Lecture 1
AIS:
Components
o People
Use the system
o Procedures
Collect, record, store, and process data
o Data
Facts of business activities
o Software
Process data
o IT infrastructure
Business functions
o Collect and store data
o Transform data into information
o Provide controls to safeguard assets
Improves
o Quality
o Reducing costs
o Efficiency
o Effectiveness
o Knowledge sharing
o Decision making
Data processing cycle:
Data input
o Triggered by business activity
o Source documents (now automated)
o Input controls
Data storage
o Collect information about an entity
o Attributes stored in fields
o All fields with data of one entity form record
o Related records form a file
o Interrelated, centrally coordinated files form a database
Data processing
o Creating
o Reading
o Updating
Batch
Online / Real-time
o Deleting
Information output
o Documents
o Reports
o Queries
Enterprise Resource Planning (ERP)
Connects the different business cycles (integrated cross-functional system)
Centralized database (sharing 1 database)
1
, Before versus After ERP
● Stand alone system Integrated system
● Non integrated data Integrated data
● Lack of coordination between Supports coordination between
business cycles business cycles
● Designed to individual users Standardized solutions
● Individual system maintenance Uniform maintenance
● Separate/different interfaces Common interfaces
Internal control
Process effected by board of directors/management/other personnel to provide reasonable
assurance regarding the achievement of objectives relating to
operations/reporting/compliance/safeguarding.
Control framework
Control environment
Control activities
Risk assessment
Monitoring
Information & communication
Segregation of accounting duties
Authorization
o Decision making
Recording
o Documentation
Custody
o Handling cash
Business cycles
Revenue
o Finished goods – Funds
Expenditure
o Funds – Raw materials
Production
o Raw materials & Labor – Finished goods
Human resources
o Funds – Labor
Financing
o Funds (Shares / Debt)
General ledger
o Documentation of all cycles
2
AIS:
Components
o People
Use the system
o Procedures
Collect, record, store, and process data
o Data
Facts of business activities
o Software
Process data
o IT infrastructure
Business functions
o Collect and store data
o Transform data into information
o Provide controls to safeguard assets
Improves
o Quality
o Reducing costs
o Efficiency
o Effectiveness
o Knowledge sharing
o Decision making
Data processing cycle:
Data input
o Triggered by business activity
o Source documents (now automated)
o Input controls
Data storage
o Collect information about an entity
o Attributes stored in fields
o All fields with data of one entity form record
o Related records form a file
o Interrelated, centrally coordinated files form a database
Data processing
o Creating
o Reading
o Updating
Batch
Online / Real-time
o Deleting
Information output
o Documents
o Reports
o Queries
Enterprise Resource Planning (ERP)
Connects the different business cycles (integrated cross-functional system)
Centralized database (sharing 1 database)
1
, Before versus After ERP
● Stand alone system Integrated system
● Non integrated data Integrated data
● Lack of coordination between Supports coordination between
business cycles business cycles
● Designed to individual users Standardized solutions
● Individual system maintenance Uniform maintenance
● Separate/different interfaces Common interfaces
Internal control
Process effected by board of directors/management/other personnel to provide reasonable
assurance regarding the achievement of objectives relating to
operations/reporting/compliance/safeguarding.
Control framework
Control environment
Control activities
Risk assessment
Monitoring
Information & communication
Segregation of accounting duties
Authorization
o Decision making
Recording
o Documentation
Custody
o Handling cash
Business cycles
Revenue
o Finished goods – Funds
Expenditure
o Funds – Raw materials
Production
o Raw materials & Labor – Finished goods
Human resources
o Funds – Labor
Financing
o Funds (Shares / Debt)
General ledger
o Documentation of all cycles
2
