Introduction to Accounting Information Systems

Learning Objectives Introduction to Accounting Information Systems To appreciate the complex, dynamic environment in which accounting is practiced. To know the AIS, its relationship to the organizations business processes To know the attributes of information To understand decision making Recognize how information is used a various organizational levels Recognize how information supports management functions Appreciate the influence of strategic planning on success Understand the importance of the IS strategic plan To recognize the accountant’s role in relation to the current environment for AIS. To understand how to use this textbook effectively to learn AIS. Introduction to Accounting Information Systems

The AIS Wheel Introduces each chapter; topics are listed on spokes, hub and perimeter of wheel

Textbook Themes Enterprise systems— integrate the business process functionality and information from all of an organization’s functional areas, such as marketing and sales, cash receipts, purchasing, cash disbursements, human resources, production and logistics, and business reporting (including financial reporting). E-Business—use of networks to undertake business processes Internal control— a system of integrated elements that provide reasonable assurance that a business will reach its business process goals

Elements in the Study of AIS

Accounting System and Sub-systems

Accounting Systems and Subsystems A system is a set of interdependent elements that together accomplish specific objectives. A subsystem is the interrelated parts that have come together, or integrated, as a single system, which we have named System 1.0.

Information System Model An information system (IS) (or management information system [MIS]) is a manmade system that generally consists of an integrated set of computer-based and manual components established to collect, store, and manage data and to provide output information to users. The Figure on the next slide depicts the functional components of an information system.

Information System Model

Purpose of AIS Collect, process and report information related to the financial aspects of business events Often integrated and indistinguishable from overall information system Like the IS, the AIS may be divided into components based on the operational functions supported.

Comparison of Manual and Automated Systems

Components of Business Process 1. Management hires personnel and establishes the means for accomplishing the work of the organization.

Components of Business Process 2. Management establishes broad marketing objectives and assigns sales quotas to measure progress toward the long-run objectives. Management also designs the IS procedures for facilitating operations, such as the procedures used to pick and ship goods to the customer.

Components of Business Process 3. The IS receives the customer’s purchase order.

Components of Business Process 4. The IS acknowledges the customer’s purchase order (send order acknowledgement).

Components of Business Process 5. The IS sends a request to ship goods to warehouse. This request identifies the goods and their location in the warehouse.

Components of Business Process 6. A document (i.e., a packing slip) identifying the customer and the goods is attached to the goods.

Components of Business Process 7. Goods are shipped to customer.

Components of Business Process 8. The shipping department reports to the IS that the goods have been shipped.

Components of Business Process 9. The IS prepares an invoice and sends it to the customer.

Components of Business Process 10. The IS sends management a report comparing actual sales to previously established sales quotas.

Information Qualities

Management Decision Making 1. Intelligence: Searching the environment for conditions calling for a decision. 2. Design: Inventing, developing, and analyzing possible courses of action. 3. Choice: Selecting a course of action.

Management Decision Making

Transaction Processing Strategic Management Vertical information flows Tactical Management Operations Management Operations and Transaction Processing Horizontal information flows

Management Problem Structure and Information Requirements Horizontal flows relate to specific business events, such as one shipment, or to individual inventory items. the information moves through operational units such as sales, the warehouse, and accounting. Vertical Flows relate to the flow of information to and from strategic management through tactical management, operations management, and operations and transaction processing

Management Problem Structure and Information Requirements Higher up the pyramid, the less structured the decision Less defined External orientation More summarized information Future oriented Less frequent Less accurate Lower down the pyramid, the more structured the decision More defined Internal orientation More detailed information Historical More frequent More accurate

The strategic planning process addresses such questions as: 1. What business are we in and who are our customers? 2. What knowledge advantage do we have in our business? 3. How should our products be perceived? 4. What rate of return on assets, earnings, or cash flow are we trying to achieve? 5. What are our social responsibilities?

Strategic Planning Process 1. Assess environment for opportunities or threats.

Strategic Planning Process 2. Assess the organization’s strength’s and weaknesses and develop objectives that match the strengths and weaknesses with opportunities in environment.

