COMM Information Systems Technology and Development. Winter 2017 Section 101. An Overview of Accounting Information Systems

Transcription

1 COMM Information Systems Technology and Development Winter 2017 Section 101 An Overview of Accounting Information Systems Learning Objectives Learning Objective 1 1. Define Accounting Information Systems (AIS) and discuss how we navigate the crossroads of Accounting and IT 2. Explain how the Accounting System related to the Enterprise System 3. Discuss the role of the Accounting Professional at the crossroads of Accounting and IT 4. Discuss the three Keys to Opportunity at the crossroads of Accounting and IT Define Accounting Information Systems (AIS) and discuss how we navigate the crossroads of Accounting and IT 2017 COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 4

2 How Can Data Create Value? Meet Business Intelligence (BI) Can you imagine how the data stored in your accounting system can make millions of dollars for your business? Meet Business Intelligence. BI uses data in smarter ways. Analyzes data to glean insights for improved decisions and performance. Example: Travelocity uses BI to personalize customer service, increasing bookings and earnings by 100 percent in the first year. The Accounting System stores data that can be used in BI analytics COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 6 What is an Accounting Information System (AIS)? An Accounting Information System (AIS) is the system of records a business keeps to maintain its accounting system. This includes the purchase, sales, and other financial processes of the business. The purpose of an AIS is to accumulate data and provide decision makers (investors, creditors, and managers) with information. (Source: Wikipedia) To provide information for decision making... Investors Creditors Management External agencies (IRS, SEC and so on) Society and Community What is the Objective of the Accounting System? Should I buy more stock? Should I make a loan? Should we raise prices? Does this company comply? Is this enterprise socially responsible? 2017 COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 8

3 Information and Decisions Data, Information, Knowledge Top-Level Management Middle Management Hierarchy of Internal Users Strategic Tactical Summarization and Filtration Knowledge Information Processed data or information that conveys some individuals understanding or learning applicable to a problem or activity. Organized data that has meaning and value. Lower-Level Management Operational Transaction oriented Data Items that are the most elementary descriptions of things, events, activities, and transactions. May be internal or external COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 10 Information Systems Expert System (ES) Executive Information System (EIS) Decision Support System (DSS) Management Information System (MIS) Accounting Information System (AIS) How Do I Navigate the Crossroads of Accounting and IT? In today s business environment, the accounting professional stands at the crossroads of accounting and information technology. Having IT knowledge gives you a competitive advantage as an accounting professional. Transaction Processing System (TPS) 2017 COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 12

4 How Do I Navigate the Crossroads of Accounting and IT? Accounting System Remember AIS is SASSY: Store accounting data using people, processes, and technology. Analyze accounting data to create intelligence for decisions. Safeguard information assets stored in the accounting system using security, controls, and risk management. SYstem design to plan and build an accounting system. Three aspects to the Accounting System: Store accounting data Analyze accounting data Safeguard accounting data 2017 COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 14 Learning Objective 2 Explain how the Accounting System related to the Enterprise System How Is the Accounting System Related to the Enterprise System? Activities in an enterprise are often interconnected, such as human resources and accounting working together to create your paycheck. An Enterprise System supports people conducting business activities throughout the enterprise. If you want to add value to an enterprise, you need to understand how the Accounting System (and you) fit into the Enterprise System COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 16

5 Three Basic Functions of an Information System Integrated Enterprise System Input capturing information to store in the system Processing sorting and storing (updating) information Output summarizing information to generate documents and reports Eliminates the need to rekey the same data into multiple systems. An Integrated Enterprise System shares data across functional areas within the enterprise (HR, Accounting, Marketing, and so on). Unit COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 18 Enterprise System Business Processes Modules or subsystems of an Enterprise System can include: Accounting Supply Chain Management (SCM) Operations/Production System (OPS) Human Resource Management (HRM) Customer Relationship Management (CRM) To understand an Enterprise System, first you must understand the underlying business processes. Business processes are related activities performed by an enterprise to create value by transforming input into output. Systems that support financial and accounting activities in an organization can be called many different names. The enterprise value chain is an organizing framework for business processes. Unit COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 20

