-4444 11/24/86

123-45-6789 Moore Artie 555-5555 04/20/85

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Attri%utes• Character"st"cs o$ the ent"ty • The data $or each attr"bute are stored "n $"elds

2

STUDENTS


Number Birth Date

333-33-3333 Simpson Alice 333-3333 10/11/84

111-11-1111 Sanders Ned 444-4444 11/24/86

123-45-6789 Moore Artie 555-5555 04/20/85

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/ecords• Ind"#"dual "tems, people or act"#"t"es

! (ample nt"ty)Students, Record)one student

2:

STUDENTS


Number Birth Date

333-33-3333 Simpson Alice 333-3333 10/11/84

111-11-1111 Sanders Ned 444-4444 11/24/86

123-45-6789 Moore Artie 555-5555 04/20/85

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Primary 4ey• n"Duely "dent"$"es an "nd"#"dual "n the ent"ty

! (ample Student Art"e Boore has a un"Due

R 8I8 number

2

STUDENTS


Number Birth Date

333-33-3333 Simpson Alice 333-3333 10/11/84

111-11-1111 Sanders Ned 444-4444 11/24/86

123-45-6789 Moore Artie 555-5555 04/20/85

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Types of 0i es• Baster 7"le

! Stores data about Resources and People &Agents'

! Spans account"ng per"ods! Changes "n$reDuently ! S"m"lar to Eedgers &AR subs"d"ary ledger customer

"n$ormat"on'

• Transact"on 7"le! Stores data about Act"#"t"es & #ents'! ach transact"on "s a record, or mult"ple records! S"m"lar to Kournals &Sales Kournal captures all sales

transact"ons

2@

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#ata Processing• 8ata process"ng trans$orms the stored data• CR 8

! Create ne* record or data #alue! Read #"e* only, no changes! pdate change an e("st"ng data #alue &e(ample,

accounts rece"#able balance due'! 8elete remo#e recordBust ma"nta"n aud"t tra"l h"gh r"s%

3

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#ata Processing•

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Information Output• Reports standard $ormats used repeatedly

! (ample monthly "ncome statement• 8ocuments pr"nted $orms resemble manual

system! (ample Purchase /rders or In#o"ces

• Luer"es ad hoc searches o$ databases! Create custom reports! (port Duery results to (cel or another tool

• Send to another appl"cat"on, system or enterpr"se•

/utput can be electron"c or pr"nted

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5eyond AIS6Enterprise /esource P anning7E/P8• Systems or"g"nally de#eloped $or

$unct"ons departments! Account"ng, 6R, Banu$actur"ng, Sales, etc4! Separate operat"ng system, appl"cat"on so$t*are,

databases, hard*are• RP system "ntegrates these $unct"ons

! /ne operat"ng system, one appl"cat"on so$t*are,one database, common hard*are

• Integrates transact"on processes, *h"ch "mpro#es

e$$ect"#eness and e$$"c"ency

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E/P System6Common #ata%ase

3.

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Peop e2 Process2 Techno ogy

PEOPLE

TECHNOLGY

PROCESSEffective andEfficient

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#esign Chart of Accounts• 6andout

Documents

Chap 1 and 2(2)