2. “Inaccurate accounting records
often contribute to business
failures. Failure to understand
accounting information can
result to poor business
decision.” -
G.V.Lising Jr.
4. Information
Non-quantitative Information
Quantitative Information
Non-accounting Information
Accounting Information
Operating Information
Financial Accounting
Management Accounting
Tax Accounting
5. The need for information
quantitative – is information
that is expressed in numbers
non quantitative – samples
are visual impressions,
conversations, television
progs etc
accounting is primarily
concerned with
QUANTITATIVE INFO
6. Accounting is one of the several types of
quantitative information
Four categories of information
operating information
financial accounting information
management accounting information
tax accounting information
7. INFORMATION
Non-quantitative information Quantitative information
Accounting Non accounting
information information
Operating Financial accounting Management Tax accounting
information accounting
8. OPERATING INFORMATION constitutes by far
the largest quantity of accounting information.
FINANCIAL ACCOUNTING INFORMATION is
intended for both managers and also for the use
of parties external to the organization, including
shareholders (and trustees) in profit
organizations), banks, and other creditors,
government agencies, investment advisers, and
the general public.
9. MANAGEMENT ACCOUNTING INFORMATION
– accounting information specifically
prepared to aid managers. This information is
used in three management functions
planning
implementation
control
10. PLANNING actions should be taken care in the future.
is the process of deciding what
An important form of planning is BUDGETING – the process of planning overall
activities of the organization for a specified period of time, usually a year. A
primary objective of budgeting is to coordinate the separate plans made for
various segments of the organization so as to ensure that these plans harmonize
with each other
Planning involves making DECISIONS
recognizing the problem
specifying and ranking the criteria to be used to determine the best solutions
identifying alternative ways of addressing the problem or opportunity
analyzing the consequences of each alternative
comparing these cosequences
11. IMPLEMENTATION – making plans does not
itself ensure that managers will implement
the plans. Each manager also must make
more detailed implementation plans to
encompassed in the budget
CONTROL – manage / perform properly
12. Accounting information is used in the control
process
as means of communication
motivation
attention getting
appraisal
13. System
Set of detailed methods, procedures, and
routines established or formulated to carry
out a specific activity, perform a duty, or solve
a problem. –BusinessDictionary.com
14. Elements of System
Inputs and outputs
Processor
Control
Environment
Feedback
Boundaries/interface
15. Planning Implementation Control
Appropriate action
Feedback
Plan revision
16. Objectives
To appreciate the complex, dynamic environment in which
accounting is practiced.
To know the AIS, its relationship to the organizations business
processes
To know the attributes of information
To recognize how information is used for different types of
decisions and at various levels in the organization
To recognize how the information system supports the
management function
To recognize the accountant’s role in relation to the current
environment for AIS
17. Key Terms
System
Subsystem
Information system (IS)
Management information system (MIS)
Accounting information system (AIS)
Operations Process
Management process
18. Key Terms
Information
Data
Understandability
Relevance
Timeliness
Predictive value
Feedback value
22. Elements in the Study of AIS
Dull, Gelinas and Wheeler, Accounting Information System 2nd Edition, Page 31
23. Sarbanes-Oxley Act of 2002
Section 404 –
Management must identify, document, and evaluate
significant internal controls
Auditors must report on management’s assertions
regarding internal controls
Section 409 –
Requires disclosure to the public on a
“rapid and current” basis of material changes in an
organization’s financial condition.
Implications for both public and private accountants
23
24. 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.
24
25. Information System Model
An information system (IS) (or management
information system [MIS]) is a manmade system
that generally 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.
25
27. 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.
27
28. Management Decision Making
1. Intelligence: Searching the environment for
conditions calling for a decision.
2. Design: Inventing, developing, and analyzing
possible courses of action.
3. Choice: Selecting a course of action.
28
30. Strategic
Management
Tactical
Management
Operations
Management
Operations and
Transaction Processing
Horizontal information flows
30
31. Accountant’s Role
Designer—application of accounting
principles, auditing, information systems, and
systems development
User—participate in design
Auditor—provide audit and assurance
services
31
32. 2012 Top Technology Priorities
http://www.aicpa.org/INTERESTAREAS/INFOR
MATIONTECHNOLOGY/RESOURCES/TOPTEC
HNOLOGYINITIATIVES/Pages/2012TTI.aspx
33. 2012 Top Technology Priorities
1. Securing the IT environment
2. Managing and retaining data
3. Managing risk and compliance
4. Ensuring privacy
5. Leveraging emerging technologies
6. Managing system implementation
7. Enabling decision support and managing
performance
8. Governing and managing IT investment/spending
9. Preventing and responding to fraud
10. Managing vendors and service providers
35. Acknowledgement and Sources:
Fundamentals of Accounting by Agamata & Berbano
Accounting: Text and Cases by Robert N. Anthony
Accounting Principles by Kieso and Weygant
Basic Accounting by G.V.Lising Jr
BDO International
Deloitte (www.iasplus.com)
Wikipedia (http://en.wikipedia.org)
BusinessDictionary.com
Thank you!