AIS - PRELIMS (CHAP. 1) Flashcards
are specialized
subset of information systems that processes financial
transactions
Accounting information systems (AIS)
are the flows of information into and
out of an organization
Information flows
is a category of external user, including
customer sales and billing information, purchase
information for suppliers, and inventory receipts
information
Trading partners
are entities either inside or outside an
organization that have a direct or indirect interest in the
firm
Stakeholders
INFORMATION OBJECTIVES
* Three fundamental objectives that are common to all
organizations:
- To support the firm’s day-to-day operations.
- To support management decision making.
- To support the stewardship function of management
is the set of formal procedures by
which data are collected, processed into information, and
distributed to users.
information system
is a system that
processes nonfinancial transactions not normally processed by
traditional accounting information systems
management information system (MIS)
is an event that affects or is of interest to the
organization and is processed by its information system as a
unit of work
transaction
is an economic event that affects the
assets and equities of the organization, is measured in financial
terms, and is reflected in the accounts of the firm
financial transaction
are events that do not meet the
narrow definition of a financial transaction
Nonfinancial transactions
A Framework for Information Systems
Figure 1-2
The Information Environment
Figure 1-1
Transactions Processed by the Information
Systems
Figure 1-3
The Accounting Information System
* The __________is an activity
composed of three major subsystems—the revenue cycle, the
expenditure cycle, and the conversion cycle.
transaction processing system (TPS)
The Accounting Information System
The _________________ is
a system that produces traditional financial statements, such
as income statements, balance sheets, statements of cash
flows, tax returns, and other reports required by law.
general ledger/financial reporting system (GL/FRS)
The Accounting Information System
The ____________is a system that
provides the internal financial information needed to manage a
business
management reporting system (MRS)
The Accounting Information System are
- transaction processing system (TPS)
- general ledger/financial reporting system (GL/FRS)
AN INFORMATION SYSTEMS FRAMEWORK
- The Accounting Information System
- The Management Information System
Examples of MIS Applications in Functional
Areas
Table 1-1
AIS SUBSYSTEMS
- Transaction Processing System
- General Ledger/Financial Reporting Systems
- Management Reporting System
AIS SUBSYSTEMS
- General Ledger/Financial Reporting Systems
- ___________ is a type of reporting in which the
organization has few or no choices in the information it
provides. Much of this information consists of traditional
financial statements, tax returns, and other legal documents.
Nondiscretionary reporting
AIS SUBSYSTEMS
- Management Reporting System
- _________ is a type of reporting in which the
organization can choose what information to report and how to
present it
Discretionary reporting
The ___________is a model that describes all
information systems, regardless of their technological
architecture.
general model for AIS
are users for whom the system is built
End users
include management at all levels of the
organization as well as operations personnel.
Internal users
include creditors, stockholders, potential
investors, regulatory agencies, tax authorities, suppliers, and
customers.
External users
are facts, which may or
may not be processed (edited, summarized, or refined) and
which have no direct effect on the user.
Data
causes
the user to take an action that he or she otherwise could not, or
would not, have taken
Information
A GENERAL MODEL FOR AIS
________are financial transactions that enter the
information system from either internal or external sources.
Data Sources
A GENERAL MODEL FOR AIS
_____is the first operational stage in the information
system.
Data Collection
A GENERAL MODEL FOR AIS
is a group that manages the computer
resources used to perform the day-to-day processing of
transactions.
Data Processing
______ is a physical repository for financial data.
Database
______ is a special software system that is programmed to know which
data elements each user is authorized to access
Database management
______is the process of compiling,
arranging, formatting, and presenting information to users.
Information generation
Information generation
- RELEVANCE
- TIMELINESS
- ACCURACY
- COMPLETENESS
- SUMMARIZATION
A GENERAL MODEL FOR AIS
_______is a form of output that is sent back to the system as
a source of data
Feedback
Functional Areas of a Firm
Figure 1-6
THE ACCOUNTING FUNCTION
- Reliability is the property of information that makes it useful to
users
- The Value of Information
THE ACCOUNTING FUNCTION
- Independence is the separation of the record-keeping function
of accounting from the functional areas that have custody of
physical resources.
Accounting Independence
Accounting Independence
- _______ is the separation of the record-keeping function
of accounting from the functional areas that have custody of
physical resources.
Independence
- The Value of Information
- _______is the property of information that makes it useful to
users
Reliability
The Role of Accountants in AIS
- Accountants are involved in both the design and the audit
of AIS. - Accountants play a prominent role on systems
development teams as domain experts. - The IT professionals on the team are responsible for the
physical system
ACCOUNTANTS AS SYSTEM DESIGNERS
is the production of several
alternative designs for a new system.
Conceptual system
ACCOUNTANTS AS SYSTEM DESIGNERS
is the medium and method for capturing
and presenting the information.
Physical system
ACCOUNTANTS AS SYSTEM DESIGNERS
is an efficient information system that
captures and stores data only once and makes this single
source available to all users who need it.
Data storage
ACCOUNTANTS AS SYSTEM DESIGNERS
is an expert who expresses an opinion about the
fairness of a company’s financial statements.
Auditor
ACCOUNTANTS AS SYSTEM DESIGNERS
is an independent auditor’s responsibility to
opine as to the fair presentation of a client firm’s financial
statement
Attest function
ACCOUNTANTS AS SYSTEM DESIGNERS
are tests that determine whether
database contents fairly reflect the organization’s
transactions.
- Attest Service versus Advisory Services
- _________- are tests that establish whether internal
controls are functioning properly.
Tests of controls
- Attest Service versus
________ is the review of the computer-based components
of an organization. The audit is often performed as part of a
broader financial audit.
IT auditing
ACCOUNTANTS AS SYSTEM AUDITORS
_________ is the appraisal function housed within the
organization.
Internal auditing
