ACC200 - Accounting

Information Systems

Topic 1- Introduction to
Accounting Information
Systems
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 Learning Objectives

1. Define accounting
2. Define and describe data & information
3. Define system – subsystems
4. Define information system
5. Define accounting information system

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 What Is Accounting?

 It is the principal way of organizing and reporting

financial information. It has been called the “language
of business.”
 an accounting system is used to identify, analyze,
measure, record, summarize, and communicate
relevant economic information to interested parties.

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 Information
 The term data refers to any  data are facts or
and all of the facts that are figures in raw
collected, stored, and form.
processed by an
 Information is
information system.
 Information is data that has
data presented
in a form that is
been organized and
useful in a
processed so that it is
meaningful. decision-
making
activities.
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 Information
Characteristics of Useful Information

Relevant/ reliable Timely

Comparable Understandable

Complete Validity

Accurate 1-5
 System-subsystem

A system is a set of
interdependent elements that
together accomplish specific
objectives
A system can be divided into its
component parts or subsystems.
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 What Is an Information
System?
 An Information system is a system that collects, records,
stores, and processes data to produce information for user.
 It can be a manual or computerized system
 Firms depend on information systems in order to survive
and stay competitive

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 Information System -Basic Stages

Data
storage

Data Data Information

input processing output

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 Capturing Inputs

 Manual keying
 Scanning through barcode technology
 Scanning through image scanners
 Magnetic ink character recognition [MICR]
 Voice recognition
 Optical mark readers

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 Processes

 Processes are the sets of activities that are

performed on the inputs into the system

Examples:
o Performing calculations
o Validity checks
o Hash checks

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 Outputs
 Outputs refer to what is obtained from a
system, or the result of what the system does
Examples:
oReceipts
oInvoices

 Outputs are normally the starting point when

designing a system

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Feedback

 The method using alerts to ensure

that the system is running as normal
and that there are no problems or
exceptional circumstances.

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 What Is An Accounting
Information System (AIS)?
 An accounting information system (AIS)
consists of:
 People
 Procedures
 Data
 Software
 Information technology infrastructure (Hardware)
 The internal controls and security measures

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What Is the function of an
AIS?
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.

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 Ten Most Important Activities
Performed By Accountants
1. Accounting systems 6. Financial and
and financial reporting economic analyses
2. Long-term strategic 7. Process improvement
planning 8. Computer systems
3. Managing the and operations
accounting and 9. Performance
finance function evaluation
4. Internal Consulting 10. Customer and product
5. Short-term budgeting profitability analyses

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End of Lecture 1