Professional Documents
Culture Documents
Accounting Information System
Accounting Information System
HAPTER 1
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
INTRODUCTION
• Questions to be addressed in this chapter include:
– What is the meaning of system, data, and information?
– What is an accounting information system (AIS)?
– Why is the AIS an important topic to study?
– What is the role of the AIS in the value chain?
– How does the AIS provide information for decision
making?
– What are the basic strategies and strategic positions an
organization can pursue?
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
• A system is:
– A set of interrelated components
– That interact
– To achieve a goal
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
Benefits of information
- Cost of producing information
Value of information
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
Benefits of information
- Cost of producing information
Value of information
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SYSTEMS, DATA, AND INFORMATION
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
WHAT IS AN AIS?
• An AIS is a system that collects, records,
stores, and processes data to produce
information for decision makers.
• 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.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
WHAT IS AN AIS?
• 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
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
WHY STUDY ACCOUNTING INFORMATION
SYSTEMS?
Occupational
Culture Strategy
Although culture
affects the design of
AIS
the AIS, it’s also true
that the AIS affects
culture by altering
the dispersion and
availability of Information
information. Technology
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
Blah—blah—blah–
customer service–
blah—blah—blah
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
ROLE OF THE AIS IN THE VALUE CHAIN
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
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.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
• Porter also
• Serve arguesofthat
a subset companies
customers mustfrom
who differ
choose a strategic
others in terms ofposition among
factors 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
who cannot strategic
get DSL orposition
cable services.
– Access-based strategic position
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
THE AIS AND CORPORATE STRATEGY
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SUMMARY
• What we’ve learned so far:
– The meaning of system, data, and information.
– What an AIS is.
– Why it’s an important topic to study.
– What its role is in the value chain.
– How it provides information for decision making.
– What are the basic strategies and strategic positions an
organization can pursue.
• How these interact with the AIS.
© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart