LOGO

Accounting
information
system
A Business process approach
FREDERICK L. JONES
DASARATHA V. RAMA

Jones Rama

LOGO

INTRODUCTION TO
ACCOUNTING
INFORMATION SYSTEMS

King Saud University

Hanan H. Almarhabi

Contents

Business processes and (AIS)

Scope of an accounting information system (AIS)

Accounting Applications and Software

Role of Accountants in Relation to (AIS)

Business Processes and (AIS)

Two terms are

central here

(1) BUSINESS PROCESS

(2) INFORMATION SYSTEMS

Business Processes and (AIS)

1
BUSINESS PROCESS

business process is
a sequence of activities performed by a business for acquiring,
producing, and selling goods and services.
There are several models of business process have been
developed, the useful model is that which views a companys business
process in terms of its transaction cycles.

There are three main transaction

cycles:
(1) An acquisition cycle.
(2) A conversion cycle.
(3) A revenue cycle.

Business Processes and (AIS)

2
INFORMATION SYSTEMS

Management Information
System
(MIS)
is
a set
of subsystems
that captures data about an organization,
stores, and maintains the data, and provides meaningful information for
management.

Accounting Information
system
(AIS) is of an organizations management information
A subsystem

system (MIS).

An organizations business process and its (MIS)

are closely related. Data are captured by (MIS)
from the organizations business process to
produce information that help the organization
monitor and control its business process.

Scope of an (AIS)
Overlap of
Subsystems
All subsystems of (MIS) are
important and different information is
needed to carry out their respective
function, And substantial overlaps in
the information system requirements
have arose between these
subsystems because they use data
about the same underlying business
processes.

Marketing

Production

Human
Resources

Accounting
& Finance

Scope of an (AIS)
(AIS) is a subsystem that
provides accounting and financial
information, as well as other
information obtained in the routine
processing of accounting transaction.

Figure demonstrates the substantial

overlap in the information system
requirements of these four subsystems.

Uses of (AIS)
Producing External Reports

Producing External Reports

Supporting Routine
Activities
Decision Support

Businesses use (AIS) to produce special

reports that follow a required structure established
by organizations such as (FASB). These reports
include financial statements, tax returns, etc

Supporting Routine Activities

Managers need an (AIS) for handling routine
operating activities during the firms operating
cycle. Computer systems excel at handling
repetitive transaction by many accounting software
support these routine functions.

Decision Support

Planning and Control

Information is needed for nonroutine decision

support at all levels of an organization. Some
information are critical for planning, deciding,
marketing functions.

Planning and Control

An information system is required for planning
and control activities as well. Historical data can be
extracted from the database and used to forecast
growth and cash flows. Planners can use data
mining to reveal long-term trends and relationships.

Uses of (AIS)
Producing External Reports
Supporting Routine
Activities
Decision Support

Implementing Internal Control

Internal control includes the policies,
procedures, and information system used to protect
a companys assets from loss and to maintain
accurate financial data. It is possible to build
controls into a computerized accounting information
system to help reach these goals.

Planning and Control

Implementing Internal
Control

[Image Info] www.wizdata.co.kr

- Note to customers : This image has been licensed to be used within this PowerPoint template only. You may not extract the image for any other use.

Accounting Applications and Software

Accounting Applications
Applications are computer programs that are used to serve particular
purpose. Accounting applications provide the information needed for the five
uses mentioned. Accounting applications are organized according to
transaction cycles.

About suppliers, customers,

employees, and product.
Often using on-screen forms.
(2) Intering Information
(1) Recording events

Such as purchase orders and

sales invoices.
(3) Printing documents

Interaction between (AIS) and a user

consists primarily of
(4) Printing reports
Such as financial statement and
sales analyses.

(5) Conducting ad hoc inquiries

Conducting special inquiries

Accounting Applications and Software

Commercial software
that is ready made
and available for sale
to the general public.

(1) Offthe-shelf

(2)Develo
ped using
(DBMS)

Applications developed
using database
management system
software.

Role of Accountants in Relation to (AIS)

Accountant as

Role of
accountants

User

The relation to the (AIS)

As routine transaction processing becomes automated,
accountants are spending less time on routine functions (such
as producing external reports, decision support, etc). Instead,
they are leveraging their understanding for strategic decision
making and planning.

Manager

Accounting managers in the larger firms work closely with

the chief information officer and they understand the content of
the database, the information needs of many users, and
techniques for internal control. This understanding make them a
valuable member of executive committees.

Consultant

Experience can give accounting professionals a competitive

advantages in consulting about the acquisition, design,
installation, and modification of accounting systems. They
understand how information systems support business
processes and they know about financial reporting requirement
and internal control risk.

Role of Accountants in Relation to (AIS)

Accountant as

Role of
accountants

Evaluator

The relation to the (AIS)

We consider the accountant as an
Internal Auditors
They evaluate various units within an organization to
determine whether those units are effectively pursuing their mission.
Internal auditors must understand the business processes and the
information system itself to retrieve data needed for their audits and
evaluate internal control.
External Auditors
They audits financial statements to meet legal
requirements. They must evaluate the reliability of the
(AIS) that used to prepare these financial statement.

Accountant s use accounting software to provide financial

Provider of
statements for small clients and tax software to provide tax
Accounting and
services for their clients.
Tax Services

Copyright
COPYRIGHT2003 BY SOUTH-WESTERN, A DIVISION OF THOMSON
LEARNING. THOMSON LEARNING IS A TRADEMARK USED HEREIN
UNDER LICNSE .
Printed in Canada 1 2 3 4 5 05 04 03 02 from more information,
contact south-western, 5191 natorp boulevard, mason, Ohio 45040.
Or you can visit our internet site at http://www.swcollege.com
All rights reserved.
No part of this work covered by the copyright hereon may be
reproduced or used in any form or by any meansgraphic ,
electronic, or mechanical, including photocopying, recording ,
taping, web distribution or information storage and retrieval
systemswithout the written permission of the publisher.
For permission to use material from this text or product, contact us
by
Tel:(800)730-2214
Fax:(800)730-2215
http://www.thomsonrights.com

LOGO

King Saud University