Chapter 1

The
Information
System: An
Accountant’s
Perspective

James A. Hall, Accounting Information Systems, 10th Edition. © 2019

Cengage. All Rights Reserved. May not be scanned, copied or duplicated,
or posted to a publicly accessible website, in whole or in part.
Learning Objectives
• Recognize the primary information flows within the business
environment.
• Understand the difference between accounting information
systems and management information systems.
• Understand the difference between financial transactions and
nonfinancial transactions.
• Know the principal features of the general model for information
systems.
• Understand the organizational structure and functional areas of a
business.
• Be able to distinguish between external auditing, internal auditing,
and advisory services as they relate to accounting information
systems.

James A. Hall, Accounting Information Systems, 10th Edition. © 2019 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2
 The Information Environment

James A. Hall, Accounting Information Systems, 10th Edition. © 2019 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4
 A Framework for Information Systems

James A. Hall, Accounting Information Systems, 10th Edition. © 2019 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7
Examples of MIS Applications in Functional
Areas

James A. Hall, Accounting Information Systems, 10th Edition. © 2019 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10
 Components of an AIS (6)

 People using the system

 Procedures and Instructions

 For collecting, processing, and storing data

 Data

 Software

 Information Technology (IT) Infrastructure

 Computers, peripherals, networks, and so on

 Internal Control and Security

 Safeguard the system and its data

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 1-11

 General Model for Accounting Information
Systems

Data vs
Information

James A. Hall, Accounting Information Systems, 10th Edition. © 2019 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14
 What Makes Information Useful?

 . Necessary characteristics:
 Relevant
 Reliable
 Complete
 Timely
 Understandable
 Verifiable
 Accessible

(SFAC # 2 Quality of Accounting Information

http://www.fasb.org/pdf/aop_CON2.pdf)

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 1-18

 Functional
Segmentation
Functional Areas of a Firm

James A. Hall, Accounting Information Systems, 10th Edition. © 2019 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23
 The Role of Accountants in AIS
• Accountants are involved in both the design and the audit
of AIS.
• Accountants play a prominent role on systems
development teams as domain experts.
• The IT professionals on the team are responsible for the
physical system.

James A. Hall, Accounting Information Systems, 10th Edition. © 2019 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 33
ACCOUNTANTS AS SYSTEM AUDITORS
(continued)

• Internal Audits
• Internal auditing is the appraisal function housed within the
organization.
• External versus Internal Auditors
• Fraud Audits
• The Role of the Audit Committee
• Designer/Auditor Duality

James A. Hall, Accounting Information Systems, 10th Edition. © 2019 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 36