Accounting Information System

Dhiona Ayu Nani, S.E., M.Sc.

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System
Two or more set of components that relate and
interact to achieve the objectives.

Consists of smaller sub systems that support the bigger

system.
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Example of system

University Faculty Majors

Sub systems is designed to achieve one or more

organization objectives.
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System
Goal Congruence
When the sub systems achieve
the objectives in contributing to
overall organization objectives
Goal Conflict
When the objectives of one sub
system inconsistent with other sub
systems.

The bigger the organization with more complex system, the

harder to achive goal congruence.
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Data
Facts that collected, stored and processed by the
information system
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Information
Data that has been managed and processed to give meaning and
improve the decision making process
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Information Overloaded
Excess information absorbed which results in a decrease in the
quality of decision making
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Cost of producing
Benefits of
information
information
• Collecting data
• Reduction of
• Processing data
uncertainty
• Storing data
• Improved decisions
• Distributing
• Improved ability to
information to users
plan and schedule
activities
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useful information characteristics

timeliness

complete understandable

reliable verifiable

relevant accessible

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useful information characteristics

✖ Relevance

It reduces uncertainty by helping you predict

what will happen or confirm what already has
happened.
✖ Reliability

It’s dependable, i.e., free from error or bias and

faithfully portrays events and activities.
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useful information characteristics

✖ Completeness

It doesn’t leave out anything that’s important.

✖ Timeliness

You get it in time to make your decision.

✖ Understandability

It’s presented in a manner you can comprehend and

use.
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useful information characteristics

✖ Verifiability

A consensus notion—the nature of the information

is such that different people would tend to produce
the same result.
✖ Accessibility

You can get to it when you need it and in a format

you can use.
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Information is provided to both:

External users

Internal users
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WHAT IS AN AIS?

✖ An AIS is a system that collects, records,

stores, and processes data to produce
information for decision makers.
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WHAT IS AN AIS?
✖ It can:
○ Use advanced technology; or
○ Be a simple paper-and-pencil system; or
○ Be something in between.

✖ Technology is simply a tool to create,

maintain, or improve a system.
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The functions of an AIS are to:

○ Collect and store data about events, resources, and
agents.
○ Transform that data into information that
management can use to make decisions about
events, resources, and agents.
○ Provide adequate controls to ensure that the entity’s
resources (including data) are:
■ Available when needed
■ Accurate and reliable
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WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?

o 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.
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WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?

o The skills are critical to career success.

• Auditors
• Tax accountants
• Management consulting
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WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?

o 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?

o AIS topics are tested on the new CPA exam.

Makes up about 25% of the Business Environment & Concepts

section of the CPA exam.

o 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 culture.
Information
Technology