AIS

• Information must be free from material errors -
• Involves scheduling the flow of materials, labor, and machinery to efficiently meet production needs - Production Planning
• It monitors the manufacturing process at various points to ensure that the finished products meet the firm's quality standard - QUALITY CONTROL
• Is responsible for the effective functioning of the software and hardware that constitute the organization’s network - Network Administration
• Distribution is the activity of getting the product to the customer after the sale
• Competent and reliable employees are a valuable resource to a business - PERSONNEL
• Manages the financial resources of the firm through banking and treasury activities - Finance
• Accounting activities must be separate and independent of functional areas that maintain custody of physical resources - Accounting Independence
• Brings to bear IT personnel, computer hardware, application programs, and corporate data to support user information needs through transaction processing and information reporting - Data processing function
• All data processing is performed by one or more large computers housed in a common data center that serves users throughout the organization - Centralized data processing model
• In which users process their transactions locally - Distribute Data processing
• A collection of interconnected computers and communications devices that allows users to communicate, access data and applications, and share information and resources - Network
• A variant of IT sourcing is called Cloud computing
• Independent attestation regarding the fairness of the presentation of financial statements - External Audit
• An audit procedure that examines the financial statements and supporting documentation to see if they contain errors - Substansive Test
• Lacks a well-defined body of knowledge - Accounting Information System (AIS)
• Events that do not meet the narrow definition of a financial transaction - Nonfinancial transactions
• The set of formal procedures by which data are collected, stored, processed into information, and distributed to users - information system
• The first operational stage in the information system - Data collection
• Tasks range from simple to complex - Data processing
• Investigate anomalies and gather evidence of fraud that may lead to criminal conviction - Fraud Audit
• A complete set of attributes for a single occurrence within an entity class - record
• A form of output that is sent back to the system as a source of data - feedback
• A complete set of records of an identical class - file
• Established new corporate governance regulations and standards for public companies registered with the Securities and Exchange Commission - Sabarnes Oxley Act of 2002
• An economic event that affects the assets and equities of the organization, is reflected in its accounts, and is measured in monetary terms - Financial transactions
• The most elemental piece of potentially useful data in the database - Data Attribute
• It derives from the flow of resources through the firm - Functional segments
• The age of information is a critical factor in determining its usefulness - Timeliness
• Three Management Tiers:

  • Operations Management
  • Middle Management
  • Top Management
• At least 6 financial transactions:

  • Sales
  • Purchases
  • Invoices
  • Journal entries
  • Cash receipts
  • Requisitions
  • Investments
  • Issuance of paychecks
  • Cash transactions
  • Cash disbursement
• Three major subsystems of AIS:

  • Transactions processing system (TPS)
  • General ledger/financial reporting system (GL/FRS)
  • Management reporting system (MRS)
• The 3 types of audit:

  • Internal
  • External
  • Fraud
• Characteristics of useful information:

  • Relevance
  • Timeliness
  • Accuracy
  • Completeness
  • Summarization
  • Feedback
• Three Database management fundamental tasks:

  • Storage
  • Retrieval
  • Deletion
• Four information technology (IT) functions:

  • Data processing
  • Systems development and maintenance
  • Database administration
  • Network administration
• Two types of data processing model:

  • Centralized
  • Distributed
• Output Controls

  Programmed routines and other procedures to ensure that system output is not lost, misdirected, or corrupted and that privacy is not violated
• Application Controls

  Associated with specific applications, such as payroll, purchases, and cash disbursements systems
• Ethics

  Pertains to the principles of conduct that individuals use in making choices and guiding their behavior in situations that involve the concepts of right and wrong