Lecture 1 AIS overview Flashcards
(!) What is an AIS? And what are the benefits and elements
General:
- Use tech to capture, store, process & report acc. Info
- Manage in- & external business processes: ERP, SCM, CRM
- Importance of compliance & value creation
- Often for internal use
- Used in all firms
- Manual or computerized
- Internal control for transactions
- Security measures to protect sensitive data
- Ref. Vagn Madsens: One database, many diff. purposes
Benefits:
- Increase efficiency & effectiveness
- Can increase revenue
- Can reduce costs
- Financial & non-financial info for DM
- Provide controls to protect & secure data
- Role in enabling value in primary & support activity
Elements:
- People
- Processes
- Technology
- Controls
Earlier:
- Double entry bookkeeping
Now:
- Computerized
- Still manual Excel
Examples:
- Eg. An ERP system: Backbone of internal business processes
- Eg. Track customer purchase
(!) Describe the attributes of useful info in an AIS
General:
- Important & useful info > Overwhelm
Relevant:
- Make difference in DM
- Predictive Value: Forecasting
- Feedback Value
- Confirmatory
- Corrective
- Materiality: Missing or inaccurate info impact DM since large
Faithful Representation:
- Accurately reflect firm condition
- Complete: Don’t miss transactions
- Neutral: Unbiased
- Free from error
(!) Describe data, info & knowledge
General:
- Value chain from data to info
Data:
- Raw facts
- Describe event
- Little meaning in isolation
- Eg. Sales price, working hour, date or name
Info:
- Organize data in meaningful may
- Useful to user
- Input: Data
- Risk info-overload
- Require good foundation
- Must consider users
- Strategic asset
- Ref. Data visualization
- Eg. Product margins
- Eg. Net profit
Knowledge:
- Has decision relevance
- When info acquired to DM
(!) Describe the roles of accountants in AIS
Designer:
- System Analyst
- Focus in book
Implementer:
- Database Administrator
User:
- Record journal entries
- Eg. Calc. product cost
Evaluator:
- Eg. Tax advisor or consultant
- Auditor
Manager:
- Controller or CFO
- Eg. Direct, organize & control
What is an ERP system?
- Centralized database collecting data throughout firm
- Make info available across firm in timely & useful way
(?) Describe the job of a business analyst
- Decide which info is needed
- Build IS to gather needed info
- Analyze info for helpful advice
(!) Describe the different interactions between AIS & external parties
Supplier firm:
- Supply chain management / SCM
- Eg. AIS for inventory levels
- Eg. AIS for timing inventory
Focal firm:
- Enterprise systems: Incl. Procurement, manufacturing/operations, HR & finance
Customers:
- Customer relationship management / CRM
- Eg. Tracking purchases
- Eg. Ensure satisfaction
- Eg. Product placement
Describe diff. types of info systems
- Transaction processing
- Management info systems: MIS
- Enterprise resource planning systems / ERP: Eg. SAP
- Strategic enterprise management: SEM
- Decision support systems: DSS
- Executive Info Systems: EIS
- Expert systems
(!) Relate AIS to firm value
Investments:
- Invest in IT have positive impact on stock price
Revenue:
- CRM attract new customers
- CRM improve service
COGS:
- SCM optimize inventory
SG&A:
- Efficient system = Less support costs
Interest expense:
- SCM lower inventory: Less debt
Net income:
- Improved if done right
(!) Describe the role of IT for firms
Automate:
- Replace humans: Digitize
Informate up:
- Info on business activities to TM
- Sum performance to TM: Digital dashboards
Informate down:
- Info about business activities to employees
- Empower DM
Transform:
- Redefine business processes
- Redefine relationships
Describe the change in roles of accountants & roles in general
General:
- Rapid tech change increase data availability
Before:
- Stewardship
- Financial reports
- Auditing
Today:
- Optimize processes
- Seek competitive advantage
- Max. shareholder value
- Strategic planning
- Compliance management
___________
Stewardship & Reporting:
- Regulatory compliance
- Tax returns
- Stakeholder assurance
- Investor relations
- Raise capital & loans
- Board reports
- Statutory reporting
Accounting/Finance Operations:
- Finance & accounting processes
- Financial reporting & analysis
- Provide management info
- People management
- IT for finance & acc. processes more efficient & effective
Business Management Support:
- Management info
- Planning, budgeting & forecasting
- Performance measurement
- Performance management
- Risk management: Strategic or operational incl. fraud risk
- Investment appraisal
- CM
- SCM
(?) Describe the different types of knowledge
(Describe the supply chain)
Flow of mat. info, payments & services from raw mat. suppliers through factories & warehouses to final customer
(?) Describe certifications in AIS
Certified IS Auditor (CISA):
- Perform IT Audit
Certified info technology pro. (CITP)
- Effective & efficient manage info
- Ensure data reliability, security, access & relevance
Certified Internal Auditor:
- Global accepted certification for internal auditors
