ACC 3520 Class #2

ACC 3520Class #2

Ch 1 – Introduction to AIS

ACC 3520 - AIS 2

• Syllabus questions?

• What is an AIS? • Business Processes, Internal

Controls, and Enterprise Systems

Day 2 Agenda Ch 1 Introduction

Big Picture of AIS• Understanding IS (ch 1 – 3)

– AIS / Enterprise Systems / E-business• Organizing & Managing Info (ch 4 – 6)

– DFD / Flowcharts / DBMS (Normalization, REA, relational DB, SQL)

• Enterprise Risk Mgmt (ch 7 – 9)– ERM / COSO / COBIT / Controls: Pervasive,

General, Application / Control Matrix

• Business Processes (ch 10 – 15)

ACC 3520 - AIS 3

ACC 3520 - AIS 4

Textbook Themes• Enterprise systems— integrate the

business process functionality and information from all of an organization’s functional areas, such as marketing and sales, cash receipts, purchasing, cash disbursements, human resources, production and logistics, and business reporting (including financial reporting).

• E-Business—use of networks to undertake business processes

• Internal control— a system of integrated elements that provide reasonable assurance that a business will reach its business process goals

5

• Overview– 1500’s Italy– Entrepreneur– Sail to China for silk– Sell goods

Entrepreneur Script - the Merchant of Venice

6

Entrepreneur Script – the big picture!

I get some money

I engage in value-added

exchanges

I pay back money and

live off of profit

I sell stuffI make stuffI purchase

R.M.

F.GR.M

Business Entrepreneur Script

Cash

Cash

EconomicEvent

Inside Agent

EconomicResources

EconomicEvent

EconomicResources

Inside Agent

Outside Agent

- +

Outside Agent

Labor

Give Take

Source: McCarthy & Geerts 1994

7

Entrepreneur Script, cont.1. Purchase boat2. Hire deck hand3. Sail to China4. Purchase silk5. Sail back to Italy6. Pay deck hand7. Sell silk

8

Entrepreneur Script, cont.Get Cash

Give Cash

Get Ship

Give Cash

GetEmployeeService

Give Cash

Get Silk

Give Cash

Get Cash

Give Silk

9

Elements in the Study of AIS

10

Accounting Systems and Subsystems

• A system is a set of interdependent elements that together accomplish specific objectives.

• A subsystem is the interrelated parts that have come together, or integrated, as a single system, which we have named System 1.0.

11

Information System Model

• An information system (IS) or management information system (MIS) is a manmade system that consists of an integrated set of computer-based and manual components established to collect, store, and manage data and to provide output information to users.

• The figure on the next slide depicts the functional components of an information system.

12

Information System Model

13

Purpose of AIS• Collect, process and report

information related to the financial aspects of business events

• Often integrated and indistinguishable from overall information system

• Like the IS, the AIS may be divided into components based on the operational functions supported.

14

Comparison of Manual and Automated Systems

15A Business Process

16

Information Qualities

17

Accountant’s Role• Designer — application of

accounting principles, auditing, information systems, and systems development.

• User — participate in design.• Auditor — provide audit and

assurance services.

18

Learning Objectives• Appreciate the complex, dynamic environment

in which accounting is practiced.• Know the relationship between the AIS and the

organization’s business processes.• Know the attributes of information.• Recognize how information is used for different

types of decisions and at various levels in the organization.

• Recognize how the information system supports the management function.

• Recognize the accountant’s role in relation to the current environment for the AIS.

• Understand how to use this textbook effectively to learn AIS.

Enterprise Risk Management

& Internal Controls

Enterprise Information Systems

Business Processes

Vendors

Customers

ACC 3520 - AIS 20

Next?• Chapter 2 – Enterprise systems