Chapter 1 Role and Purpose of Accounting Information Systems
Accounting Information Systems- (AIS) is a system of collecting related activities, documents, and technology to store, and process, financial and accounting data that will be used by decision makers.
Conceptual framework- A guide used for development of accounting principles. Could be in the future or present. Has three levels 1. Provide the information to decision makers 2. Presents two ideas on what the accounting information provides and what type nature should the data contain for the decision makers to make good decisions. 3. Highlights and provides ideas to the design of the AIS.
Well designed AIS incorporates gathering data on the financials. Accounting information is broken down into the categories of assets, liabilities, equity, revenues, gains, and losses. Transforming that that data into relevant and reliable data i.e. garbage in garbage out. AIS can also gather additional data such as geographic area, customer characteristics, transaction histories, etc. to assist in capturing/keeping future markets and finally needs to recognize and adapt to the cost benefit constraint It is all about choices and trade-offs. Not the all information gathering is cost beneficial.
The five main parts of the Accounting Information System (AIS) are
1. Input – Such as sales, invoices, or purchase orders
2. Process – By using computers, satellites, credit card machines
3. Output – Resources used to compile financial statements, internal reports and help user make decisions
4. Storage – Data that is stored locally, remotely, or on the network
5. Internal Control – Separation of duties and authority, maintaining the control over assets
AIS information sources and information literacy concepts:
Sponsored/commercial information- Mean people paid or pay for the