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, Accounting Information Systems
1.4 How do an organization’s business processes and lines of business affect the design of its
AIS? Give several examples of how differences among organizations are reflected in their
AIS.
An organization’s AIS must reflect its business processes and its line of business. For example:
• Manufacturing companies will need a set of procedures and documents for the production
cycle; non-manufacturing companies do not.
• Government agencies need procedures to track separately all inflows and outflows from
various funds, to ensure that legal requirements about the use of specific funds are followed.
• Financial institutions do not need extensive inventory control systems.
• Passenger service companies (e.g., airlines, bus, and trains) generally receive payments in
advance of providing services. Therefore, extensive billing and accounts receivable
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procedures are not needed; instead, they must develop procedures to account for prepaid
revenue.
• Construction firms typically receive payments at regular intervals, based on the percentage of
work completed. Thus, their revenue cycles must be designed to track carefully all work
performed and the amount of work remaining to be done.
• Service companies (e.g., public accounting and law firms) do not sell physical goods and,
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therefore, do not need inventory control systems. They must develop and maintain detailed
records of the work performed for each customer to provide backup for the amounts billed.
Tracking individual employee time is especially important for these firms because labor is the
major cost component.
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1.5 Figure 1-5 shows that organizational culture and the design of an AIS influence one another.
What does this imply about the degree to which an innovative system developed by one
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company can be transferred to another company?
Since people are one of the basic components of any system, it will always be difficult to transfer
successfully a specific information systems design intact to another organization. Considering in
advance how aspects of the new organizational culture are likely to affect acceptance of the system
can increase the chances for successful transfer. Doing so may enable the organization to take steps
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to mitigate likely causes of resistance. The design of an AIS, however, itself can influence and
change an organization’s culture and philosophy. Therefore, with adequate top management
support, implementation of a new AIS can be used as a vehicle to change an organization. The
reciprocal effects of technology and organizational culture on one another, however, mean that it is
unrealistic to expect that the introduction of a new AIS will produce the same results observed in
another organization.
1-3
Copyright (c) 2021 Pearson Education, Inc.
YL
D
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ST
, AB
YL
D
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, AB
YL
D
U
ST
, Accounting Information Systems
1.4 How do an organization’s business processes and lines of business affect the design of its
AIS? Give several examples of how differences among organizations are reflected in their
AIS.
An organization’s AIS must reflect its business processes and its line of business. For example:
• Manufacturing companies will need a set of procedures and documents for the production
cycle; non-manufacturing companies do not.
• Government agencies need procedures to track separately all inflows and outflows from
various funds, to ensure that legal requirements about the use of specific funds are followed.
• Financial institutions do not need extensive inventory control systems.
• Passenger service companies (e.g., airlines, bus, and trains) generally receive payments in
advance of providing services. Therefore, extensive billing and accounts receivable
ST
procedures are not needed; instead, they must develop procedures to account for prepaid
revenue.
• Construction firms typically receive payments at regular intervals, based on the percentage of
work completed. Thus, their revenue cycles must be designed to track carefully all work
performed and the amount of work remaining to be done.
• Service companies (e.g., public accounting and law firms) do not sell physical goods and,
U
therefore, do not need inventory control systems. They must develop and maintain detailed
records of the work performed for each customer to provide backup for the amounts billed.
Tracking individual employee time is especially important for these firms because labor is the
major cost component.
D
1.5 Figure 1-5 shows that organizational culture and the design of an AIS influence one another.
What does this imply about the degree to which an innovative system developed by one
YL
company can be transferred to another company?
Since people are one of the basic components of any system, it will always be difficult to transfer
successfully a specific information systems design intact to another organization. Considering in
advance how aspects of the new organizational culture are likely to affect acceptance of the system
can increase the chances for successful transfer. Doing so may enable the organization to take steps
AB
to mitigate likely causes of resistance. The design of an AIS, however, itself can influence and
change an organization’s culture and philosophy. Therefore, with adequate top management
support, implementation of a new AIS can be used as a vehicle to change an organization. The
reciprocal effects of technology and organizational culture on one another, however, mean that it is
unrealistic to expect that the introduction of a new AIS will produce the same results observed in
another organization.
1-3
Copyright (c) 2021 Pearson Education, Inc.
