Chapter 7 - Accounting information systems. In this chapter, the learning objectives are: Identify the principles and components of accounting information systems, explain the goals and uses of special journals, describe the use of controlling accounts and subsidiary ledgers. | Accounting Information Systems 7 Learning Objectives Explain the basic concepts of an accounting information system. Describe the nature and purpose of a subsidiary ledger. Record transactions in special journals. 3 2 1 Accounting information system (AIS) collects and processes transaction data and communicates financial information to decision makers. Includes: All steps in the accounting cycle. Documents that provide evidence of transactions. Manual or computerized accounting system. LEARNING OBJECTIVE Explain the basic concepts of an accounting information system. 1 LO 1 Cost Effectiveness - Benefits must outweigh the costs. Flexibility - The system should be sufficiently flexible to meet the resulting changes in the demands made upon it. Useful Output Illustration 7-1 Principles of an efficient and effective accounting information system. Basic Concepts of AIS LO 1 Software programs (functions include sales, purchases, receivables, payables, cash receipts and disbursements, and payroll). Generate financial statements. Advantages: Typically enter data only once. Many human errors are eliminated. More timely information. Computerized Accounting Systems LO 1 CHOOSING A SOFTWARE PACKAGE ENTRY-LEVEL SOFTWARE Easy data access and report preparation Audit trail Internal control Customization Network Compatibility ENTERPRISE RESOURCE PLANNING SYSTEMS Computerized Accounting Systems LO 1 Curbing Fraudulent Activity with Software The Sarbanes-Oxley Act (SOX) requires that companies demonstrate that they have adequate controls in place to detect significant fraudulent behavior by employees. The SOX requirements have created a huge market for software that can monitor and trace every recorded transaction and adjusting entry. This enables companies to pinpoint who used the accounting system and when they used it. These systems also require “electronic signatures” by employees for all significant transactions. Such signatures verify that employees have followed all required | Accounting Information Systems 7 Learning Objectives Explain the basic concepts of an accounting information system. Describe the nature and purpose of a subsidiary ledger. Record transactions in special journals. 3 2 1 Accounting information system (AIS) collects and processes transaction data and communicates financial information to decision makers. Includes: All steps in the accounting cycle. Documents that provide evidence of transactions. Manual or computerized accounting system. LEARNING OBJECTIVE Explain the basic concepts of an accounting information system. 1 LO 1 Cost Effectiveness - Benefits must outweigh the costs. Flexibility - The system should be sufficiently flexible to meet the resulting changes in the demands made upon it. Useful Output Illustration 7-1 Principles of an efficient and effective accounting information system. Basic Concepts of AIS LO 1 Software programs (functions include sales, purchases, receivables, payables, cash receipts and disbursements, and .
