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Accounting Information System 1

The document discusses key aspects of an accounting information system (AIS), including: 1) An AIS stores data about transactions, resources, and people that must be captured to track activities that affect the accounting cycle. 2) This data is organized into meaningful information through contexts like sales invoices. Information is most useful when it increases understanding while avoiding overload. 3) For information to be valuable, the benefits of having it must outweigh the costs of gathering, maintaining, and storing it. Benefits include better decision making while costs include resources to extract and analyze data. 4) Useful information in an AIS is relevant, reliable, complete, timely, understandable, verifiable, and accessible

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Aureen Tabamo
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47 views

Accounting Information System 1

The document discusses key aspects of an accounting information system (AIS), including: 1) An AIS stores data about transactions, resources, and people that must be captured to track activities that affect the accounting cycle. 2) This data is organized into meaningful information through contexts like sales invoices. Information is most useful when it increases understanding while avoiding overload. 3) For information to be valuable, the benefits of having it must outweigh the costs of gathering, maintaining, and storing it. Benefits include better decision making while costs include resources to extract and analyze data. 4) Useful information in an AIS is relevant, reliable, complete, timely, understandable, verifiable, and accessible

Uploaded by

Aureen Tabamo
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
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Accounting information system

Data

are facts stored in the system (Objectivity, these factual evidence are based on
documents, they are stored and processed in the AIS)

Data about activities that must be captured in the AIS

Act of transactions- anything that affects the ALE

resources- Quantity of inventory sold, amount of cash received, ar that is


charged to customers

People

Customer

Employee - may be a sales agent that must be compensated based on


the accrued sales of the sales department.

Information

if we put the facts within the context of the sales invoice, for example, it is
meaningful and considered information.

🗯 AS A RULE: Users make better decisions when quantity information


increases, the quality of the information also increases.

there are limitations as it can cause information overload.

How big is the data that each business entity needs?

Volume

Gaano karami yung data

Velocity

speed— it should be timely

Accounting information system 1


Variety

Almost only .5% of data is being used.

Structured data- formatted


Unstructured data - special softwares are used to decode the data to be used as data
source

Value of information

Information is valuable when the benefits exceed the costs of gathering,


maintaining, and storing the data.

🗯 benefit produced by info- cost of producing the info

benefit must be higher than the cost

Benefit

Reduce uncertainty to risk

improved decision

improved ability to plan

Cost

time spent to extract

data mining- make data queries

resources to get such information

Characteristics of Useful information

Relevant

Information needs to make a decision; reduces uncertainty and risk is now


manageable.

Reliable

Accounting information system 2


Information free from bias or material error; It must be accurately
presented. It reports fairly

Complete

does not omit important aspects of event or activities; unfiltered


information

Timely

Velocity of information; it must be given on time.

Understandable

must be presented in a meaningful manner; must be in intelligible format


which is why we have standards

Verifiable

Accessible

AS THE NEED ARISES the information must be available

ORGANIZATIONAL DECISIONS AND INFORMATION NEEDED

business orgs use business processes (coordinated and structured and —-)
These processes are a set of structured activities that are performed by people,
machines or both to achieve specific goals.

Key decisions

what should be decided?


( for example, ano ibebenta ko? need ng market study)

what info is needed?

how are these data gathered?

Transactional Information between internal and external parties in an AIS

Transaction- could be an agreement between two entities that involves


exchange of goods and services with economic value.

Accounting information system 3


Transaction Processing- Starts with data capturing and ends with
information output to be disseminated to your external and internal
stockholders.

Transaction cycles - transactions between the business org and external parties
fundamentally involve a "give-get" exchange.

Components of AIS

People- the end users of information system

Processes - includes Procedures and Instructions

Technology

Data

Software

IT

Controls and Software informations

internal control

Popular ERP Systems

SAP

Widely used system

For SME

Subsystems are called modules

Administrations

Financials

Oppotunities

Sales

Accounts Receivable

Microsoft Dynamic 365

Accounting information system 4


Oracle

How does AIS add value to the firm?


A well thought out AIS can add value through effective( function and viable) and
efficient (less costly) decisions.

Having effective decisions mean QUALITY decisions

Query language

Having effective decisions means reducing COSTS of decision making

Avoids fraud, system failure(blackout) , and Disaster (corruption of data file)

AIS and Strategy


AIS→ Information Technology → Business Strategy→ Organizational Culture

Accounting information system 5

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