INTRODUCTION

SYSTEMS, DATA AND

INFORMATION

SYSTEM
Is a set of two or more interrelated
components that interact to achieve
the organization goals.

GOAL CONFLICT
This occurs when one of the
subsystem is inconsistent with the
goals of another subsystem or the
system which it is a part of.

GOAL CONGRUENCE
It is achieved when a subsystem
achieves its goals while contributing
to the organizations overall goals

DATA
Are facts that are collected, recorder,
stored and processed by an
information system.
Usually represents observation or
measurements of activities.

INFORMATION
Is date that have been organized and
processed to provide meaning to the
users
INFORMATION OVERLOAD
occurs when the human mind cannot
absorb or process additional information

TYPES OF INFORMATION according

to users:
MANDATORY INFORMATION
EXTERNAL USERS

ESSENTIAL INFORMATION
- REQUIRED TO CONDUCT BUSINESS

DISCRETIONARY
INFORMATION
- INTERNAL USERS

Accounting
Information System

(AIS)

Accounting Information System

It is a system that
COLLECTS, RECORDS,
STORES and PROCESS
DATA to produce
INFORMATION for
DECISION MAKING

An AIS Processes Data to Produce Information for

Decision Makers

DATA
DECISION

END
USE
R

AI
S

INFORMATION

6 Components of an AIS
1.
2.
3.
4.
5.

PEOPLE
PROCEDURES AND INSTRUSTION
DATA
SOFTWARE
INFORMATION TECHNOLOGY
INFRASTRUCTURE
6. INTERNAL CONTROLS AND
SECURITY MEASURES

Characteristics of Useful Information

RELEVANT
RELIABLE
COMPLETE
TIMELY
UNDERSTANDABLE
VERIFIABLE
ACCESSIBLE

WHY STUDY
ACCOUNTING
INFORMATION
SYSTEMS?

WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?

Study of the AIS is

FUNDAMENTAL TO
ACCOUNTING

WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?
Financial Accounting Standards Board
defined Accounting as being an
information system.
Primary Objective is:
to provide information useful to
decision makers.

WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?
Accounting Education Change
Commission:
accounting curriculum should
emphasize that accounting is an
information identification, development,
measurement, and communication
process.

WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?
Three Essential Concepts:
1. The use of information in decision
making.
2. The nature, design, use, and
implementation of an AIS.
3. Financial information reporting

WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?
AIS provides the information needed.
AIS course focuses on:
How the accounting system works
How to collect data about an
organizations activities and
transactions
How to transform that data into
information
How to ensure the availability, reliability,
and accuracy of the information

WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?

AIS Skills are

important to
your Career
Success

WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?
PUBLIC ACCOUNTING:
It helps auditors evaluate the accuracy
and reliability of information by
understanding how a system is
developed, how it operates, and how
can it be properly controlled.
It helps auditors evaluate & understand
the strengths and weaknesses of AIS.

WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?
TAX:
It helps tax specialist to understand
enough about the clients AIS to be
confident that information used for tax
planning and compliance work is
complete and accurate.

WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?
CORPORATE ACCOUNTANTS:
It gives knowledge in designing internal
control systems, business process
improvements, and long term strategic
planning.

WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?
MANAGEMENT CONSULTANTS:
To entail the design, selection, and
implementation of a new AIS.
AICPA created a new credential:
Certified Information Technology
Professional
- To provide CPAs with a means of
documenting their systems expertise.

WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?

The AIS Course

Complements
Other Systems
Course

WHY STUDY ACCOUNTING

INFORMATION SYSTEMS?
AIS focuses in accountability and
control.
Data & Information are some of the
most valuable asset of an
organization.
Controls are needed to ensure:
The safety and availability of data
That the information produced from that
data is both reliable & accurate.

CITP- A NEW SPECIALTY

DESIGNATION FOR CPA

 The Certified Information Technology

Professional (CITP) credential was
established for CPAs with the unique
ability to bridge between business and
technology while meeting the strict
requirements for a CPA license, as well as
additional training and experience in IT
assurance, risk, security and privacy,
analytics and technology. In order to
obtain the credential, you must pass the
CITP Exam.

ASSOCIATIONS THAT OFFERS

CERTIFICATION
American Institute of CPAs
Institute of Management Accountants
Institute of Internal Auditors,
Information Systems Audit and Control
Association

How to be a CITP
The applicant must complete an
application that awards points to
each area of experience. An exam
process was added to this specialty
certification in the summer of 2011.

