lOMoARcPSD|2668334
, lOMoARcPSD|2668334
Accounting information systems and internal
control
Very compact summary, new 2024
Chapter 1 – Organizations and their systems
3 roles in information provision
1. The information manager:
2. The controller: A generalist whose competences concern the entire company, as he is the
one pulling the financial strings.
3. The auditor: Core task is to audit financial statements and to provide reports on
these statements based on his findings.
To realize the strategic organizational goals, strategic management will perform the following
activities:
- Formulating the strategic organizational goals (planning)
- Creating cross-functional collaboration between employees (structuring)
- Allocating task assignments and providing resources to these employees (execution)
- Testing the realization of the goals (evaluation)
- Undertaking corrective or preventive measures if goals are not or are insufficiently
realized (adjusting)
Strategic business goals can be divided into more concrete goals (operational level) that, in turn, can
be further concretized as well. Information provision is never a goal as such. Information is always
provided because there are users of that information.
Using information for 3 purposes:
1. Information for delegation and accountability: Sometimes labor has to be divided. Then
power and responsibilities are delegated between hierarchical management levels to
mitigate problems stemming from managers’ limited spans of control. However, if power
and responsibilities are delegated the need for management control arises.
2. Information for Decision-making: For example: you need information from the warehouse
to know how much to purchase. (vertical)
3. Information for Operating the Business: Making the organization function as intended.
Sharing knowledge to enable the organization to realize its goals, coordinating the
activities of two different organizational units, or communicating a decision made by
management. (horizontal)
Managerial information provision: The systematic gathering, recording and processing of data aimed
at the provision of information for management decision making, for operating the entity and
controlling it, including accountability.
Information: All the processed data that contributes to the recipient’s understanding of applicable
parts of reality.
Information and Communication Technology
Plays an important role in the recording and processing of data, and in information provision.
IT: All the electronic media used to collect, store and process data, to produce information, and to
support or enable communication.
System: An organized way of undertaking actions in order to attain certain goals. An organized way
of inputting data, processing data and providing information aimed at the attainment of
organizational goals.
, lOMoARcPSD|2668334
Accounting Information Systems (AIS): It studies the structuring and operation of planning and
control processes which are aimed at:
- Providing information for decision-making and accountability to internal and
external stakeholders that complies with specified quality criteria.
- Providing the right conditions for sound decision-making
- Ensuring that no assets illegitimately exit the organization.
2 aspects of AIS:
- Governance (bestuur) : The process of keeping an organization on track towards
legitimized goals.
- Control: All those organizational activities that are aimed at having organization
members cooperate to reach the organization’s goals.
An Integral Control Framework
Can be used to describe, analyze and solve AIS problems that may arise in contemporary
organizations.
First dimension:
Strategy formulation domain: The business is positioned toward the external world. Formulate a
strategy in such a way that competitive advantage can be accomplished.
Strategy implementation domain: Internal. The business is structured and operated in such a manner
that the intended strategy can be realized.
Quality and Quality Criteria:
Quality Spectrum of Information: The focus in on the degree to which information can be utilized
in decision-making.
Information is reliable if it’s:
- Valid: If it’s in accordance with the represented part of reality, that what is reported is not
too high
- Accurate: mathematically correct
- Complete: That what is reported is not too
low. Information is said to be relevant if it has:
- The desired level of precision:
- Provided on time
- Understandable by the user.
This together contributes to the effectiveness of information.
Quality Spectrum of the IT Infrastructure: The focus in on the degree to which information systems
meet the requirements of the data processing department.
Quality characteristics of the IT infrastructure:
- Maintainability: The degree to which information systems can be tested, renewed
and changed at reasonable cost.
- Transferability: The degree to which information systems can be transferred from
one environment to another.
- Efficiency: If the costs of the IT investments are in control.
- Availability: IT must be at the intended user’s disposal, on time and at the right place
- Confidentiality: only authorized persons are allowed to have access to specific parts of IT.
- Authenticity: The sender and receiver of a message are who they claim to be.
- Compliance (nakoming) with rules and regulations:
Accounting information system: A specialized subsystem of the management information system
whose purpose is to collect, process and report information related to financial transactions.
