SUMMARY OF STUDY OBJECTIVES
The interrelationships of business processes and the AIS. As transactions occur, the systematic and defined steps that take place within the organization to complete the underlying tasks of the transaction are called business processes. These business processes generate accounting information that must be captured, recorded, and processed. The accounting information system comprises the processes, procedures, and systems that capture accounting data from business processes; records the accounting data in the appropriate records; processes the detailed accounting data by classifying, summarizing, and consolidating; and reports the summarized accounting data to internal and external users. Business processes, IT systems, and the accounting information system are inextricably linked.
The types of accounting information systems. Simply as a way to organize the study of accounting information systems, we classify the systems in place into three categories: manual systems, legacy systems, and modern integrated systems. Manual systems use paper documents and records, including journals and ledgers. Legacy systems employ older technology in which the organization has a considerable investment and that might be entrenched in the organization. Modern, integrated accounting software offers companies powerful, technologically advanced systems to serve as accounting information systems that integrate business processes across the organization.
Client–server computing. Client–server computing means that there are two types of computers networked together to accomplish application processing. The important characteristics of client–server computing are as follows: Both client and server computers are networked together; the system appears to users to be one integrated whole; individual parts of processing are shared between the server and client; and the client computer participates in the data processing or data manipulation in some meaningful way.
Cloud computing. Cloud computing offers a centralized approach to IT through virtual servers provided by a third party. The important characteristics of cloud computing are its scalability, reduced computer infrastructure, and ability to be accessed from many different locations. These characteristics enable a company to be more efficient and to avoid excessive costs associated with maintaining its own IT infrastructure and resources.
Accounting software market segments. The market for accounting software can be categorized into four market segments: small companies, midmarket, beginning ERP, and tier 1. There is much movement within these market segments as software development companies attempt to appeal to other segments of the accounting software market.
Input methods used in business processes. In manual systems, input is initially captured on source documents. In IT systems, many different methods are available for inputting data. Some of these methods include manual keying of source documents, bar code scanners, point of sale systems, EDI, and e-business. These input methods for IT systems reduce cost, time, and errors in data input.
The processing of accounting data. Data can be processed by batch processing or online and real-time processing. Batch processing is less complex, but due to its time lag, the accounting data are not always current. Online and real-time systems process data individually as business transactions occur, making outputs available immediately.
Outputs from the AIS related to business processes. The outputs of an accounting information system include trading partner documents, internal documents, internal reports, and external reports. These outputs may be in electronic or paper form.
Documenting processes and systems. A useful way to document processes and systems is to prepare a pictorial representation. There are many methods of documenting processes and systems, including process maps, data flow diagrams, system flowcharts, document flowcharts, and entity relationship diagrams. Process maps, data flow diagrams, and document flowcharts appear in selected chapters of this book to illustrate business processes.
Ethical considerations at the foundation of accounting information systems. Detecting fraud may be difficult in a computerized environment, especially when there are a limited number of people responsible for maintaining the computer systems. Accountants must recognize the opportunities for unethical behavior within computerized processes, and must carefully monitor those systems.