Download - Ais 510 – chapter 1
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Prepared for: Mdm Zalila Azalilah
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System A set of two or more interrelatedcomponents that interact to achieve a goal.
Composed of smaller subsystems; eachperforming specific function.
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Goal conflictdecisions or actions that
inconsistent with the goal of other
subsystems. Goal congruencea subsystem achieves its
goal
This systems concept encourage integration.
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Informationdata that have been organizedand processed to provide meaning to a user.
Information overloadwhen the limits arepassed.
The value of informationbenefit produced
minus the cost.
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Relevant Reduces uncertainty, improves
decision makers ability
Reliable Free from error or bias
Complete Does not omit important things
Timely Provided in time to be used
Understandable Ways of presenting the info.
Verifiable If the info is the same with others
Accessible Availability to be used by user
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Information can be provided to both internal
and external users.
External users; Mandatory information
Essential information
Internal usersdiscretional information
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AISa system that collects, records, stores and
processes data to produce information for decision
makers.
There are six components of an AIS (Apr.09 Q1a);
People
Procedures and instructions
Data Software
The information technology infrastructure
Internal controls and security
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Three important business functions;
Collect and store data about org. activities,
resources, and personnel. Transform data information that is useful for
making decisions so management can plan,
execute, control, and evaluate activities,
resources, and personnel.
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Provide adequate controls to safeguard the
organizations assets, including its data, to
ensure that the assets and data are availablewhen needed and the data are accurate and
reliable.
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Fundamental to Accounting
Important to your career
Compliments other systems courses AIS topics are tested on the New CPA exam
Gives impact on corporate strategy and
culture
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Improve quality and reduce costs.
Reduce wasted materials and over-working costs yetmaintain product quality.
Improve efficiency.
In terms of time management (e.g.: just-in-time)
Share knowledge. Develop new ideas, support relevant communication with
assistance with expertise to face and grab the competitiveadvantages.
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Improve decision making.
Structure (Oct10 Q1A)
1) Structured Decision (supervisor & employees) Repetitive, routine and understooddelegate lower level employees
2) Semi Structured Decision (Top, Middle, supervisor &employees) Incomplete decision making rules, need subjective assessment and
judgement to supplement formal data analysis. 3) Unstructured Decision (Top manager)
Nonrecurring and nonroutine.
Can be supported by computer-based decision aids that facilitate
gathering information from diverse sources.
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Scope
1) Operational Control Effective and efficient performance of specefic tasks.
2) Management Control Effective and efficient use of resources for accomplishing
organizational objectives.
3) Strategic Planning To establishing organizational objectives and policies for
accomplishing those objectives.
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Two basic business strategies (by Micheal
Porter) to follow:
Product Differentiation Strategy Features/services not offered by competitors which can
be charged at premium prices.
Low-Cost Strategy Striving to be most efficient producer of goods/services
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Three basic strategic position:
Variety-based strategic position Producing/providing a subset of the industrys products
or services
Needs-based strategic position To serve most or all of the needs of a particular
customers in targeted market
Access-based strategic position Serve different customers requirement based on
relevant factors
e.g.: geographic, size
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Everything thats worth
something even INFORMATION
Best example:7-Eleven success in
Japan
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LOOK AT THIS DIAGRAM CAREFULLY!
Raw
MaterialSupplies
Manufacturer
DistributorRetailerConsumer
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This is a system of providing
consumer goods
Where does value chain takes place in
the above diagram????
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Value Chain=Chain of interrelated activities
with the primary goals of increasing VALUE
towards consumers.
Support activities Help in the efficiency
and progress of the primary activities
Primary activities Activities directly
related to increase value of consumers
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Inbound
Logistics OperationsOutbound
logistics
Marketing
/sales
Primary(helped by
support activities)Services
TechnologyHuman
Resources
Firms
Infrastructure
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Please refer to October 2009 Part A Q1
a) Two ways in which a well designed accounting information system
can increase value in an organization is by
1. Improving both the effectiveness and efficiency of the supply chainsystem. With the implementation of a more systematic control over
information and also its quality via the value chain for example, a
more higher incremental in the benefits of the end products can be
provided to the customer and this satisfaction increase product value
and also the organizational value.2. With the implementation of a more better AIS within an
organization, an information can be obtained, improved and shared
to all stakeholders and also to other firms and organization. This
definitely increases both an organization reputation and value.
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Internal users are users who is directly related or involved in the
management within an organization itself. For example, the managers or
officers of a company. Reports are being used by them mainly for
managerial purposes and these reports will allow them to make the best
decision incongruence with the organizational goals. They are beingprovided with discretionary info which should not be freely used, share or
stored by other organization.
External users refers to users who is not involve in the management of the
organization however they do have interest in the organization. For
example, shareholders and governments. Reports are being used by themmainly for knowing the prospects, performance and the direction of the
organization itself in order to invest or obtain tax information. They are
being provided with both mandatory information(requirement set of
MASB) and essential/other info.
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How AIS can add value to organization (pg
34) ( January 2012)(Q1 b) & Oct08