AIS-2024 introduction and techniques.pptx

Accounting Information System

1. ACCOUNTING INFORMATION SYSTEM (AIS) Presentation O outline: Meaning and components of AIS Functions of AIS Types of AIS Benefits and challenges of AIS Documentation types and techniques 19/10/2024 Dr Fauz M. Khamis 1

2. Definition An Accounting Information System (AIS) is a system that collects, stores, and processes financial and accounting data to provide reports that help in decision-making. The main purpose of AIS is to support the functions of accounting, financial reporting, and decision making for management, investors and other stakeholders. 19/10/2024 Dr Fauz M. Khamis 2

3. Components of AIS People: Users who operate the system (e.g., accountants, managers). Procedures and Instructions: Methods for collecting and processing data. Data: Information that is processed into meaningful reports. Software: Programs that manage and analyze financial data. Information Technology Infrastructure: Hardware and networks that support the system. Internal Controls: the policies, procedures and mechanism in place to ensure data accuracy, security and reliability. 19/10/2024 Dr Fauz M. Khamis 3

4. Functions of AIS Data Collection: Gathering financial transactions and other relevant data. Data Processing: Recording, classifying, and summarizing financial data. Information Generation: Producing financial reports, budgets, and performance analysis. Decision Support: Providing information for management decisions. 19/10/2024 Dr Fauz M. Khamis 4

5. Types of AIS Transaction Processing Systems (TPS): Handle daily transactions (e.g., sales, purchases). Management Information Systems (MIS): Provide information for management decision-making. Decision Support Systems (DSS): Help in analyzing data for decision-making. Enterprise Resource Planning (ERP): Integrate all facets of an organization’s operations. 19/10/2024 Dr Fauz M. Khamis 5

6. Key Reports Generated Income Statement: Shows revenue and expenses over a period. Balance Sheet: Snapshot of assets, liabilities, and equity at a specific time. Cash Flow Statement: Summary of cash inflows and outflows. 19/10/2024 Dr Fauz M. Khamis 6

7. Internal Controls in AIS Segregation of Duties: Different people handle different parts of a transaction to reduce fraud. Access Controls: Restricting access to financial data to authorized users. Audit Trails: Maintaining records of all transactions for auditing purposes. 19/10/2024 Dr Fauz M. Khamis 7

8. Challenges in AIS Data Security: Protecting sensitive financial data from breaches. System Integration: Ensuring various systems work together effectively. Regulatory Compliance: Adhering to laws and standards in financial reporting. 19/10/2024 Dr Fauz M. Khamis 8

9. Emerging Trends Cloud Computing: Increasing use of cloud-based AIS for flexibility and scalability. Automation and AI: Implementing AI for data analysis and reporting. Real-Time Reporting: Providing immediate financial insights. 19/10/2024 Dr Fauz M. Khamis 9

10. System documentation in an Accounting Information System (AIS) System documentation in an Accounting Information System (AIS) is essential for ensuring clarity, compliance, and efficient use of the system. 19/10/2024 Dr Fauz M. Khamis 10

11. Purpose of Documentation in AIS Clarity: Helps users understand system operations and processes. Training: Serves as a resource for training new users. Compliance: Ensures adherence to regulations and internal policies. Maintenance: Aids in troubleshooting and system updates 19/10/2024 Dr Fauz M. Khamis 11

12. Types of AIS Documentation techniques User Documentation User Manuals: Guides that explain how to use the AIS, including step-by-step instructions for common tasks. Quick Reference Guides: Summaries of essential functions and commands for quick access. Help Files: In-system documentation that provides context-sensitive help. 19/10/2024 Dr Fauz M. Khamis 12

13. Types of AIS Documentation …… System Documentation System Overview: A description of the AIS architecture, including hardware, software, and network components. Data Flow Diagrams (DFDs): Visual representations of how data flows within the system, showing inputs, processes, and outputs. Entity-Relationship Diagrams (ERDs): Illustrate the relationships between different data entities within the system. 19/10/2024 Dr Fauz M. Khamis 13

14. Types of AIS Documentation…… Process Documentation Business Process Descriptions: Detailed explanations of business processes supported by the AIS, such as order processing, billing, and payroll. Standard Operating Procedures (SOPs): Step-by-step procedures for executing specific tasks within the AIS. 19/10/2024 Dr Fauz M. Khamis 14

15. Types of AIS Documentation …… Technical Documentation System Specifications: Detailed technical requirements and specifications for the AIS, including hardware and software requirements. Database Documentation: Information on database structure, including tables, fields, and relationships. Interface Specifications: Descriptions of how the AIS interfaces with other systems (e.g., ERP, CRM ). 19/10/2024 Dr Fauz M. Khamis 15

16. Types of AIS Documentation …… . Internal Control Documentation Control Procedures: Documentation of internal controls implemented within the AIS to safeguard assets and ensure accurate reporting. Risk Assessments: Analysis of potential risks related to the AIS and the measures in place to mitigate them. 19/10/2024 Dr Fauz M. Khamis 16

17. Benefits of Effective Documentation Improved Efficiency: Streamlined processes and easier onboarding of new users. Enhanced Accuracy: Reduced errors due to clear instructions and established procedures. Regulatory Compliance: Documentation serves as proof of adherence to accounting standards and regulations. 19/10/2024 Dr Fauz M. Khamis 17

18. Individual ASSIGNMENT Consider a hypothetical example of a small retail business called “ TrendyStyles Boutique” that decides to implement an Accounting Information System (AIS) to manage its financial data and streamline its accounting processes. REQUIRED: Suggest the important components for TrendyStyles Boutique’s AIS SUBMIT THROUGH EMAIL: [email protected] 19/10/2024 Dr Fauz M. Khamis 18

19. THANKS FOR LISTENING 19/10/2024 Dr Fauz M. Khamis 19