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Definition
“An accounting information system is a collection of data and processing procedures that creates needed information for its users”
Bagranoff, Simkin and Norman (2010)
“Core Concepts of Accounting Information Systems” .11th Edition. Wiley
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Management Accountants use AIS t
– Activity Based Costing
“Core Concepts of Accounting Information Systems” .11th Edition. Wiley
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Data v Information
• Data
– Raw facts about events that have little organisation or meaning
• Mid range accounting software
– Sage
• Specialised accounting software
– SAP, Peoplesoft, Oracle
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Accounting and IT
Information Technology (IT) strongly influences the way most accountants work :
Advanced Management Accounting Lecture 8
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Lecture content
• Accounting Information Systems • Revision
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Accounting Information Systems
• Definition • Types • How Management Accountants use AIS • Problems • Implementation of a computerised AIS
• Information
– Data must be processed into useful information
Most users of financial information require processed data for decision making purposes
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Exercise
(to be introduced at the lecture)
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Implementation
A manufacturing company has decided to update its systems from a manual AIS to a fully integrated computerised AIS
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Accounting Information Systems
Problems with computerised AIS : • Information overload
– Relevant information could be lost or overlooked
• Computers can’t “sense check” everything
• How will the new system be implemented ?
Accounting Information Systems
• Types of AIS :
– Manual – Spreadsheets – Computerised accounting software
• Small business accounting software
– Eg Quick Books, Peachtree
– Access to internet – Reporting / communicating remotely – Paperless reporting
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Accounting Information Software
“The principal objective of Management Accounting is to provide relevant information to managers (ie internal users)” Bagranoff, Simkin and Norman (2010)
– Performance Measurement
• Responsibility accounting • Balanced Scorecard • Key performance indicators • Dashboards
– Budgeting
• Timeliness
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“Dashboard”
• Traditionally – had to assign overheads manually (eg using direct labour hours)
• Now – more sophisticated (using all resources directly consumed by each activity)
• What role will the Management Accountant have in the selection of a new system ?
• What considerations does the company need to make before purchasing a system
– eg negative hours worked
• Audit trails are harder to follow
– eg Kingston Communications plc
• Data organisation and storage • IT controls not always visible