PowerPoint Presentation Materials

Accounting Information Systems:

Basic Concepts and Current
Issues
3rd edition

Robert L. Hurt
 Chapter 1

Role and Purpose of Accounting

Information Systems

McGraw-Hill/Irwin 2013 The McGraw-Hill Companies, Inc., All Rights Reserved.

 Outline
Expected outcomes
Definition and importance of AIS
AIS and the rest of accounting
Generic AIS structure
Critical thinking
Information literacy

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 Expected outcomes
Define accounting information systems.
Discuss why AIS is an important area of study for future
accountants.
Compare and contrast AIS with other areas of study in
accounting.
Explain the structure of most AIS.
Locate and evaluate information sources on AIS.
Describe the structure and content of the remainder of
this text.

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Definition and importance of AIS
An accounting To a diverse group of:
information system is Internal decision
a set of interrelated: makers
Activities External decision
Documents makers
Technologies In all kinds of
Designed to: organizations
Collect data
Process it
Report information

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Definition and importance of AIS
Examples of activities Examples of
Selling goods and technologies
services General ledger
Collecting cash software
Examples of Relational database
documents software
Invoices Activities

Purchase orders
Organizations Documents
AIS

Technologies
Decision makers
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Definition and importance of AIS
Examples of decision Lecture break 1-1
makers Form a group of three
Managers to five students.
Stockholders As a group, give one
additional example of
Examples of
each element.
organizations
Activities
Microsoft Corp.
City of Los Angeles Organizations Documents
AIS

Technologies
Decision makers

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Definition and importance of AIS
AIS importance
Needed in all organizations
Gives a big picture view of accounting
Touches virtually every other area of
accounting
Offers opportunity for developing critical
thinking skills

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 AIS and the rest of accounting
Links between AIS and other accounting
courses
FASB Conceptual Framework (financial)
Structure of AIS (auditing)
Transaction processing (financial)
Business processes (financial, cost, tax, audit)
Information technology (financial, cost, tax,
audit)

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 AIS and the rest of accounting

FASB Conceptual
Framework of Objective
Accounting

Elements of
financial Qualitative
statements characteristics

Principles
Constraints
Assumptions

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 AIS and the rest of accounting
Lecture break 1-2

Check out the description of the conceptual

framework in Chapter 1. Which terms and

ideas do you recognize from your prior study of

accounting? Which are unfamiliar?

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 Generic AIS structure

Internal controls

Inputs Processes Outputs Storage

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 Generic AIS structure
Inputs Processes
Raw data that enters Steps in the
the AIS accounting cycle
Source documents Business processes
Checks
The things organizations
Sales invoices
do to create value for
stakeholders

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 Generic AIS structure
Outputs Storage
Information used for Master files
making decisions Customers
General purpose Inventory
financial statements Transaction files
Tax returns
Sales
Other reports
Purchases
May be paper-based Junction files
or electronic Sales / inventory
Purchases / inventory

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 Generic AIS structure
Internal control Internal control
purposes examples
Safeguard assets. Adequate
Ensure reliable documentation
financial reporting. Separation of duties
Promote operating IT passwords
efficiency. Physical controls
Encourage compliance
with management
directives.

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 Generic AIS structure
Lecture break 1-3 Form a group of three to
five students to
How are the AIS
complete this exercise.
elements demonstrated
Be ready to discuss
at your university?
your thoughts with the
class.

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 Critical thinking
Two types of Multiple right
questions in AIS
answers is not the
Deterministic
One right answer same as all answers
Example: what is the
journal entry to record a are correct.
cash sale of services?
Non-deterministic
Multiple right answers
Example: what internal
controls are needed?

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 Critical thinking
Blooms taxonomy Levels of Blooms
taxonomy
One good tool for
Knowledge
thinking about critical
Comprehension
thinking
Application
Six levels, each
Analysis
requiring more critical
Synthesis
thinking than the one
before it Evaluation

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 Critical thinking
Knowledge Analysis
Recalling memorized Breaking a big chunk
facts into smaller pieces
Comprehension Synthesis
Stating ideas in your Aggregating smaller
own words pieces into a whole
Application Evaluation
Applying ideas in a new Judging the worth of
setting ideas

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 Information literacy
One important Importance in AIS
component of critical Non-deterministic
thinking questions and issues
Ability to: Cutting edge
Recognize when problems
information is needed
Nuances of words and
Find needed ideas
information
Use it for decisions

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 Information literacy
Three broad types of Five criteria for
information evaluating information
Sponsored / Authority
commercial Accuracy
Popular / practitioner Objectivity
Scholarly Currency
Coverage
These five criteria come
from the University of
Maryland University College
(UMUC).

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 Information literacy
Authority Objectivity
Who created the Is the information
information? With what primarily advertising?
goal in mind? Currency
Accuracy When was it created?
Where did the Coverage
information originate?
Does it contain errors of Does it provide sufficient
fact? depth?

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 Information literacy
Lecture break 1-4 For the article you
Check out any article of choose:
your choosing in one of Prepare a brief
the following online summary.
journals: Determine the kind of
Journal of Forensic and
information presented.
Investigative Accounti
ng Evaluate it using the
Accounting Today UMUC criteria.
Journal of Accountancy

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 Classroom assessment
Weve considered the In a manner specified
following topics in this by your instructor:
lecture: Summarize the main
Definition & points of one or more
importance of AIS topics in your own
Relationship of AIS to words.
the rest of accounting Raise at least one
Generic AIS structure question about
something that seems
Critical thinking
unclear about one or
Information literacy more of the topics.

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