Strategic Planning Process 3. Derive the factors that are central to the accomplishment of the objectives and to the survival of the organization—the critical success factors.

Strategic Planning Process 4. Develop corporate strategy: A strategy is the means (organizational structure and processes) by which an organization has chosen to achieve its objectives and critical success factors.

Strategic Planning Process 5. Identify the performance indicators that will demonstrate achievement of the organization’s strategies and critical success factors.

Accountant’s Role Designer—application of accounting principles, auditing, information systems, and systems development User—participate in design Auditor—provide audit and assurance services

Database Management Systems Chapter 3

Learning Objectives To describe and analyze major approaches used to process data related to business events To describe major business events in merchandising, service and manufacturing firms To explain complexities and limitations of using traditional data management approaches To recognize the advantages of using the database approach to data management To be able to perform basic processes involved in database design and implementation

Event-Driven Approach Raw data is captured as events occur. Minimum data to be collected/stored: Who What Where When Data can be aggregated to meet user requirements.

Overview of Order-to-Sales Process for a Merchandising or Manufacturing Firm FIGURE 3.1

Overview of Order-to-Sales Process for a Service Firm FIGURE 3.2

Managing Data Files Character Field Record File A basic unit of data (e.g., number) Field A collection of related characters (e.g., customer name) Record A collection of related data fields File A collection of related records

Data Maintenance: Add Customer Record FIGURE 3.3a

Data Maintenance: Add Customer Record (cont’d) FIGURE 3.3b

Business Event Data Processing: Enter Customer Order FIGURE 3.4

Applications-based File Approach to Data Management FIGURE 3.5a

Database Approach to Data Management FIGURE 3.5b

Record Layouts Under an Applications Approach to Data Management FIGURE 3.6

The Database Approach Decouples data from applications such that data are independent. Database is shared by applications. Data can be easily accessed by report generators. Query programs must use a database management system (DBMS) and the operating system (OS).

Database Management Systems (DBMS) A set of integrated programs designed to simplify the tasks of creating, accessing, and managing a database. DBMS functions: Defining the data. Defining the relationships among data (e.g., whether the data structure is relational or object-oriented). Interfacing with the operating system Mapping each user’s view of the data (through subschema to schema).

Database Management Systems (DBMS) (cont’d) Schema A description of the configuration of record types and data items and the relationships among them. Defines the logical structure of the database. Defines the organizational view of the data. Subschema A description of a portion of a schema. DBMS map each user’s view of the data from subschemas to the schema.

Schemas and Subschemas TI 3.1

Record Layouts as Tables FIGURE 3.7a

Record Layouts as Tables (cont’d) FIGURE 3.7b

Advantages of the Database Approach Nonredundant data Ease of maintenance Reduced storage costs Data integrity Data independence: shareability/flexibility Privacy/security

Attribute Hierarchy for the Entity CLIENT FIGURE 3.8

Developing Model Representations for Entities and Attributes FIGURE 3.9a

Developing Model Representations for Entities and Attributes (cont’d) FIGURE 3.9b

Relationships Strategy for identifying entity relationships affecting the logical design of a database Consider existing and desired information requirements of users Evaluate entity pairs to improve attribute descriptions of entities Evaluate each entity to identify recursive relationships among entities

Object-Oriented Database Model TI 3.3

Example of a Relation (EMPLOYEE) and Its Parts FIGURE 3.10

Modeling Relationship Types FIGURE 3.11

Constraints on Data Model Relationships FIGURE 3.12

An Integrated Model for the Billing and Human Resources Processes FIGURE 3.13

Schema for the Billing and Human Resources Portion of the Database FIGURE 3.14

Referential Constraints for the Relational Schema FIGURE 3.15

Linking Two Relations in a Many-to-Many Relationship FIGURE 3.16

Implementation of the Relational Schema FIGURE 3.17a

Implementation of the Relational Schema (cont’d) FIGURE 3.17b

Entity-Relationship (E-R) Diagram for Discussion Questions 3-3, 3-4, and 3-5 FIGURE 3.18

