ACCOUNTING INFORMATION SYSTEMS
FINAL PAPER PREPARATION KIT
COMPLETE QUESTIONS WITH VERIFIED
SOLUTIONS
●● What is an Accounting Information system
Answer: A system that captures, records processes and reports
accounting information
●● Components of an AIS
Answer: 1. People using the system
2. Procedures and instructions (For collecting, processing, and storing
data)
3. Data
4. Software
5. IT Infrastructure (Computers, peripherals, networks, and so on)
6. Internal Control and Security (Safeguard the system and its data)
●● Business functions of an AIS
Answer: > Collect and store data about organisational activities,
resources and personnel
,> Transform data into information enabling management to plan
execute, control and evaluate their activities, resources and personnel
> Provide adequate control to safeguard assets and data
●● Definition of Accounting information system
Answer: Can best be defined as the application of technology to the
capturing, verifying, storing, sorting and reporting of data relating to an
organisations activities
●● AIS and Corporate strategy
Answer: Organisation have limited resources, therefore investments to
AIS should have greatest impact on ROI.
Organisation need to understand:
> IT developments
> Business strategy
> Organisational culture
> They will effect and be effected by new AIS
●● Data v Information
Answer: Data are facts that are collected, recorded, stored and
processed:
,- Insufficient for decision making
Information is processed data used in decision making:
- Too much information however, will make it more, not less, difficult
to, make decisions. This is known as "data overload" or "information
overload".
●● Value of information
Answer: Benefits: Reduce uncertainty, improve decisions
Costs: Time and resources, produces information
●● Characteristics of useful information
Answer: > Relevant: Reduces uncertainty, improves decision-making, or
confirms or corrects prior expectations.
> Reliable: Free from error or bias; accurately represents organisation
events or activities.
> Existence: The transactions, assets, obligations and equity generated in
the system exist.
> Valid: Only those transactions and reports that are authorised by the
firm should be processed.
> Complete: Does not omit important aspects of the events or activities
it measures.
> Timely: Provided in time for decision-makers to make decisions.
, > Measurable: Transactions, assets, liabilities, and equities processed in
the system are measured accurately.
> Understandable: Presented in a useful and intelligible format.
> Verifiable: Two independent, knowledgeable people can produce the
same information.
> Accessible: Available to users when they need it and in a format they
can use
●● Input-processing-output (IPO) Model
Answer: Where information systems receive inputs, process those inputs
and use those processed inputs to generate outputs.
>Inputs: Are the starting point of a system. The primary inputs are the
data extracted from each business transaction as it occurs.
> Processing: Refers to activities that are preformed on the inputs into
the system
> Outputs: refer to what is obtained from a system, or result of what the
system does.
> Control system: is the interacting with inputs, processes and outputs, it
is a set of checks and balances that ensure the system is running as
expected
FINAL PAPER PREPARATION KIT
COMPLETE QUESTIONS WITH VERIFIED
SOLUTIONS
●● What is an Accounting Information system
Answer: A system that captures, records processes and reports
accounting information
●● Components of an AIS
Answer: 1. People using the system
2. Procedures and instructions (For collecting, processing, and storing
data)
3. Data
4. Software
5. IT Infrastructure (Computers, peripherals, networks, and so on)
6. Internal Control and Security (Safeguard the system and its data)
●● Business functions of an AIS
Answer: > Collect and store data about organisational activities,
resources and personnel
,> Transform data into information enabling management to plan
execute, control and evaluate their activities, resources and personnel
> Provide adequate control to safeguard assets and data
●● Definition of Accounting information system
Answer: Can best be defined as the application of technology to the
capturing, verifying, storing, sorting and reporting of data relating to an
organisations activities
●● AIS and Corporate strategy
Answer: Organisation have limited resources, therefore investments to
AIS should have greatest impact on ROI.
Organisation need to understand:
> IT developments
> Business strategy
> Organisational culture
> They will effect and be effected by new AIS
●● Data v Information
Answer: Data are facts that are collected, recorded, stored and
processed:
,- Insufficient for decision making
Information is processed data used in decision making:
- Too much information however, will make it more, not less, difficult
to, make decisions. This is known as "data overload" or "information
overload".
●● Value of information
Answer: Benefits: Reduce uncertainty, improve decisions
Costs: Time and resources, produces information
●● Characteristics of useful information
Answer: > Relevant: Reduces uncertainty, improves decision-making, or
confirms or corrects prior expectations.
> Reliable: Free from error or bias; accurately represents organisation
events or activities.
> Existence: The transactions, assets, obligations and equity generated in
the system exist.
> Valid: Only those transactions and reports that are authorised by the
firm should be processed.
> Complete: Does not omit important aspects of the events or activities
it measures.
> Timely: Provided in time for decision-makers to make decisions.
, > Measurable: Transactions, assets, liabilities, and equities processed in
the system are measured accurately.
> Understandable: Presented in a useful and intelligible format.
> Verifiable: Two independent, knowledgeable people can produce the
same information.
> Accessible: Available to users when they need it and in a format they
can use
●● Input-processing-output (IPO) Model
Answer: Where information systems receive inputs, process those inputs
and use those processed inputs to generate outputs.
>Inputs: Are the starting point of a system. The primary inputs are the
data extracted from each business transaction as it occurs.
> Processing: Refers to activities that are preformed on the inputs into
the system
> Outputs: refer to what is obtained from a system, or result of what the
system does.
> Control system: is the interacting with inputs, processes and outputs, it
is a set of checks and balances that ensure the system is running as
expected
