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Hapter 1
Hapter 1
Accounting Information
Systems:
An Overview
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INTRODUCTION
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SYSTEMS, DATA, AND INFORMATION
• A system is:
– A set of interrelated components
– That interact
– To achieve a goal
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
Benefits of information
- Cost of producing information
Value of information
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SYSTEMS, DATA, AND INFORMATION
Benefits of information
- Cost of producing information
Value of information
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SYSTEMS, DATA, AND INFORMATION
Benefits of information
- Cost of producing information
Value of information
Costs and benefits of information are often
difficult to quantify, but you need to try when
you’re making decisions about whether to
provide information.
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
– Verifiability
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SYSTEMS, DATA, AND INFORMATION
– Accessibility
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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SYSTEMS, DATA, AND INFORMATION
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WHAT IS AN AIS?
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WHAT IS AN AIS?
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WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• Accounting is an information-providing
activity, so accountants need to
understand:
– How the system that provides that
information is designed, implemented,
and used.
– How financial information is reported.
– How information is used to make
decisions.
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WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• Other accounting courses focus on how
the information is provided and used.
• An AIS course places greater emphasis
on:
– How the data is collected and
transformed.
– How the availability, reliability, and
accuracy of the data is ensured.
• AIS courses are not number-crunching
courses.
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WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• The skills are critical to career success.
• Auditors need to evaluate the accuracy
and reliability of information produced by
the AIS.
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WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• The skills are critical to career success.
• Tax accountants must understand the
client’s AIS adequately to be confident that
it is providing complete and accurate
information for tax planning and
compliance work.
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WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• The skills are critical to career success.
• In private industry and not-for-profit,
systems work is considered the most
important activity performed by
accountants.
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WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• The skills are critical to career success.
• In management consulting, the design,
selection, and implementation of
accounting systems is a rapid growth area.
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WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• The skills are critical to career success.
• The AIS course complements other
systems courses.
• Other systems courses focus on design and
implementation of information systems,
databases, expert systems, and
telecommunications.
• AIS courses focus on accountability and
control.
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WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• The skills are critical to career success.
• The AIS course complements other
systems courses.
• AIS topics are tested on the new CPA
exam.
• Makes up about 25% of the Business
Environment & Concepts section of the CPA
exam.
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WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• The skills are critical to career success.
• The AIS course complements other
systems courses.
• AIS topics are tested on the new CPA
exam.
• AIS topics impact corporate strategy
and culture.
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WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
Occupational
Culture Strategy
AIS design is
affected by AIS
information
technology, the
organization’s
strategy, and the
organization’s Information
culture. Technology
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WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
Occupational
Culture Strategy
Information technology
affects the company’s AIS
choice of business
strategy. To perform
cost-benefit analyses on
IT changes, you need to
understand business Information
strategy. Technology
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WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
Occupational
Culture Strategy
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
Blah—blah—blah–
customer service–
blah—blah—blah
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
• Support activitiesBuying
include:
the resources (e.g.,
materials, inventory, fixed
– Firm infrastructure
assets) needed to carry out the
– Human resources entity’s primary activities.
– Technology
In the pharmaceutical company,
– Purchasing the purchasing folks are trying
to get the best combination of
cost and quality in buying
chemicals, supplies, and other
assets the company needs to
run its operations.
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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ROLE OF THE AIS IN THE VALUE CHAIN
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THE AIS AND CORPORATE STRATEGY
• Corporations have:
– Unlimited opportunities to invest in
technology.
– Limited resources to invest in technology.
• Consequently, they must identify the
improvements likely to yield the highest
return.
• This decision requires an understanding of
the entity’s overall business strategy.
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THE AIS AND CORPORATE STRATEGY
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THE AIS AND CORPORATE STRATEGY
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THE AIS AND CORPORATE STRATEGY
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THE AIS AND CORPORATE STRATEGY
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THE AIS AND CORPORATE STRATEGY
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THE AIS AND CORPORATE STRATEGY
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THE AIS AND CORPORATE STRATEGY
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THE AIS AND CORPORATE STRATEGY
• Porter also
• Serve argues
a subset that companies
of customers who differmust
from
choose
othersainstrategic position
terms of factors among
such three
as geographic
location or size.
choices:
• EXAMPLE: Satellite Internet services are
– Variety-based strategic position
intended primarily for customers in rural areas
– Needs-based strategic
who cannot get position
DSL or cable services.
– Access-based strategic position
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THE AIS AND CORPORATE STRATEGY
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THE AIS AND CORPORATE STRATEGY
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THE AIS AND CORPORATE STRATEGY
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THE AIS AND CORPORATE STRATEGY
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THE AIS AND CORPORATE STRATEGY
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SUMMARY
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