Referencing this week’s readings and lecture, describe the six steps in the systems approach and apply the systems approach to improving the quality of an accounting information system (AIS).
An organization is a regional distributor of widgets. Widgets purchased for the organization originate from small suppliers, and payment is made only with cash. To simplify operations, orders are only taken from customers via its website, and delivery of widgets to customers are handled by a third-party shipping company. All sales are done on account on a net 30 basis and the simplicity of the operation allows the business to be operated by a husband and wife team and no other employees. The wife handles the website programming and all customer service activities (such as customer questions and complaints requiring replacement widgets), and the husband handles all other aspects of the operation (i.e., accounting functions and collections of accounts receivables).
From the information provided:
- Identify the major business processes used by the organization.
- What are the most important business processes for the organization’s strategic goals and objectives?
- Would the business processes change if the organization added a new product and became bigger?
Welcome to ACC622: Accounting Information Systems. We begin our journey with an overview of how technology and accounting correlate with one another. Accounting Information Systems (AIS) are more than just technologies used to report financial information. According to Bodnar and Hopwood (2013), “an accounting information system is a collection of resources, such as people and equipment, designed to transform financial and other data into information” (p.1). Each week you will be provided with a written weekly lecture aimed at supplementing one or more concepts from the readings. In addition to this lecture, a link to the textbook’s PowerPoint presentation will be made available to highlight the key concepts covered in the weekly readings.
The resources used in a comprehensive AIS work in correlation as a system that is focused on specific goals (Romney & Steinbart, 2015). Section 404 of the Sarbanes-Oxley Act (SOX) is concerned with how management assesses an organization’s internal controls to ensure the accuracy of reported financial data. According to Romney and Steinbart (2015), these resources utilize five basic business transaction styles: “(a) revenue cycle, (b) expenditure cycle, (c) production or conversion cycle, (d) human resources/payroll cycle and (e) financing cycle” (p. 6-7). These cycles are inter-related with the AIS because normal business transactions work together as a process for the purpose of selling goods and services. Kay and Ovlia (2014) call this relationship an “enterprise system” (p. 4). An enterprise system is people working together within an organization to achieve specific goals. Information is created through transactions (input). This information is processed so that data becomes useful and that data is finally put into a useable format (Kay & Ovlia, 2014).
The inter-relationship of these processes has become known as Enterprise Resource Planning (ERP). ERP coordinates each of the five business transaction cycles into a single effort for achieving a goal. This can be as simple as creating a paycheck in the human resources/payroll process to as complex as the supply chain process of creating a product. Accounting Information Systems ties all of these components together into a workable system.
During week 1, we will explore the basics of AIS and how AIS works in a systems approach to achieve goals. You will explore how technology works in conjunction with created data to provide accurate reporting of this data and how this data works within an organization’s system of internal controls. The Week 1 written assignment focuses on the top ten technology initiatives as listed by the Information Technology Center web site for the American Institute of Certified Public Accountants (infotech.aicpa.org). You will analyze each of the technology initiatives and how they apply to practical examples in business. You will incorporate scholarly research to the effectiveness of each of these technologies.
Please click on the link below to access a PDF version of the textbook Powerpoint Presentation for the weekly readings.
Forbes School of Business Faculty
Bodnar, G. H., & Hopwood, W. S. (2013). Accounting Information Systems (11th ed.). Upper Saddle River, NJ: Pearson.
Kay, D., & Ovila, A. (2014). Accounting Information Systems: The Crossroads of Accounting & IT (2nd ed.). Upper Saddle River, New Jersey: Pearson.
Romeny, M. B. & Steinbart, P. J. (2015). Accounting Information Systems (13th ed.). Upper Saddle River, New Jersey: Pearson.