THE INFORMATION SYSTEM:

AN ACCOUNTANT’S
PERSPECTIVE

By:
Aldovino, Jovy
Andrade Lizette
Bañez, Rhodalyn
Datingaling, Richmon
Sayco, Aira Crissandra
BSA-5101
 ORGANIZATIONAL STRUCTURE

• Reflects the distribution of responsibility,

authority, and accountability throughout the
organization.
• To achieve overall objectives, firms establish
measurable financial goals.
• Understanding the distribution pattern of
responsibility, authority, and accountability is
essential for assessing user information
needs.
 BUSINESS SEGMENTS &SEGMENTATION

• Firms organize into segments to promote

internal efficiencies through the specialization
of labor and cost-effective resource
allocations.

• Managers focus on narrow areas of

responsibility to achieve higher levels of
operating efficiency.
COMMON APPROACH OF SEGMENTATION

• Geographic Location - to gain access to

resources, markets or lines of distribution.

• Product Line/Product Segmentation-allows

organization to devote specialized
management, labor and resources to
segments separately, almost as if they were
separate firms.
COMMON APPROACH OF SEGMENTATION

• Business Function
– divides the organization into areas of specialized
responsibility based on tasks.
– According to the flow of resources through the
firm.

“Some firms use more than one method of

segmentation.”
FUNCTIONAL SEGMENTATION
– Most common method of organizing.
– Titles of functions and functions themselves will vary
depending to the size and nature of business.
RESOURCES: BUSINESS FUNCTION:
• Inventory/Materials Management
– purchasing, receiving and stores
• Production
MATERIALS
– production planning, quality
control, and maintenance
• Marketing
• Distribution
LABOR • Personnel/Human Resource
CAPITAL • Finance
• Accounting
INFORMATION
• Computer Services
MATERIALS MANAGEMENT
• Objective is to plan and control the materials
inventory of the company.
• Firms must have sufficient inventories on hand.
• Subfunctions:
– Purchasing - responsible for ordering inventories at
reorder points.
– Receiving – task of accepting the inventory ordered.
• Counting and checking condition
– Stores – takes physical custody of inventory and releases
to production when needed.
PRODUCTION
• Conversion of Raw Materials, Labor, and Plant Assets to create
finished products.
• Specific Activities can be:
– Primary Manufacturing Activities
– Production Support Activities
• Production Planning-scheduling the flow of materials,
labor and machinery to meet product needs.
• Quality Control-monitors manufacturing process to
ensure that finished products meet the quality
standards.
• Maintenance-keeps the firm’s machinery and other
manufacturing facilities in running order.
MARKETING
• Deals with the strategic problems of product
promotion, advertising, and market research.

DISTRIBUTION
• Activity of getting the product to the customer
after the sale.
• Critical step.
PERSONNEL
• Sometimes called Human Resource.
• Includes recruiting, training, continuing education,
counseling, evaluating, labor relations and
compensation administration.

FINANCE
• Deals with management of financial resources
through banking and treasury activities, portfolio
management, credit evaluation, cash disbursements,
and cash receipts.
• Administers the daily flow of cash in and out of the
firm.
 ACCOUNTING FUNCTION
• Manages financial information resource of the firm.
• Roles:
1. Capturing and recording financial effect of transactions
• Movement of raw materials into production
• Shipments of finished products to customer
• Cash flows into the firm and deposits in the bank
• Acquisition of inventory
• And Discharge of financial obligations
2. Distributing transaction information to operations personnel
to coordinate many of their key tasks.
• Inventory Control
• Cost accounting
• Payroll
VALUE OF INFORMATION
• Information to be reliable must possess
attributes such as:
– Relevance
– Accuracy
– Completeness
– Summarization and Timeliness.
• “Unreliable Information has no value”
ACCOUNTING INDEPENDENCE

• Information reliability requires accounting

independence.
– Accounting activities must be separate and
independent of the functional areas maintaining
resources.
– Accounting supports these functions with
information but does not actively participate in
the physical activities.
 INFORMATION TECHNOLOGY
Distributed Data Centralized Data
Processing Most companies fall in between. Processing

Reorganizing the All data processing

is performed by
computer services one or more large
function into small computers housed
information processing at a central site
units that are distributed that serves users
to end users and throughout the
organization.
placed under their control
Primary areas:
database administration
data processing
systems development
CENTRALIZED DATA PROCESSING
CENTRALIZED SYSTEM IN BUSINESS ORGANIZATION

Conversion
 Distributed Data Processing
It involves reorganizing the IT function into
small information processing units (IPUs) that
are distributed to end users and placed under
their control.
IPUs may be distributed according to business
function, geographic location or both.
In recent years, DDP has become an economic
and operational feasibility that has
revolutionized business operations.
 Disadvantages of DDP
• Mismanagement of organization-wide
resources
• Hardware and software incompatibility
• Redundant tasks
• Consolidating incompatible activities
• Hiring qualified professionals
• Lack of standards
 Advantages of DDP
• Cost reduction
- DPP can reduce cost in two other areas:
 Data can be entered and edited at the IPU
 Application complexity can be reduced
• Improved cost control responsibility
• Improved user satisfaction
• Backup
 Need for Careful Analysis
DDP carries a certain leading-edge prestige
value that, during an analysis of its pros and
cons, may overwhelm important
considerations of economic benefit and
operational feasibility.
 Evolution of Information
System Models
Over the past 50 years, a number of different
approaches or models have represented
accounting information systems. Each new
model evolved because of shortcomings and
limitations of its predecessor. An interesting
feature in evolution is that the newest
technique does not immediately replace old
model.
 Manual Process Model
Merit in studying manual process model before
computer-based system.
• Learning manual systems help establish an
important link between AIS course and other
accounting courses.
• The logic of a business process is more easily
understood when it is not shrouded by
technology.
• Manual procedures facilitate understanding
internal control activities.
 Flat-File Model
The flat-file approach is most often associated
with so-called legacy systems which are large
mainframe systems that were implemented in
the late 1960s through 1980s.
This model is described as environment in
which individual data files are not related to
other files.
Problems Associated with Flat Files
• Data Storage
– An efficient information system captures and
stores data only one and makes single source
available to all users who need it.
• Data Updating
– Organizations have great deal of data stored in
files that requires periodic updating to reflect
changes.
 continuation
• Currency of Information
– If update information is not properly disseminated,
the change will not be reflected in some user’s data,
resulting in decisions based on outdated information.
• Task-Data Dependency
– Another problem with flat file approach is the user’s
inability to obtain additional information as his or her
needs change.
• Flat Files Limit Data Integration
– The flat-file approach is a single-view model. Files are
structured, formatted and arranged to suit the
specific needs of owner or primary user of data.
 Database Model
Database Management System (DBMS) is a
special software system that is programmed to
know which data elements each user is
authorized to access.
The most striking difference between the
database model and flat-file model is the
pooling of data into common database that all
organizational user shares.
 Traditional problems associated with flat-file
approach that may be overcome through data
sharing:
• Elimination of data redundancy
– Each data element is stored only once, thereby
eliminating data redundancy and reducing data
collection and storage costs.
• Single update
– It requires only a single update procedure.
• Current values
– A single change to a database attribute is
automatically made available to all users of attributes.
Flat-file system and early database systems are
called traditional systems. Within this context,
the term traditional means that the
organization’s information system applications
function independently of each other rather
than as an integrated whole.
Relational database model- a flexible database
approach that permits the design of
integrated systems applications capable of
supporting the information needs of multiple
users from a common set of integrated
database tables.
THANK YOU!!!