Ch. 2 Notes - Acct 322
Ch. 2 Notes - Acct 322 322
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This 20 page Class Notes was uploaded by ag28 on Tuesday September 29, 2015. The Class Notes belongs to 322 at Clemson University taught by Nancy Harp in Fall 2015. Since its upload, it has received 46 views. For similar materials see Accounting Information Systems in Accounting at Clemson University.
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Date Created: 09/29/15
Acct 322 Ch 1 Romney amp Steinbart AIS not just for making financial statements in to mem data intti iftiirmalji magmt can us to mom ec vally am a cicm y their i t THEN EM ll lm will by Hill imfnmmalji systnmi ihlfmnmaijitm I i pmvji a A L r t1 IJII39DGEEEE 39 its 1 Elmg mass E J AIS the intelligence the informationproviding vehicle System a set of 2 or more interrelated components that interact to achieve a goal Characteristies f Useful Informaton R levamt iTillliable rTimelgr quotHEEE ssihle Eumplete He a hle Umderstem laibl at Relevant reduces uncertainty improves decision making con rmscorrects prior expectations makes a difference Reliable free from error or bias accurately represents the organization s eventsactivities Timely as quick as needed provided to decision makers in time to make a decision Accessible available to users when they need it and in a format they can use Complete nothing important is omitted Veri able 2 independent knowledgeable people can produce the same information someone can track it Understandable presented in a useful and intelligible format Vaue of Information quotHEEL ts pmi ubaci by Info Mimus Cnsts tn Pmdupp Info Equials Ham If M Fumlatim Bene ts produced by info reduced uncertainty improved decisions Costs to produce info time resources spent to produce amp distribute information Value of information produced to ensure that the costs do not exceed the bene ts of info Components of AIS l PPM tasting the aysta m Pma ums 1E used to a oat prams 3 star fiatla Data abut till Ttmmims Pmm S W I used in Pmcasa like Infnm tin Twhnnl mmtr ls eastern These ful ll 3 business functions 1 Collect amp store data about organizational activities resources and personnel 2 Transform data into information so that management can plan execute control and evaluate activates resources and personnel 3 Provide adequate controls to safeguard the organization s assets amp data raisinssaute How AIS Add Value itill quai ity f i the f pmumta 11quot swims Ef ciency Ehariimg Knuwla g E i i f 5 a v ns f supply chain i t mal writan ee ium Mailsimg Fm example SEE H i ii c1355 ow Example AIS monitors machinery so operators are noti ed immediately when performance is below quality limits reduces waste lowers costs Example makes justintime approach possible because it noti es immediately when purchase orders come in to manufacture that amount Example CPA rm shares its best practices and communicates with other of ces employees can search the database for experts to help clients with a speci c issue Example Customers directly access inventory and sales order entry system online Example protects system from fraud and system failures Examples allows decision makers to make more accurate decisions How does AIS mprove eoision ma king I t if situatims that Enquiry action wrist alternative chin ices Prvirtla footlhia k on previous sclecisi ms Recline umcmtain r Provide 39 f t and timely info Ex Analyzes sales data to discover information to be used to improve the layout of merchandise and encourage addition sales for those products that sell well Acct 322 Ch 2 Romney amp Steinbart Transaction Processing and Enterprise Resource Planning Systems 3quot Cha pita i39 reaming e Eiei herti eerview eFTreneeetim Preeeeeing and Enterpri Reieuree Planning Syeteme 0 a Major issues Cev ere in Chapter 2 ii data cycle and lite mile in providing inf rma n tr is were i I d i tn Enterprise Reee ree Flaming l r L What are 39 scha engw ERRi l39 The ta roeessing Cycle a Sierage i la Preeeseing informalen Dita input ufpull It 39 The 4 operations performed on data to generate meaningful amp relevant information Ky Issuss fr th ista Prssssing Cyslm i 1351131 dais nss s his s39 zsrs i was slmul vs ssssss is 111 data quotse l can mfsrmstias TIEEds bsth plms anti u plms r he i sulu itE data has rquot mist 1 4 Firssssssing L 39 Ehmmm n as W g m Steps in Data Ptacasaitng Gyata L Ca aat Eiata and Enter tha ayatam ii USHER titam by a buai aaa af nity Fl data an the await mamaas amed and paple air rctiati g Fl Tranaaatian ata ia aa aatad uraugh a Paper E l39lf E daaumanta a Tiarnaraumfl dramaanta a Samaa data a tama a dawiaaa 0 Elana iri ata Praaaaairig Uyala Steps In Data PtFDCESStit g Castle 2 Malta aura aaptaratt data aaata E maritalEta 39l p a s Ear data t ia a 15E aaursaa data autaatian ti WEHaaignad daumanta wat Laied data Ellth E u Use paanumbara aauraa damnanta Malia aura carame pa ataa tallawad i p a a far dn thia a r thaaala a Eventaw atatua Step 1 system Data Input capture transaction data amp enter it into the Data must be collected about 3 facets of each business activity 0 Each activity of interest 0 The resources affected by each activity 0 The people who participate in each activity Source Documents documents used to capture transaction data at its source when the transaction takes place This data is later transferred into the computer 0 Usually retains