Introduction to Accounting Information System Environment

Why Study AIS?

It’s good for your career!

Your only applications class

Every organization has one

What to study?

AIS design/selection/implementation

Controls, controls, contols [Sarbanes-Oxley Act (SOX), Section 404 = $$$]

Documentation

Relationship of IS and AIS

Overlapping

AIS is fully within IS

IS is fully within AIS

IS and AIS are within something else? (Maybe IT?)

Other IS's

Financial information system

Marketing information system

Production information system

Personnel information system

Special IS's

Decision support systems

Executive information systems

. . . . . .

AIS = Various and Diverse Reporting Systems

Financial accounting (GAAP)

Management accounting

Different rules for different management levels.

Operational vs. tactical vs. strategic

More cash-flow oriented

Tax accounting rules!!!

Different internal country rules

Different trans-border rules (depends on which pairs of countries)

State tax rules

Local tax rules

Cash flow accounting

Computerized AIS Applications

Manual vs. Computerized AIS

The BIG difference = Multiple transcription vs. Single transcription

Manual = Multiple Transcription

Input = journal

Re-recorded = ledger

Re-recorded = trial balance

Re-recorded = financial statements

Computerized = Single Transcription

Input = directly into database

Output = journals, ledgers, financial statements

AIS Applications

Central application

General ledger

Core applications

Accounts payable

Accounts receivable

Payroll

Related applications

Inventory management

Purchase order application

Cost accounting

Front end applications

Order entry

Material requirements planning (MRP)

Interfaces

Word processing

Spreadsheets