Relational Database for Discussion Question 3-4 and Problems 3-4 and 3-5 FIGURE 3.19

Relational Database for Discussion Question 3-4 and Problems 3-4 and 3-5 (cont’d) FIGURE 3.19

Jurnal, Buku Besar & Buku Pembantu Jurnal merupakan catatan akuntansi yang pertama diselenggarakan dalam proses akuntansi, maka dalam sistem akuntansi, jurnal harus dirancang sedemikian rupa sehingga tidak akan terjadi satu transaksi pun yang tidak dicatatl catatan yang dilakukan di dalamnya lengkap dengan penjelasan, tanggal dan informasi lain, agar catatan tersebut mudah diusut kembali ke dokumen sumbernya.

Jurnal ada 2, yaitu : Jurnal Umum. Jurnal ini digunakan apabila transaksi perusahaan masih sedikit. Kolom-kolom dalam jurnal umum : Kolom tanggal. Kolom keterangan. Kolom nomor bukti. Kolom nomor rekening. Kolom debit dan kredit.

Prinsip yang melandasi perancangan jurnal, yaitu : Jurnal Khusus. Jurnal yang dibuat apabila jurnal umum tidak mampu lagi menampung berbagai transaksi yang timbul. Prinsip yang melandasi perancangan jurnal, yaitu : Jumlah jurnal yang memadai. Jurnal digunakan untuk memisahkan transaksi ke dalam penggolongan pokok tertentu.

Penggunaan jurnal berkolom. Nama kolom dan jurnal harus sesuai dengan nama rekening yang bersangkutan dalam buku besar. Kolom dalam jurnal digunakan untuk mengumpulkan angka yang akan diringkas dalam rekening yang bersangkutan dalam buku besar.

Sedapat mungkin jurnal harus dirancang sedemikian rupa sehingga pekerjaan menyalin informasi dari dokumen sumbernya dibuat sangat minimum. Harus ditetapkan hubungan antara dokumen sumber tertentu dengan jurnal sehingga pertanggungjawaban kebenaran informasi dapat ditentukan.

Jenis Jurnal Jurnal penjualan. Jurnal pembelian. Jurnal penerimaan kas. Jurnal Pengeluaran kas. Jurnal umum.

Metode Pencatatan Data Ke Dalam Jurnal. Dengan pena. Dengan mesin pembukuan. Dengan arsip dokumen sumber yang berfungsi sebagai jurnal. Dengan komputer.

Langkah Perancangan Jurnal Studi terhadap karakteristik transaksi perusahaan. Pembuatan jurnal standard. Perancangan jurnal.

Contoh Jurnal. Contoh

Buku Besar & Buku Pembantu Buku besar merupakan kumpulan rekening-rekening yang digunakan untuk menyortasi dan meringkas informasi yang telah dicatat dalam jurnal. Buku pembantu adalah suatu cabang buku besar yang berisi rincian rekening teretntu yang ada dalam buku besar. Dengan demikian baik buku besar maupun buku pembantu terdiri dari rekening.

Proses sortasi dan pemindahan data ke dalam buku besar dan buku pembantu disebut dengan pembukuan (posting), diperlukan 4 tahapan : Pembuatan rekapitulasi jurnal. Penyortasian rekening yang akan diisi dengan data rekapitulasi. Pencatatan data rekapitulasi dalam rekening yang bersangkutan.

Pengembalian rekening ke dalam arsip pada urutan semula.

Formulir Rekening Buku Besar Variasi bentuk formulir rekening buku besar : Rekening dengan debit lebar (wide debit ledger). Rekening biasa (regular ledger). Rekening berkolom saldo ditengah (centre balance ledger). Rekening berkolom saldo (balance ledger).

Rekening ganda berkolom saldo (double ledger with balance ledger). Rekening dengan saldo lama dan saldo baru (old and new balance ledger).