the same name and basic format as the source document it replaced 0 Examples sales orders purchase orders employee time cards Turnaround Documents records of company data sent to an external party amp then returned to the system as an input They are in machinereadable form to facilitate their subsequent processing as input records 0 Examples utility bill sent to the customer returned with customer s payment and read by scanning device when returned Source Data Automation devices that capture transaction data in machinereadable form at the time and place of their origin 0 Examples ATMs used by banks pointof sale scanners in retail stores bar code scanners in warehouses 0 Help ensure captured data are accurate and complete along with welldesigned turnaround documents and data entry screens These improve the accuracy amp completeness by providing instructions and prompts about what data to collect using checkoff boxes or pull down menus to show available options Data input screens normally resemble source documents Users can improve control by using prenumbered source documents which simpli es verifying that all transactions have been recorded and no documents have been misplaced 0 Example check numbers invoice numbers Make sure company policies are followed Problems can be prevented by programming the system to check a customer s credit limit and payment history as well as the inventory status before con rming a sale Steps in eta receeeintg Eyclle jtepe In ta Prceseing Cycle 39 rga isze 3 store date 5 if is ready and easy access if Stare accounting brillation in Gr L and subs edgers ii rgmize aemunte in the chart of accounts ceding them 11711 meaning a Eode Teeh ques Cl Eequnmce titre cl locit in Group codes if Mnemcmic codes It Leave an m tudit Trail itw heck accuracy and tulidit inf data 39 V I l r I Ila H r l I dl 5 H FIE li quotminiquot Pi int i 4 Step 2 Data Storage organize amp store all data so it is ready and easy to access Ledgers stores cumulative accounting information 0 General Ledger summarylevel data for every asset liability equity revenue expense ex total accounts receivable o Subsidiary Ledger detailed data for any general ledger account with many subaccounts ex separate record for each customer amount owed to company in accounts receivable Often used for accounts receivable inventory xed assets accounts payable 0 Control Account the general ledger account corresponding to a subsidiary ledger Helps maintain accuracy of AIS data Sum of all subsidiary ledger account balances should equal amount in corresponding general ledger control Coding Techniques used to organize data in the ledgers o Coding systematic assignment of numbers or letters to items to classify and organize them Sequence Codes items that are numbered consecutively to account for all items Any missing items cause a gap in the numerical sequence ex pre numbered checks invoices purchase orders Block Codes blocks of numbers are reserved for speci c categories of data users can identify an item s type and model using the block code ex 100199 for basketball products 200299 for football products Group Codes 2 or more subgroups of digits used to code items often used in conjunction with block codes ex 0311 oor 3 room 11 or car S250W12 IS model 250 size W color 2012 year manufactured Mnemonic Codes letters and numbers are interspersed to identify an item derived from the description of the item usually easy to memorize ex 88101 for basketball product 101 Chart of Accounts a list of the numbers assigned to each general ledger account 0 O 0 These account numbers allow transaction data to be coded classi ed and entered into the proper accounts Facilitates the preparation of nancial statementsreports because data can be easily summed for presentation Problem data stored in summary accounts cannot be easily analyzed in more detail ournas transaction data is often stored in journals before entered into a ledger 0 General lourna used to record infrequentnonroutine transactions ex loan payments endofperiod adjusting closing entries Specialized lourna records a large number of repetitive transactions ex credit sales cash receipts purchases cash disbursements Audit trail a traceable path of a transaction through a data processing system from point of origin to nal output or vice versa 0 Used to check the accuracy and validity of ledger postings and to trace changes in the general ledger accounts from their beginning to their ending balances St s in Data Proe i ng Cycl I39 Kay Camputar aaacl Staaaga Tarma It Entity Amributea Fields Bacarda a 7 i l F I Way g Data value Maatar File Tranaaetiila File Database ComputerBased Storage Concepts 0 O Entity the item about which information is stored in a record ex employees inventory customers Attributes the properties identifying numbers and characteristics of interest of an entity that is stored in a database ex employee number pay rate name address m the portion of a data record where the data value for the particular attribute is stored represents each cell in a spreadsheet ex each row in spreadsheet customer column attribute of the customer Record a set of elds whose data values describe speci c attributes of an entity a row in a spreadsheet ex all payroll data relating to a single employee 0 Data Value the actual value stored in a eld It describes a particular attribute of an entity ex customer