1 Information Systems for Performance Improvement [INFS2001]

Information Systems for Performance Improvement [INFS2001] Topic One: Introduction and Course Overview Sub-topics include:  Accounting Information Systems and Business Organisations  Accounting Information Systems and Application Architecture  Business Processes  Accounting and Information Technology  The Accountant and Systems Development Accounting Information Systems and Business Organisations Defining Accounting Information Systems  An Accounting Information System (AIS) is a collection of resources, such as people and equipment, designed to transform financial and other data into information o Accounting identifies, collects, processes and communicates economic information about an entity to a wide variety of people o Information is useful data of some economic worth organised such that correct decisions can be based on it o A system is a collection of resources related such that certain objectives can be achieved  AIS consists of: o Transaction processing systems (TPS), which support daily operations o Financial reporting systems (FRS), which produce financial statements and reports o Management reporting systems (MRS), which produce financial reports for management  Key issues in AIS include: technology, databases, reporting, control, business operations, event processing, management decision making, systems development, communication, accounting principles  An AIS may be designed from management information systems (MIS) as they collect, store and process information about financial transactions (eg sale of goods) and non-financial transactions that have a direct effect on financial transactions (eg addition of a new vendor) Information and Decisions  Organisations exist of decision making units which work together to pursue specific objectives  Firms accept inputs (eg raw materials, labour, time) and transform them into outputs (products and services)  Users of accounting information may be: o External (eg stockholders, investors, creditors, governments, customers)  Such parties are particularly concerned with the outputs of the system  Information is often contained in publicly available, all-purpose financial statements o Internal (eg management)  Information needs are dependent on the managers’ level in the organisation  Top level management tends to require highly summarised and filtered information with a strategic viewpoint (eg total quarterly sales by product line)  Middle management tends to require moderately summarised and filtered information with a tactical and operational viewpoint (eg weekly sales by product line)  Low level management tends to require only marginally summarised and filtered information with a transaction oriented viewpoint (eg total sales of department A)  Differences in source, scope, characteristics (etc) of information required by different levels of management can be viewed on p2  Accounting information is constrained by cost benefit structure of decision making  Accounting information may be: o Mandatory (eg statutory requirements set by governments, necessary for everyday function) o Discretionary (eg information that assists in decision making such as budgetary systems, responsibility accounting systems and specific reports for internal management) Information Systems  A computer based information system is a collection of computer hardware and software designed to transform data into useful information  Examples of compute based information systems:

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