The Information System: An Accountant’s  Horizontal Flow -operations level tasks w/

Perspective highly detailed information

AIS -Accounting Information System
THE INFORMATION ENVIRONMENT
 Information in Business
Information is business resource that:
-needs to be appropriately managed
-vital to the survival of the contemporary business
organization
 System
-group of interrelated multiple components of
subsystems that serves a common purpose
-system or subsystem
 System – called a subsystem when it is
viewed as a component of a large system
 Subsystem – considered a system when it
is the focus of attention
  - Vertical Flow – distributed from
managers, summarized to managers
 3rd flow – exchange of information between the
organization and external users
 External Users
-Trading partners
-Stakeholders
INFORMATION OBJECTIVES
1. To support the firm’s day-to-day operations
2. To support management decision making
3. To support the stewardship function of
management
 Stewardship – managers’
responsibility to properly manage the
resource of the firm and to report on
their activities
INFORMATION SYSTEMS FRAMEWORK

System Decomposition – process of dividing the Information System – set of formal procedures by
system into smaller subsystem parts which data are collected, stored, processed into
information, and distributed to users
System Interdependency – distinct parts are not
self-contained 2 Broad classes of systems emerge from
- they are reliant upon the functioning of the decomposition: AIS & MIS
other parts of the system MIS (Management Information System)
- all distinct parts must be functioning or the
system will fail Transaction – event that affects or is of interest to
the organization and is processed by its information
Internal & External Flows of Information system as a unit of work
Financial Transaction – an economic event that
affects the assets and equities of the organization,
is reflected in its accounts, and is measured in
monetary terms
Nonfinancial Transaction – do not meet the
narrow definition of a financial transaction
AIS MIS
-Gen Ledger/Fin Reporting -Financial Management
System (GL/FRS) Systems
-Transaction Processing -Marketing Systems
System (TPS) -Distribution Systems
-Management Reporting - Human Resource System
Business Operations – product-oriented work System (MRS)
Three Management Levels
 Operations Management- day-to-day
activities
 Middle Management – short-term planning
to achieve organizational objectives
 Top Management – responsible for long
term planning and setting the objectives