Susunan Rekening Buku Besar Umumnya jenis dan susunan informasi yang disajikan dalam neraca dan laporan rugi laba untuk jenis usaha tertentu telah mengikuti jenis dan susunan standard yang lazim dalam menyajikan laporan keuangan dalam jenis usaha tertentu, contohnya : Kas & Bank Investasi Sementara Piutang Cadangan kerugian piutang Persediaan. Aktiva

Kode Rekening Kode adalah suatu rerangka yang menggunakan angka atau huruf atau kombinasi angka dan huruf untuk memberi tanda terhadap klasifikasi yang sebelumnya telah dibuat. Kode memudahkan identifikasi dan pembedaan elemen-elemen yang ada di dalam suatu klasifikasi.

Penggunaan kode rekening dan bukan nama rekening akan mempercepat pencarian rekening yang akan diisi dengan informasi dalam proses posting. Tujuan kode rekening : Mengidentifikasi data akuntansi secara unik. Meringkas data. Mengklasifikasi rekening atau transaksi. Menyampaikan makna tertentu.

Metode pemberian kode rekening : Kode angka atau alphabet urut (numerical or alphabetic sequence code). Kode angka blok (block numerical code). Kode angka kelompok (group numerical code). Kode angka desimal (decimal code). Kode angka urut didahului dengan huruf (numerical sequence preceded by an alphabetic reference).

Hal yang perlu dipertimbangkan dalam merancang kode rekening : Rerangka kode harus secara logis memenuhi kebutuhan pemakai dan metode pengolahan data yang digunakan. Setiap kode harus mewakili secara unik unsur yang diberi kode. Desain kode harus mudah disesuaikan dengan tuntutan perubahan.

Contoh Contoh

Buku Pembantu Buku pembantu adalah suatu kelompok rekening yang merupakan rincian rekening tertentu dalam buku besar, yang dibentuk untuk memudahkan dan mempercepat penyusunan laporan dan neraca percobaan.

Buku pembantu yang umum digunakan : Buku pembantu persediaan. Buku pembantu piutang. Buku pembantu utang. Buku pembantu harga pokok produk. Buku pembantu biaya. Buku pembantu aktiva tetap.

Posting Ke Dalam Rekening Buku Besar & Buku Pembantu Posting adalah proses sortasi dan pemindahan data ke dalam rekeking buku besar dan buku pembantu dengan menggunakan metode : Posting jurnal ke dalam rekeking buku besar dengan tulisan tangan dan posting dokumen sumber ke dalam rekeking buku pembantu dengan cara yang sama.

Posting dokumen sumber ke dalam rekeking buku pembantu yang mengjasilkan jurnla sebagai tembusan posting ke dalam rekening tersebut. Posting ke dalam buku pembantu sebagai akibat dari pengisisan dokumen sumber, yang sekaligus menghasilkan jurnal sebagai tembusan pengisian bukti tersebut. Pembukuan tanpa buku pemabntu (ledger less book keepping).

Cara Penanganan Dokumen Sumber Penangan media tunggal. Penangan media campuran : Random posting. Exhaust posting.

The Accounts Payable/ Cash Disbursement (AP/CD) Process

Learning Objectives AP/CD Know definitions and basic functions of the AP/CD process Understand relationship between the AP/CD process and its environment Achieve a reasonable level of understanding of the logical and physical characteristics of typical AP/CD process Become familiar with various technologies used to implement the AP/CD process Know core process goals and the plans used to control a typical AP/CD process AP/CD

AP/CD on the AIS Wheel In this chapter, we spotlight one business process, the accounts payable/cash disbursements (AP/CD) process and explore the processes, systems, and controls that should be in place to ensure that the accounts payable/cash disbursement process operates efficiently and effectively. Additionally, we will examine specific process control procedures that help ensure all accounts payable are paid in a timely fashion.

