Romney accounting information system ch 01

Sistem informasi akuntansi

1. Accounting Information Systems: An Overview Chapter 1 1 -1

2. Learning Objectives Distinguish between data and information: Understand the characteristics of useful information. Explain how to determine the value of information. Explain fundamental decisions an organization makes: Understand basic information needed to make them. Identify the transactional information that passes between internal and external parties and an AIS. Describe the major business processes present in most companies. Explain what an accounting information system (AIS) is and describe its basic functions. Discuss how an AIS can add value to an organization. Explain how an AIS and corporate strategy affect each other. Explain the role an AIS plays in a company’s value chain. 1- 2

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8. Data vs. Information Data are facts stored in the system A fact could be a number, date, name, and so on. For example : 2/22/14 ABC Company, 123, 99, 3, 20, 60 1- 8

9. Data vs. Information The previous slide just showed facts, if we put those facts within a context of a sales invoice, for example, it is meaningful and considered information . Invoice Date : 2/22/14 Invoice #: 123 Customer: ABC company Item # Qty Price 99 3 $20 Total Invoice Amount $60 1- 9

10. What is information? The term data refers to any and all of the facts that are collected, stored, and processed by an information system. Information is data that has been organized and processed so that it is meaningful 10

11. Value of Information Information is valuable when the benefits exceed the costs of gathering, maintaining, and storing the data. Benefit (i.e., improved decision making) > Cost (i.e., time and resources used to get the information) 1- 11

12. What Makes Information Useful? There are seven general characteristics that make information useful: Relevant: information needed to make a decision (e.g., the decision to extend customer credit would need relevant information on customer balance from an A/R aging report) Reliable: information free from bias Complete: does not omit important aspects of events or activities Timely: information needs to be provided in time to make the decision 1- 12

13. What Makes Information Useful? Understandable: information must be presented in a meaningful manner Verifiable: two independent people can produce the same conclusion Accessible: available when needed 1- 13

14. Organizational Decisions and Information Needed Business organizations use business processes to get things done. These processes are a set of structured activities that are performed by people, machines, or both to achieve a specific goal. Key decisions and information needed often come from these business processes. 1- 14

15. Transactional Information Between Internal and External Parties in an AIS Business organizations conduct business transactions between internal and external stakeholders. Internal stakeholders are employees in the organization (e.g., employees and managers). External stakeholders are trading partners such as customers and vendors as well as other external organizations such as Banks and Government. The AIS captures the flow of information between these users for the various business transactions. 1- 15

16. Interactions Between AIS and Internal and External Parties 1- 16

17. Basic Business Processes Transactions between the business organization and external parties fundamentally involve a “give–get” exchange. These basic business processes are: Revenue: give goods / give service—get cash Expenditure: get goods / get service—give cash Production: give labor and give raw materials—get finished goods Payroll: give cash—get labor Financing: give cash—get cash 1- 17

18. What Is an Accounting Information System? It can be manual or computerized Consists of People who use the system Processes Technology (data, software, and information technology) Controls to safeguard information Thus, transactional data is collected and stored into meaningful information from which business decisions are made and provides adequate controls to protect and secure the organizational data assets. 1- 18

19. How Does an AIS Add Value? A well thought out AIS can add value through effective and efficient decisions. Having effective decisions means quality decisions Having efficient decisions means reducing costs of decision making 1- 19

20. AIS and Strategy An AIS is influenced by an organization’s strategy. A strategy is the overall goal the organization hopes to achieve (e.g., increase profitability). Once an overall goal is determined, an organization can determine actions needed to reach their goal and identify the informational requirements necessary to measure how well they are doing in obtaining that goal. 1- 20

21. AIS in the Value Chain The value chain shows how the different activities within an organization provide value to the customer. These activities are primary and support activities. Primary activities provide direct value to the customer. Support activities enable primary activities to be efficient and effective. 1- 21

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24. Key Terms System Goal conflict Goal congruence Data Information Information technology (IT) Information overload Value of information Business process Transaction Transaction processing Give-get exchange Revenue cycle Expenditure cycle Production (conversion) cycle Human resource/payroll cycle Financing cycle General ledger and reporting system Accounting information system (AIS) Predictive analytics Value chain Primary activities Support activities Supply chain 1- 24

