Scribd
Upload
28 views

Chapter One Introduction To AIS

Uploaded by

THOTslayer 420
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
28 views

Chapter One Introduction To AIS

Uploaded by

THOTslayer 420
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 5

Chapter one introduction to AIS

I - Overview of Business Proccesses:


Accounting Information System must identify the transactions to record, capture all details, properly
process into correct accounts and provide reports externally and internally.

A Business Process is a sequence of work steps performed in order to produce a desired result. (expl:
completing a sale, purchasing raw mats, paying employees, paying vendors..).

4 general types of business processes:


1) Revenue Processes (ch8): Sales / Sales return / Cash collection.
2) Expenditure Processes (ch9 and10) : Purchase / Purchase return / Cash disbursement /
Payroll / Fixed asset.
3) Conversion Processes (ch11): Planning / Resource management / Logistics.
4) Administrative Processes (ch12): Capital (capital raising through debt or equity) /
Investment / General ledger (financial statements).

Internal controls are the set of procedures and policies adopted to:

- Safeguard assets / Check accuracy and reliability of data / Promote operational efficiency /
Encourage adherence to prescribed managerial practices.
- A process is a combination of : procedures, IT systems, people.

II – The Accounting Information System (AIS)


Simplified AIS

Supply Chain - processes and information flows that involve the movement of materials, funds, and
related information through the full logistics process, from the acquisition of raw materials to the
delivery of finished products to the end user. (The SC includes all vendors / customers / service
providers / intermediaries)
Supply Chain Management - the organization and control of all materials, funds, and related
information in the logistics process, from the acquisition of raw materials to the delivery of finished
products to the end user (customer).

III – IT Enablement of Business Processes.

Information Technology - Computers, ancillary equipment, software, services, and related resources
as applied to support business processes.

IT Enablement - Using IT systems to enhance efficiency and effectiveness of internal or supply chain
processes.

IT usage accomplishes one or more of the following objectives: Increased efficiency / reducing the
cost / increasing the acuracy of the data of business processes.

Business Process Reengineering (BPR) is the purposeful and organized changing of business
processes to make them more efficient.

IV – Basic Computer and IT Concepts.

- Relational database : expl, relationship in data of a customer having more than one order.
- Master file: expl, payroll master file maintains the relatively permanent data to process payroll
transactions.
- Transaction file: expl, transaction file is processed against the master file and year-to-date
balances are updated in the master file.

File Access and Processing Modes:

 Sequential access: to access a file, you must go through all the files to reach a certain file.
 Random access: : you go directly to the record needed.
 Indexed Sequential Access Method (ISAM)
 Batch processing: using sequential access (Batch processing : you process similar transactions in
a batch)
 Online processing: using random access (Any transaction you can record it as it occurs)
 Real-time processing: immediate update of accounts in real time
- Data Warehouse: cumulation of data (expl : 10 years of accounting data) / Data mining /
Operational DB/ Structured data /Unstructured data (lezemha 7ouloul) / Big data.

Network: (2 or more computers linked together) / types of networks important to acct (LAN,
Internet, Intranet, Extranet, Cloud computing).

V – Examples of IT Enablement.
E-Business: encompases all forms of Online electronic trading, consumer-based e-commerce, B2B
transactions, Internal use of IT.

Electronic Data Interchange EDI: The intercompany, computer-to-computer transfer of business


documents in a standard business format. (Example: Transmit purchase orders, invoices, and
payments electronically between trading partners).

Point of Sale System: A system of hardware and software that captures retail sales transactions by
standard bar coding. (Example: Customer checks out through the cash register, bar codes are
scanned on the items purchased, prices are determined by access to inventory and price list data,
sales revenue is recorded, and inventory values are updated).
Automated Matching: A computer system in which the software matches an invoice to its related
purchase order and receiving report. (enable all the documents from the same purchase to be
processed automatically / Example: Ford Motor Company described in text illustrated an automated
matching system).

Evaluated Receipt Settlement (ERS): An invoice-less system in which computer software completes
an invoice-less match that is a comparison of the purchase order with the goods received.
E-Payables and Electronic Invoice Presentment and Payment (EIPP): Web-enabled receipt and
payment of vendor invoices.

Enterprise Resource Planning Systems (ERP): Multi-module software system designed to manage all
aspects of an enterprise. Usual broken down into modules (financials, sales, purchasing, inventory
management, manufacturing, and human resources).

Blockchain Technology: Blockchain is a shared, immutable digital ledger or database. Blockchain


database stores data in blocks that are linked together in a chain. Blockchain technology is used to
create immutable ledger for tracking transactions, assets and payments.

VI - Internal Control Structure of Organizations.


Risks that impact financial standing:

1) Assets will be stolen or misused


2) Errors in accounting data or information
3) Fraudulent activity
4) Risks interent in IT systems such as: Erroneous input of data / Erroneous processing of data /
Computer fraud / Computer security breaches / Hardware or software failure / Natural
disasters.
Enterprise Risk Management (ERM): a process, effected by an entity’s board of directors,
management and other personnel, applied in strategy setting and across the enterprise, designed to
identify potential events that may affect the entity, and manage risk to be within its risk appetite, to
provide reasonable assurance regarding the achievement of entity objectives.

Management should ensure the following types of control structures exist:

1) Code of Ethics
2) COSO Accounting Internal Control Structure.
3) IT Controls
4) Corporate Governance
5) IT governance

VII – Importance of AIS to Accountants.


Accountants may be: Users of the AIS, part of the design or implementation team of an AIS, Auditors
of an AIS.

Relation of Ethics to AIS:

You might also like