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1st Midterm
1st Midterm
A system is a set of two or more interrelated components that interact to achieve a goal.
Systems are almost always composed of smaller subsystems, each performing a specific function
supportive of the larger system.
An accounting information system (AIS) consists of:
People
Procedures
Data
Software
Information technology infrastructure
What important functions does the AIS perform in an organization?
1. It collects and stores data about activities and transactions.
2. It processes data into information that is useful for making decisions.
3. It provides adequate controls to safeguard the organization’s assets.
Ten Most Important Activities Performed By Accountants
1. Accounting systems and financial reporting
2. Long-term strategic planning
3. Managing the accounting and finance function
4. Internal Consulting
5. Short-term budgeting
6. Financial and economic analyses
7. Process improvement
8. Computer systems and operations
9. Performance evaluation
10. Customer and product profitability analyses
Organizational Strategy
Culture
AIS
Information
Technology
Value chain - linking together of all the primary and support activities in a business.
Value is added as a product passes through the chain.
2. Operations activities transform inputs into final products or services. For example,
assembly line activities convert raw materials into a finished car.
4. Marketing and sales activities help customers buy the organization’s products or
services. Advertising is an example of a marketing and sales activity.
5. Service activities provide post-sale support to customers. Examples include repair and
maintenance services.
Support activities allow the five primary activities to be performed efficiently and
effectively. They are grouped into four categories:
4. Purchasing activities procure raw materials, supplies, machineries, and the buildings
used to carry out the primary activities.
Supply chain - an extended system that includes an organization’s value chain as well as
its suppliers, distributors, and customers.