25. Overview of Transaction Processing and Enterprise Resource Planning Systems Chapter 2 2-1

26. Learning Objectives Describe the four parts of the data processing cycle and the major activities in each.   Describe documents and procedures used to collect and process transaction data. Describe the ways information is stored in computer-based information systems.   Discuss the types of information that an AIS can provide.   Discuss how organizations use enterprise resource planning (ERP) systems to process transactions and provide information. 2- 26

27. Data Processing Cycle 2- 27

28. Data Input Steps in Processing Input are: Capture transaction data triggered by a business activity (event). Make sure captured data are accurate and complete. Ensure company policies are followed (e.g., approval of transaction). 2- 28

29. Data Capture Information collected for an activity includes: Activity of interest (e.g., sale) Resources affected (e.g., inventory and cash) People who participated (e.g., customer and employee) Information comes from source documents. 2- 29

30. Source Documents Captures data at the source when the transaction takes place Paper source documents Turnaround documents Source data automation (captured data from machines, e.g., Point of Sale scanners at grocery store) 2- 30

31. Data Storage Important to understand how data is organized Chart of accounts Coding schemas that are well thought out to anticipate management needs are most efficient and effective. Transaction journals (e.g., Sales) Subsidiary ledgers (e.g., Accounts receivable) General ledger Note: With the above, one can trace the path of the transaction (audit trail). 2- 31

32. Audit trail for Invoice #156 for $1,876.50 sold to KDR Builders 2- 32

33. Computer-Based Storage Data is stored in master files or transaction files. 2- 33

34. Data Processing Four types of processing (CRUD): C reating new records (e.g., adding a customer) R eading existing data U pdating previous record or data D eleting data Data processing can be batch processed (e.g., post records at the end of the business day) or in real-time (process as it occurs). 2- 34

35. Information Output The data stored in the database files can be viewed Online (soft copy) Printed out (hard copy) Document (e.g., sales invoice) Report (e.g., monthly sales report) Query (question for specific information in a database, e.g., What division had the most sales for the month?) 2- 35

36. Enterprise Resource Planning Perencanaan sumber daya perusahaan ( ERP ) adalah sistem informasi yang diperuntukkan bagi perusahaan manufaktur maupun jasa yang berperan mengintegrasikan dan mengotomasikan proses bisnis yang berhubungan dengan aspek operasi , produksi   maupun   distribusi di perusahaan bersangkutan 36

37. Enterprise Resource Planning (ERP) Systems Integrates activities from the entire organization Production Payroll Sales Purchasing Financial Reporting Sistem ERP secara modular biasanya menangani proses manufaktur , logistik , distribusi , persediaan (inventory), shipping, invoice, dan akuntansi perusahaan . Sistem membantu mengontrol aktivitas bisnis seperti penjualan , pengiriman , produksi , manajemen persediaan , manajemen kualitas , dan sumber daya manusia . ERP merupakan  Back Office System yang mengindikasikan bahwa pelanggan dan publik secara umum tidak dilibatkan dalam sistem ini 2- 37

38. Advantages of ERP System Integrated enterprise-wide allowing for better flow of the information as it’s stored in a centralized database and can be accessed by various departments which also improves customer service. Data captured once (i.e., no longer need sales to enter data about a customer and then accounting to enter same customer data for invoicing) Improve access of control of the data through security settings Standardization of procedures and reports ( Menstandarkan data dan informasi melalui keseragaman pelaporan , terutama untuk perusahaan besar yang biasanya terdiri dari banyak unit business dengan jumlah dan jenis bisnis yg berbeda-beda ) . 2- 38

39. Disadvantages of ERP System Costly Significant amount of time to implement Complex User resistance (learning new things is sometimes hard for employees) 2- 39

40. Key Terms Data processing cycle Source documents Turnaround documents Source data automation General ledger Control account Coding Sequence code Block code Group code Mnemonic code Chart of accounts General ledger Specialized journal Audit trail Entity Attributes Field Record Data value File Master file Transaction file Database Batch processing Online, real-time processing Document Report Query Enterprise resource planning (ERP) system 2- 40