c39it 1011 wk 1 intro and aict_1

8/8/2019 c39it 1011 Wk 1 Intro and Aict_1

1/34

Not just a load of old numbers..

1


2/34

What is Accounting?

identifying, collecting, processing, Communicating

2


3/34

Information

yWhat is information?

yWhat are its characteristics?

yWhere does it come from?

yHow is it produced?

yWhat is it used for?

3


4/34


5/34

TechnologyyA platform and underpinning for

Accounting Information & Communication

yTransforms what information can be

collected & how it can be communicated,

5


6/34

AICT

yAnnual report: text (narrative), graphs, photos

y Some have videos on their websites

y BPs annual report and accounts total 208 pages,

only 70 pages are primarily numbersy But narrative, graphs etc often based on the

numbers, derived from the underlying accountinginformation

yMany different ways of being communicated andmany different media

y Changes to large extent due to the advances intechnology

6


7/34

Course OverviewyAccounting as a process of collecting, presenting

and interpreting information

y Social and political factors which influence whatdata is collected and how it is presented

y Impact different presentation styles & media can

have on users of accounting information

y Concepts, developments, practices and use ofcomputerised information systems and other IT

applications relevant for accounting and business

7


8/34

Learning & Teaching

y Theoretical aspects lectures & reading

y Practical aspects computer-based

activities

y Case studies

8


9/34

9

Analytical SkillsPractical /Technical

Skills

Problem-Solving Syllabus Topics

What willyou learn?


10/34


11/34


12/34

My Role

Introduce

Initiate

EncourageChallenge

Signpost

12


13/34

Information

yData organised in some meaningfulway

yData can be words, images, numbers,sounds etc

y Information is a business resource

(intangible asset) th

at:yneeds to be appropriately managed

y is vital to the survival ofcontemporary businesses

13


14/34

Internal & External

Information Flows

14


15/34

Information Systems

The set of formal procedures bywhich data are collected, processed

into information, and distributed to

users.May be manual or computerised.

15


16/34

Transactions

Financial

Transactions

Non-financial

Transactions

Information

System

User

Decision

MakingInformation

16


17/34

TransactionsyAtransaction is a business event.

y Financial transactions

y economic events that affect the assets and

equities of the organizationy e.g., purchase of an airline ticket

y Non financial transactions

y all other events processed by the organizations

information systemy e.g., an airline reservation no commitment by

the customer

17


18/34

AIS compared wit

hMISAccounting Information

Systems (AIS)Management Information

Systems (MIS)

process

y financial transactions;e.g., sale of goods

y non financialtransactions that

directly affect th

eprocessing of financialtransactions; e.g.,addition of newlyapproved vendors

process

y non financialtransactions that are

not normally processed

by traditional AIS;

e.g., tracking customercomplaints

18


19/34

AIS versus MIS?

IS

AIS

GLS/FRS TPS MRS

MIS

Finance Marketing Production HRS Distribution

19


20/34

The General AIS Model

20


21/34

AIS Subsystemsy Transaction processing system (TPS)

y supports daily business operations

yGeneral Ledger/Financial ReportingSystem (GL/FRS)

y produces financial statements and reports

y Management Reporting System (MRS)

y produces special-purpose reports for internal use

21


22/34

Data SourcesyData sources are financial transactions that

enter the information system from internaland external sources.y External financial transactions are the most

common source of data for most organizations.y E.g., sale of goods and services, purchase of inventory,

receipt of cash, and disbursement of cash (including payroll).

y Internal financial transactions involve the exchange

or movement of resources with

in th

e organization.y E.g., movement of raw materials into work-in-process (WIP),

application of labor and overhead toWIP, transfer ofWIPinto finished goods inventory, and depreciation ofequipment.

22


23/34

Transforming the Data into

Information

1

Data Collection

2 Data Processing

3

Data Management

4 Information Generation

23


24/34

1. Data Collection

y Capturing transaction data

y Recording data onto forms

yValidating and editing the data

24


25/34

2. Data Processing

y Classifying

y Transcribingy Sorting

y Batching

25

Merging

Calculating Summarizing

Comparing


26/34

3. Data Managementy Storing database

y Retrieving key field

y Updating / Deleting

y Example Student Recordsy Record for each student made up of several

different bits of data attributes or fields e.g. name, address, degree code etc

y Unique identifier matriculation number

y Records for all students = file

y Database = collection of different files

26


27/34

4. Information Generation

y Compiling

yArrangingy Formatting

y Presenting

27


28/34

Characteristics of Useful Information

y Regardless of physical form ortechnology, useful information has the

following characteristics:y Relevance: serves a purpose

y Timeliness: no older than the time period of theaction it supports

y Accuracy: free from material errorsy Completeness: all information essential to a

decision or task is present

y Summarization: aggregated in accordance withthe users needs

28


29/34

Information System Objectives ina Business Context

yThe goal of an information system is

to support

yManagements stewardship function

y

Management decision-makingyThe firms day-to-day operations

29


30/34

Accountants and Info Systems

y IS User

y IS Designer

y IS auditor

30


31/34

Accountants asInformationSystem Users

Accountants should:

y be able to clearly convey their needs to the

systems professionals who design the system.

y actively participate in systems development

projects to ensure appropriate systems design.

y understand the potential power and the potential

limitations / weaknesses of the system

31


32/34

Accountants as SystemDesignersy The accounting function is responsible for the

conceptual system, wh

ile th

e computer functionis responsible for the physical system.

y The conceptual system determines the nature of

the information required, its sources, its

destination, and the accounting rules that must be

applied.

32


33/34

Accountants as System

Auditors

y External Auditors

y attest to fairness of financial statements

y assurance service: broader in scope than

traditional attestation audit

y IT Auditors

y evaluate IT, often as part of external audity Internal Auditors

y in-house IS and IT appraisal services

33


34/34

Summaryy Information vital

y Understand

y Where it comes from

y Basis / Bias of selection

y

Impact of technology on process of capturing &communicating

34

c39it 1011 wk 1 intro and aict_1

Documents