name eld Walmart 0 a set of logically related records ex payroll records of all employees 0 Master File a permanent le of records that stores cumulative data about an organization As transactions take place individual records within a master le are updated to keep them current They exist across scal periods like a ledger 0 Transaction File a le that contains the individual business transaction that occur during a speci c scal period Conceptually similar to a journal in a manual AIS Not permanent 0 Database a set of interrelated centrally controlled data les that are stored with as little data redundancy as possible It consolidates records previously stored in separate les into a common pool and serves as variety of uses and data processing applications i ng Cye l Steps in Data Pros quot lists Preeessing Steps CRUD ll new reeesds end esjs ng seeertls E 3 existing I39ECEEEFEIE ni 4 Vl gelete reminds er sts Step 3 Data Processing keeps database current 4 data processing activities CRUD 0 Creating new data records ex adding a newly hired employee to payroll database 0 Reading retrieving or viewing existing data 0 Updating previously stored data 0 Deleting data ex purging a vendor master le of all vendors that the company no longer does business with Steps i n Data Proo I U ptiions For how to Dipclatter 39 Batch Processing Emma HeaLTime P39roeesaing I Un ne Good illustrauiom of these 3 options on pix u Figure 25 Options for Updating 0 Batch Processing done periodically daily but only processed monthly Pros cheaper more ef cient Cons data is current and accurate only immediately after processing Used only for applications payroll that do not need frequent updating and are processed at xed penods Ex SUA project transactions happened everyday but only posted at the end of the month Ex invoices for a product come in daily and you make a batch of all product invoices on desk At the end of the day you enter all invoices into computer At the end of the week you process them all 0 Online RealTime Processing used by most companies Updates each transaction as it occurs and posts immediately No waiting Pros ensures that stored data is always current increasing its decisionmaking usefulness More accurate because data input errors can be corrected in realtime or refused Provides signi cant competitive advantages Cons more expensive Ex FedEx can track exact location of each package and estimate its arrival time 0 Online Batch Processing combination of the two Transaction data are entered and edited as they occur and stored for later processing You enter into computer immediately Computer waits to processpost until month end Ex Shoe Carnival enters sale into system immediately but doesn t post until 3am Stps in Data rooessing Cyo i39 oftor quotreooooii iw information ourlat P E I 3ft op vs Hard op A 39 lr 39 3 Forms lofjllofrmotion Dutput Documonto Reports oor Rospooso Step 4 Information Output nal step in data processing cycle Soft Copy when displayed on a monitor Hard Copy when printed on paper 3 Forms of Information Output 0 Documents records of transactions or other company data EX checks invoices transmitted to external parties Ex receiving reports purchase orders used internally 0 Reports used by employees to control operational activities and by managers to make decisions and to formulate business strategies Used by investorscreditors to understand the company s business activities Need for reports should be periodically assessed 0 Query a request for the database to provide the information needed to deal with a problem or answer a question The information is retrieved displayed or printed or analyzed as requested Used to provide information needed to answer questions quickly Onetime queries are developed by users Ex Walmart allows suppliers to access databases to help them better serve Walmart s needs and gauge how well a product is selling to maximize sales by stocking and promoting items that sell well Enterpris Systems 39v S D U r0 annhg ERP l Integrates ergenieetiec e infermatiien intes ece metal 15 I ERP Mercll clee 3 Financial i lIE 32 P y l39 ll l Driller in cash revenue cycle Purchase tc page disbursement cycle 391quot Manufacturing 3 iject management l Cuetcmer relebicnSlt P management l System cls a ERP Systems created to overcome the issues of multiple systems redundant differing results integration Integrate all aspects of a company s operations with a traditional AIS Used by most large and midsized companies to coordinate and manage their data Collects processes and stores data and provides the information managers and external parties need to assess the company Properly con gured ERP uses centralized database to share information across business processes Provides management with easy access to uptodate information about all these activities to plan and evaluate ERP systems are modular companies can purchase the individual modules that meet their speci c needs Facilitates information ow among the company s various business function and manages communications with outside stakeholders ERP Advantages I lintegratien ef ergmu rwi eetie e Ein wanneiel inf rmetien I Beta is lenee I Greater gemth visi ity i ereesed I Better eeeese eentrels I reeedures 391 euetemer eerviee I Mere ER39 Disadvantage 139 Cast 1 ta implama t I Eha aa ta my be diam 39ve a anja amesa PTDEESEES can i Camlex 139 Reaistan e 1 ha ga