SUMMARY OF STUDY OBJECTIVES

An overview of business processes. There are many different business processes that occur in organizations. A business process is a prescribed sequence of work steps completed in order to produce a desired result for the organization. A business process is initiated by a particular kind of event, has a well-defined beginning and end, and is usually completed in a relatively short period. Many business processes have direct or indirect effects on accounting records, and these can be categorized into revenue processes, expenditure processes, conversion processes, and administrative processes.

An overview of an accounting information system. The accounting information system comprises the processes, procedures, and systems that capture accounting data from business processes; record the accounting data in the appropriate records; process the detailed accounting data by classifying, summarizing and consolidating; and report the summarized accounting data to users. As business processes occur, accounting data from those processes are entered into the accounting information system, processed, and reported to the appropriate internal and external parties. The internal reports can be used as feedback to monitor and control business processes.

The business process linkage throughout the supply chain. Not only do business processes occur within an organization, but they can also be linked to related organizations. For example, when an organization buys raw materials, it is engaging in a business process linked to the vendor's selling process. Business processes occur throughout the supply chain. The supply chain is the organizations, processes, and information flows that involve the movement of materials, funds, and related information through the full logistics process, from the acquisition of raw materials to delivery of finished products to the end user. Supply chain management controls all materials, funds, and related information in the logistics process.

The IT enablement of business processes. Processes throughout the supply chain can benefit from information technology enablement. IT enablement is the leveraging of the capabilities of IT to improve the efficiency of a process, reduce the cost of a process, or both. For example, when an organization sells goods on a website, it is using IT to improve the efficiency and reduce the costs of its sales processes.

Basic computer and IT concepts. To understand an AIS and IT enablement of processes, it is important for us to have an understanding of basic computer and IT concepts. These concepts include the data hierarchy, databases, relational databases, and networks.

Examples of IT enablement. There are many different types of IT enablement used in organizations. Some examples introduced in this chapter are e-business, electronic data interchange, point of sale systems, automated matching of purchasing documents, evaluated receipt settlement, e-payables, and enterprise resource planning systems. IT enablement is described in more detail in later chapters.

The internal control structure of organizations. To maintain a strong control environment, there are at least six control-related structures that management should develop and maintain. These are enterprise risk management (ERS), a code of ethics, a set of internal controls, a set of IT controls, a corporate governance structure, and an IT governance structure.

The importance of accounting information systems to accountants. Accountants must understand accounting information systems because they are users, participants in the design and implementation, and auditors of the AIS.

The relation of ethics to accounting information systems. The accounting information system can be misused to conduct or cover up unethical or fraudulent behavior. In order to fulfill their professional responsibilities, accountants must understand the types of behavior within an organization that are unethical.