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Accounting Information Systems and Business Processes

This document provides an overview of key concepts in accounting information systems and business processes. It discusses the accounting cycle, coding systems, inputs and outputs of various business processes like sales, purchasing, HR management, and financing. It also covers internal control systems, the components of internal control (control environment, risk assessment, control activities, information and communication, monitoring), examples of control activities, and evaluating controls. The document is structured as a textbook chapter covering fundamental concepts.

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Jasper Anthony Cruz
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52 views36 pages

Accounting Information Systems and Business Processes

This document provides an overview of key concepts in accounting information systems and business processes. It discusses the accounting cycle, coding systems, inputs and outputs of various business processes like sales, purchasing, HR management, and financing. It also covers internal control systems, the components of internal control (control environment, risk assessment, control activities, information and communication, monitoring), examples of control activities, and evaluating controls. The document is structured as a textbook chapter covering fundamental concepts.

Uploaded by

Jasper Anthony Cruz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Accounting

Information Systems
and Business
Part I
Processes

CHAPTER 7

Business Process
Fundamentals

Overview of Financial Accounting


Cycle
Journals
Ledgers
Trial Balances and Financial
Statements

Coding Systems
Numeric Codes (numbers only)
Alphanumeric Codes (numbers and letters)
Types of Codes:

Mnemonic Codes
Sequence Codes
Block Codes
Group Codes

S M L XL

- Factors to consider when designing an


accounting code:
Must serve some useful purpose
Must be consistent

Outputs of an AIS

Reports to management
Reports to investors and creditors
Files that retain transaction data
Files that retain current data (e.g.
inventory records)
Hard copy reports
Soft copy reports
E- copy reports
Audio outputs

Designing Reports

Characteristics of Good
Reports
Useful
Convenient format
Easy to identify
Heading
Page number
Date

Consistent
Over time
Across departmental or divisional levels
With general accounting practice

Source Documents:
They dictate the kind of data to be
collected and help ensure consistency
and accuracy in recording data
They encourage the completeness of
accounting data
They serve as distributors of information
for individuals or departments
They help establish the authenticity of
accounting data

SALES
PROCES
S

Inputs to sales
process

Outputs to sales
process

Financial statement
Sales order
information
Sales invoice
Customer billing
Remittance advice statement
Aging report
Shipping notice
Bad debt report
Debit/ credit
Cash receipts
memoranda
forecast
Customer listing
Sales analysis report

PUCHASIN
G PROCESS

Inputs to
purchasing process
Purchase
requisition
Purchase order
Vendor listing
Receiving report
Bill of lading
Packing slip
Debit/ credit
memoranda

Outputs to
purchasing
process
Financial statement
information
Vendor checks
Check register
Discrepancy reports
Cash requirements
forecast
Sales analysis report

Current trends in business


processes
Business process outsourcing
Business without boundaries
Offshoring

Business process management


software

Accounting
Information Systems
and Business
Part II
Processes

CHAPTER 8

Human resource management


process

Inputs to HR
management
process
Personnel action
forms
Time sheets
Payroll deduction
authorization
Tax withholding
forms

Outputs to HR
management
process
Financial statement
information
Employee listings
Paychecks
Check register
Deduction reports
Tax (regulatory)
reports
Payroll summaries

Fixed asset management processing

Inputs to fixed Outputs to fixed


asset
asset
management
management
process
process
Purchase
requisition Financial
statement
Receiving reports

Supplier invoices

Construction work

orders
Repair and
maintenance records
Fixed asset change
forms

information
Fixed asset register
Depreciation register
Repair and
maintenance report
Retired asset report

The production process

Job costing information system


Process costing information
system
Activity based costing
Just in time inventory systems
Lean production/ manufacturing
Lean accounting

Inputs to
production
process

Materials
requisition form
Bill of materials
Master production
schedule
Production order
Job time cards

Outputs to
production
process

Financial statement
information
Material price list
Periodic usage reports
Inventory status
reports
Production cost
reports
Manufacturing status
reports

The financing process

Inputs to
financing
process

Remittance advice
Deposit slips
Checks
Bank statements
Stock market data
Interest data
Financial institution
profiles

Outputs to
financing
process

Financial statement
information
Cash budget
Investment reports
Debt and interest
reports
Financial ratios
Financial planning
model reports

Professional service
organizations
No merchandise inventory
Emphasis on professional employees
Difficulty in measuring the quantity
and quality of output
Small size
TIME AND BILLING INFORMATION
SYSTEM

Not-for-profit organizations
Staffed by volunteers as well as
professional employees
Do not emphasize maximizing net
income
Not as affected by market forces as
are for-profit organizations
Sometimes have political emphasis
FUND ACCOUNTING SYSTEM

Health care organizations


Do not provide tangible goods to
customers
Staffed by professional employees
Public
Operate on a not-for-profit basis
Output is difficult to measure

THIRD PARTY BILLING

Business process reengineering


Continuous process that involves the
analysis of identifying areas for
improvement of an existing process

CHAPTER 9

Introduction to
Internal Control
Systems

Sarbanes-Oxley Act of 2002


Section 404
Management is responsible for
establishing and maintaining an
adequate internal control structure

Internal Control System


Four objectives
Safeguard assets
Check the accuracy and reliability of
accounting data
Promote operational efficiency
Enforce prescribed managerial policies

Control Environment
Managements oversight, integrity and ethical
principles that guide an organization
Attention and direction of the board of directors
Top managements philosophy and operating style

Policies and procedures that management


develops
To assign authority and responsibility across the
organization
To develop its employees

Risk Assessment
Purpose
Identify organizational risk
Analyze their potential in terms of costs
and likelihood of occurrence
Implement only those controls whose
projected benefits outweigh their costs

Control Activities

Policies and procedures that the


management develops to protect its
assets
Information
and Communication

Inform employees about their roles and


responsibilities pertaining to internal control

Monitoring

Evaluation of design and operation of controls


and then initiative corrective action when
specific controls are not functioning properly

Updates on Risk Assessment


2004 Enterprise Risk Management
Framework
objective setting
Event identification
Risk response

Examples of control
activities
Good audit trail
Sound personnel policies and
procedures
Separation of duties
Physical protection of assets
Inventory controls
Document controls
Cash controls

Review of operating performance

Types of controls
Preventive controls
Detective controls
Corrective controls

Evaluating controls
Cost-benefit analysis
A risk matrix

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