6 Value Chain Business Processes & Transaction Cycles Value Chain is a series of activities that create value. Innovation includes designing new services, products and experiences. The Accounting System spans the value chain. Business processes in the value chain are associated with related accounting transactions known as Transaction Cycles: 1. Purchasing cycle 2. Payroll cycle 3. Sales cycle COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 22 Transaction Cycles Learning Objective 3 Purchasing Cycle: consists of transactions related to purchasing items from vendors Payroll Cycle: consists of employee and payroll transactions Sales Cycle (revenue cycle) : involves exchanges or transactions between an enterprise and its customers. Discuss the role of the Accounting Professional at the crossroads of Accounting and IT To understand the accounting system for an enterprise, it is essential to understand the underlying business processes and transaction cycles COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 24

7 How to Study Accounting Information Systems? Accounting Insight No. 1 Studying accounting systems is very different from studying other areas of accounting. Understanding accounting systems involves seeing the overall system as well as focusing on details COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 26 Satellite Mapping Use Satellite Mapping approach to view Accounting Systems 2017 COMM An Overview of Accounting Information Systems 27 Copyright 2012 Pearson Education. All Rights Reserved COMM An Overview of Accounting Information Systems 28

8 Zoom in for Specific Transactions Zoom in Further 2017 COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 30 Zoom in to the Detail of a Specific Check Baseline Accounting System 2017 COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 32

9 Baseline Accounting System with Transactions Baseline Accounting System with Transaction Cycles 2017 COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 34 ABCs of Accounting Systems Accounting Insight No. 2 The dilemma facing enterprises: 1. Do we change our business processes to fit a generic baseline accounting system? 2. Do we custom build an accounting system that fits our unique business needs? Unit 3 & COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 36

10 Accounting Insight No. 3 Accounting Insight No COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 38 Three Categories of Accounting Software Accounting Insight No. 5 Database is integrated. Database is installed as a separate component COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 40

11 Database Essentials Accounting Insight No. 6 Fields: pieces of information about events, people, and objects Record: collection of related fields Table: collection of related records with a unique table name Database: collection of related tables Unit COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 42 Database Fields & Records Spreadsheets Field 2-dimensional Record Fields are shown in columns Spreadsheet as a 2-dimensional database Records are shown in rows COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 44

12 Database Tables Relational Database Relational Database: database tables are related or connected through fields common to two or more tables Primary Key: a unique identifier for each record in a database table Database Tables in 3-D 2017 COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 46 Relational Database (cont d) Database Forms, Queries and Reports Customer Table Order Table Primary Key Foreign Key Tables are related or connected using fields that are common to two or more tables. Database Forms: onscreen forms used for database input, such as onscreen checks Database Queries: used for database searches and inquiries Database Reports: used for database output either onscreen or printout tutorials 2017 COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 48

13 Accounting Insight No. 7 From Data To Intelligence Transforms data to intelligence for better decision. For example: Data: The amount of a single sale of an Apple computer would be accounting data. Information: Apple s income statement for the year showing sales by type of customer would be information. Which customers purchased what products last year? Intelligence: Financial analytics and predictive modeling that allows Apple to predict the number of customers who will purchase a new product. Which customers will purchase what products next year? Unit COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 50 Accounting Insight No. 8 Safeguarding Information To protect information assets, organizations implement security and controls to prevent fraud, unauthorized access, modification, destruction, or disclosure. Internal control is the set of policies and procedures enterprises use to safeguard assets, including information assets, and to prevent and detect errors. Units 6 & COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 52

14 Learning Objective 4 3 Keys to Opportunity Discuss the three Keys to Opportunity at the crossroads of Accounting and IT People: Who will be affected? What will they be impacted? Will training be required? Processes: How will our business processes change? Technology: What new technology will we need to purchase? How much will it cost? 2017 COMM An Overview of Accounting Information Systems COMM An Overview of Accounting Information Systems 54 System Development Life Cycle (SDLC) How the Course is Organized The SDLC organizes the activities involved in developing a new system into 6 main phases: 1. Plan 2. Analyze 3. Design 4. Build/buy 5. Install 6. Deploy Unit 7 01 An Overview of Accounting Information Systems 03 Business Processes and Transaction Processing 05 Accounting and Business Intelligence 07 Information Systems Development and Management 02 An Introduction to Database 04 Enterprise Systems Architecture 06 Information Systems Audit and Internal Controls 08 Information System Security 2017 COMM An Overview of Accounting Information Systems 55 COMM An Overview of Accounting Information Systems