Process Definitions and Functions The accounts payable/cash disbursements (AP/CD) process is an interacting structure of people, equipment, methods, and controls that is designed to accomplish the following primary functions: Handle the repetitive work routines of the accounts payable department and the cashier Support the decision needs of those who manage the accounts payable department and cashier Assist in the preparation of internal and external reports

AP/CD Horizontal Perspective 1. Invoice Received from vendor

AP/CD Horizontal Perspective 2. Approved voucher sent to cashier

AP/CD Horizontal Perspective 3. Accounts payable notification sent to general ledger process

AP/CD Horizontal Perspective 4. Check sent from cashier to vendor

AP/CD Horizontal Perspective 5. Paid voucher returned to the AP department

AP/CD Horizontal Perspective 6. Notification of the cash disbursement sent from the cashier to the general ledger process

Vertical perspective-AP/CD

The AP/CD Process—Level 0 Diagram

AP/CD Process Level 1 DFD: Validate Invoice (Assumes non-voucher system—a formal voucher would have space for formal approval and account distribution)

AP/CD Process Level 1 DFD: Make Payment (Triggered by due date of invoice)

Purchase Returns and Allowances In some cases defective goods may be returned or an allowance made for non-conforming items This exception routine usually begins at the point of inspecting and counting the goods or at the point of validating vendor invoices Purchaser transmits a debit memo to the vendor requesting the account adjustment The vendor responds with a credit memo indicating the authorized account adjustment

Processing Non-Invoiced Disbursements In some cases disbursements are not invoiced, e.g., freight bills, rent, payroll, etc. The handling of non-invoiced disbursements depends on whether or not a voucher system is used A voucher system prepares a voucher for every expenditure from payroll to purchases of raw materials

Processing Non-Invoiced Disbursements

Logical Data Descriptions for the AP/CD Process Accounts payable master data. This data store is a repository of all unpaid vendor invoices The data design should consider how the data will be processed when the cash manager is deciding what payments to make For example, the manager may want to merge vendor invoices so that the total amount due each vendor can be accumulated Alternatively, the manager might want to select specific invoices for payment Cash disbursements data. The purpose of this data is to show, in chronological sequence, the details of each cash payment made. Each record in this data normally shows the date the payment is recorded, vendor identification, disbursement voucher number (if a voucher process is used), vendor invoice number and gross invoice amount, cash discount taken on each invoice, net invoice amount, check amount, and check number.

Entity-Relationship (E-R) Diagram (Partial) for the AP/CD Process

Technology Trends and Developments The AP/CD process is the primary candidate for EDI in major organizations (as it is in the OE/S, B/AR/CR, and purchasing processes as well) Several major companies have implemented EDI systems into the AP/CD process, resulting in significant cost savings An increasing trend among some of these major companies is to require all vendors to use EDI in their transactions with the company If the vendor does not implement EDI technologies, the major companies simply find a new supplier In the last few years, several alternatives to EDI have been deployed These new technologies, based, for example, on XML or IP-based EDI (Internet EDI), have not replaced EDI Services provided by the value-added networks (VANs) and the high degree of EDI standardization make EDI attractive for fully digital B2B collaboration among trading partners for years to come Many organizations are using Web-based payment systems

AP/CD Process: Systems Flowchart

AP/CD Fraud AP fraud usually involve fictitious vendors and false invoices A dishonest employee who has access to the vendor file and authorizes payment May embezzle amounts refunded by vendors Human error is still a leading cause of loss CD fraud is less sophisticated Usually involves check fraud Check fraud takes many forms from stealing and passing stolen checks to changing amounts on legitimate checks or check forgery CD fraud is becoming easier and more common with computer duplication technology

Exposure to Loss and Destruction of Resources Although the subject of fraud and embezzlement is seductively interesting, resource losses due to unintentional mistakes and inadvertent errors are as costly as, or more costly than those caused by intentional acts of malfeasance Making payments for incorrect or larger amounts Paying the wrong vendor Paying the same invoice twice

AP/CD Fraud AP fraud usually involve fictitious vendors and false invoices A dishonest employee who has access to the vendor file and authorizes payment May embezzle amounts refunded by vendors Human error is still a leading cause of loss CD fraud is less sophisticated Usually involves check fraud Check fraud takes many forms from stealing and passing stolen checks to changing amounts on legitimate checks CD fraud is becoming easier and more common with computer duplication technology

AP/CD Control Matrix