AIS TOPICS ARE TESTED ON THE

NEW CPA EXAM
Makes up about 25% of the Business
Environment & Concepts section of the
CPA exam.
INFORMATION SYSTEMS
- IT processes and
systems
- IT and internal
control

CORPORATE GOVERNANCE
-Roles of the Board of
Directors and corporate
officers
-Internal control and
Enterprise Risk Management

FINANCIAL & OPERATION

ECONOMIC CONCEPTS &
MANAGEMENT
STRATEGIC PLANNING
-Financial decision-making
-Economic measures and
-Capital budgeting
indicators
-Cost accounting
-Globalization
-Process management
-Financial risk
management

THE IMPACT OF THE AIS ON

CORPORATE STRATEGY
Organizational
Culture

Strategy

AIS

Information
Technology
1-31

Role of the AIS in

the Value Chain

The Value Chain

Primary activities
1. Inbound

logistics

receiving

and

storing

materials
2. Operations Manufacturing and repackaging
3. Outbound Logistics Distribution and shipping
4. Marketing and Sales Advertising and selling
5. Service Repair and Maintenance

Support Activities
1. Firm Infrastructure Accounting and finance
2. Human resources recruiting, training and
providing

employee

benefits

and

compensation.
3. Technology research and development
4. Purchasing procure raw materials, supplies
and machineries.

The Supply Chain

Raw materials supplier

How an AIS Can Add Value to an

Organization
1. Improving the quality and reducing the cost of

products and services.

2. Improving efficiency
3. Sharing knowledge
4. Improving the efficiency and effectiveness of its

supply chain
5. Improving the internal control structure
6. Improving decision making

Providing Information for

Decision Making

Decision making
Is a complex, multistep activity:

Identify the problem

Collect and interpret information
Evaluate ways to solve the problem
Select a solution methodology
Implement the solution

Decision making
Information can improve decision
making in several ways:
It identifies situations requiring
management action.
It provides a basis for choosing
among alternative action by reducing
uncertainty.

Decision making
Information can improve decision
making in several ways:
Information about previous decisions.
Providing accurate information in a
timely manner.

Decision Structure
Vary in terms of the degree to which
they are structured.
Structured decisions
Semistructured decisions
Unstructured decisions

Decision Structure
Structured decisions
Repetitive, routine and understood well
enough that they can be delegated
to lower level employees.

Decision Structure
Semi-structured decisions
Incomplete decision making rule and
the need for subjective assessments.

Decision Structure
Unstructured decisions
A nonrecurring and nonroutine.
Can be supported by computer-based
decision.

Decision Scope
Vary in terms of their scope.
Operational control
Management control
Strategic planning

Decision Scope
Operational control
Effective and efficient performance
of specific task.

Decision Scope
Management control
Effective and efficient use of
resources for accomplishing
organizational objectives.

Decision Scope
Strategic planning
To establishing organizational
objectives and policies for
accomplishing those objectives.

Decision making
Top management
Faces unstructured and semistructured decisions involving
strategic planning issues.

Decision making
Middle managers
Semi-structured decisions involving
management control.

Decision making
Lower level supervisors and
employees
Semi-structured or structured
decisions involving operational
control.

Strategy and Strategic

Positions
What role does the AIS play in
helping organizations adopt and
maintain a strategic position?
Data collection about each activity
Transforming data into information that
can be used by management to
coordinate those activities.

Basic Business
Strategies
Product Differentiation Strategy
adding features or services not
provided by competitors to a product.
Low-cost Strategy striving to be
most efficient producer of a product or
service.

Product Differentiation
Strategy
APPLE
Once known only for their Its not IBM
computers

Low-cost Strategy
WAL-MART
It has been successful using its strategy
of everyday low prices to attract
customers.

McDonalds and Jolibee

It has been successful with his strategy
by offering basic fast-food meals at low
prices.

Basic Strategic Positions

Variety-based strategic position
involves producing/providing a
subset of the industrys product or
services.
Needs-based strategic position
try to serve most or all of the needs
of a particular group.
Access-based strategic position
serving to a subset of customers who

Variety-based strategic
position
Do what you do best

Needs-based strategic
position
Do everything, but only for a
particular group of customers

Access-based strategic
position
Go where your customers are

Information Technology and

Business Strategy
The internet also significantly affects
both strategy and strategic
positioning.
For example, the internet dramatically
cuts costs, thereby helping companies
to implement a low-cost strategy.

Summary
Accounting Information System
refers to the system that collects,
records, stores and processes data to
provide information for decision
makers.
It consists of people, procedures and
instructions, data, software,IT
infrastructure, and internal control.

Summary
There are five Primary Activities
(IOOMS) and four Supportive
Activities (FHIP).
The Accounting Information System,
as a Supportive Activity helps the
value chain to operate efficiently.

Summary
It also helps the organization to
establish a rational decision.
According to Michael Porter, an
organization can only choose one
business strategy from the two basic
strategies that he proposes.

Summary
As to the changing needs and
technology innovation, IT
developments affects the business
strategy.

Thank you !!