Summary:
The first section of the chapter introduced basic systems concepts and presented a framework for distinguishing between accounting information systems and management information systems. This distinction is related to the types of transactions these systems process. AIS applications process financial transactions, and MIS applications process nonfinancial transactions. The section then presented a general model for accounting information systems. The model is composed of four major tasks that exist in all AIS applications: data collection, data processing, database management, and information generation. The second section examined the relationship between organizational structure and the information system. It focused on functional segmentation as the predominant method of structuring a business and examined the functions of a typical manufacturing firm. The section presented two general methods of organizing the IT function: the centralized approach and the distributed approach. The third section reviewed the evolution of AIS models. Each new model evolved because of the shortcomings and limitations of its predecessor. As new approaches evolved, however, the predecessor or legacy systems often remained in service. Thus, at any point in time, various generations of systems coexist across different organizations and even within a single enterprise. Five AIS models were examined. The final section of the chapter examined three roles of accountant as (1) users of AIS, (2) designers of AIS, and (3) auditors of AIS. In most organizations, the accounting function is the single largest user of the AIS. The IT function is responsible for designing the physical system, and the accounting function is responsible for specifying the conceptual system. Auditing is an independent attestation performed by the auditor, who expresses an opinion about the fairness of a company’s financial statements. Both external and internal auditors conduct IT audits. The IT auditor attests to the effectiveness of a client’s IT controls to establish their degree of compliance with prescribed standards.