, lOMoARcPSD|2668334
Accounting information systems and internal
control
Very compact summary, new 2024
Chapter 1 – Organizations and their systems
3 roles in information provision
1. The information manager:
2. The controller: A generalist whose competences concern the entire company, as he is the
one pulling the financial strings.
3. The auditor: Core task is to audit financial statements and to provide reports on
these statements based on his findings.
To realize the strategic organizational goals, strategic management will perform the following
activities:
- Formulating the strategic organizational goals (planning)
- Creating cross-functional collaboration between employees (structuring)
- Allocating task assignments and providing resources to these employees (execution)
- Testing the realization of the goals (evaluation)
- Undertaking corrective or preventive measures if goals are not or are insufficiently
realized (adjusting)
Strategic business goals can be divided into more concrete goals (operational level) that, in turn, can
be further concretized as well. Information provision is never a goal as such. Information is always
provided because there are users of that information.
Using information for 3 purposes:
1. Information for delegation and accountability: Sometimes labor has to be divided. Then
power and responsibilities are delegated between hierarchical management levels to
mitigate problems stemming from managers’ limited spans of control. However, if power
and responsibilities are delegated the need for management control arises.
2. Information for Decision-making: For example: you need information from the warehouse
to know how much to purchase. (vertical)
3. Information for Operating the Business: Making the organization function as intended.
Sharing knowledge to enable the organization to realize its goals, coordinating the
activities of two different organizational units, or communicating a decision made by
management. (horizontal)
Managerial information provision: The systematic gathering, recording and processing of data aimed
at the provision of information for management decision making, for operating the entity and
controlling it, including accountability.
Information: All the processed data that contributes to the recipient’s understanding of applicable
parts of reality.
Information and Communication Technology
Plays an important role in the recording and processing of data, and in information provision.
IT: All the electronic media used to collect, store and process data, to produce information, and to
support or enable communication.
System: An organized way of undertaking actions in order to attain certain goals. An organized way
of inputting data, processing data and providing information aimed at the attainment of
organizational goals.
, lOMoARcPSD|2668334
Accounting Information Systems (AIS): It studies the structuring and operation of planning and
control processes which are aimed at:
- Providing information for decision-making and accountability to internal and
external stakeholders that complies with specified quality criteria.
- Providing the right conditions for sound decision-making
- Ensuring that no assets illegitimately exit the organization.
2 aspects of AIS:
- Governance (bestuur) : The process of keeping an organization on track towards
legitimized goals.
- Control: All those organizational activities that are aimed at having organization
members cooperate to reach the organization’s goals.
An Integral Control Framework
Can be used to describe, analyze and solve AIS problems that may arise in contemporary
organizations.
First dimension:
Strategy formulation domain: The business is positioned toward the external world. Formulate a
strategy in such a way that competitive advantage can be accomplished.
Strategy implementation domain: Internal. The business is structured and operated in such a manner
that the intended strategy can be realized.
Quality and Quality Criteria:
Quality Spectrum of Information: The focus in on the degree to which information can be utilized
in decision-making.
Information is reliable if it’s:
- Valid: If it’s in accordance with the represented part of reality, that what is reported is not
too high
- Accurate: mathematically correct
- Complete: That what is reported is not too
low. Information is said to be relevant if it has:
- The desired level of precision:
- Provided on time
- Understandable by the user.
This together contributes to the effectiveness of information.
Quality Spectrum of the IT Infrastructure: The focus in on the degree to which information systems
meet the requirements of the data processing department.
Quality characteristics of the IT infrastructure:
- Maintainability: The degree to which information systems can be tested, renewed
and changed at reasonable cost.
- Transferability: The degree to which information systems can be transferred from
one environment to another.
- Efficiency: If the costs of the IT investments are in control.
- Availability: IT must be at the intended user’s disposal, on time and at the right place
- Confidentiality: only authorized persons are allowed to have access to specific parts of IT.
- Authenticity: The sender and receiver of a message are who they claim to be.
- Compliance (nakoming) with rules and regulations:
Accounting information system: A specialized subsystem of the management information system
whose purpose is to collect, process and report information related to financial transactions.
