Literature Accounting Process Management
Chapter 1
Information is a strategic asset if the firm:
1. Knows what information it needs
2. Develops systems to collect, store, and process that information
3. Uses that information to make critical decisions to affect performance and profitability
Accounting Information System (AIS) = system that records, processes, summarizes,
reports, and communicates the results of business transactions to provide financial and
nonfinancial information to facilitate decision making
Attributes of useful information
1. Relevance
a. Confirmatory, or feedback value: corrects or confirms what had been predicted in
the past
b. Predictive value: helps with forecasting the future
c. Materiality: is above a threshold where missing or inaccurate information would
impact decisions
2. Faithful representation
a. Complete: includes all relevant transactions
b. Neutrality: not biased one way or the other
c. Free from error: contains no mistakes or inaccuracies
Difference between data and information
• Data = raw facts that describe the characteristics of an event, have no meaning in
isolation
• Information = data organized in a meaningful way to be useful to the user
Difference between discretionary and mandatory information
• Discretionary = not obligated to provide this, management decides if it wants to collect
data for this information based on costs, generally produced for internal information
purposes
• Mandatory = obligated to provide this, usually produced at the lowest possible cost
An AIS can influence multiple types of management:
• Enterprise Resource Planning System (ERP) = centralized database that collects data
from throughout the firm
• Supply Chain Management = management of chain of interaction with suppliers
• Customer relationship management = management of interaction with customers
• Firm profitability: lowering inventory, attract new customers, lower cost, better serve
customers
• Stock price
o Automate: replace human labor in automating business processes
o Informate-up: provide information to senior management
o Informate-down: provide information to employees
o Transform: fundamentally redefine business processes and relationships
,Chapter 2
IMA Competency Framework: 6 areas of skills for accountants
1. Strategic management: lead strategic planning process, guide decision making, manage
organizational risks, and monitor performance
2. Reporting and control: measure and report organizational performance in compliance
with appropriate standards
3. Technology and analytics: manage technology and analyse data to enhance
organizational success
4. Business acumen and operations: contribute as a cross functional business partner and
contribute to all areas of organizational operations
5. Leadership: facilitate collaboration and inspire others to achieve organizational goals
6. Professional ethics and values: demonstrate commitment to professional values, ethical
behaviour, and legal compliance critical to a sustainable business model
CGMA Competency Framework: 4 areas of skills for accountants
1. Technical skills: to contribute to developing an organization’s strategic goals and assure
that their performance contributes to strategic success
2. Business skills: understand the organization’s environment and its overall strategic
direction
3. People skills: to manage effectively, communicate well, and collaborate with a diverse
set of stakeholders
4. Leadership skills: to drive performance from subordinates, peers, and teams throughout
the organization
Definitions in Business Process Documentation
• Business process = defined sequence of business activities that use resources to
transform specific inputs into outputs to achieve business goal
• Business analysis = process of defining business process requirements and evaluating
potential improvements
• Business model = simple, abstract representation of one or more business processes
• Documentation = explains how business processes and business systems work, tool for
information transmission and communication
Business Process Documentation can review to improve in four major areas:
1. Effectiveness: are the outputs of the process obtained as expected?
2. Efficiency: can the same outputs be produced with fewer inputs and resources?
3. Internal control: are the internal controls working?
4. Compliance to various statutes and policies: does the process comply with constantly
changing local, state, federal, and international laws and regulations?
Business models create value in the following ways:
• Managing complexity: models are simpler than processes and systems they depict, but
they incorporate the essential elements.
• Eliciting requirements: models offer a communications tool that can be used to interview
involved parties and discuss the impact of possible changes
• Reconciling viewpoints: combine various local views into one integrated view
• Specifying requirements: basis for documentation of the changed process or system
• Managing compliance: models can be used to identify legal and regulatory requirements
and how those requirements affect business processes
• Supporting training: models can support training of employees on how to implement new
business processes
• Managing and reusing knowledge: models support knowledge management, the prac-
tice of systematically capturing individuals’ knowledge and making it available where
needed throughout the organization
, Activity models = describe the sequence of workflow in a business process or processes
• To represent the sequential flow and control logic of a set of related activities
• Must be able to describe:
o Events that start, change, or stop flow in the process
o Activities and tasks within the process
o The sequence of flow between tasks
o Decision points that affect the flow
o Division of activity depending on organizational roles
Building blocks for Business Process Model Notation Diagrams
• Events: include start, intermediate, and end events; modelled as small circles: one,
double or thick line
• Activity: represents specific steps in the business process; modelled as rounded
rectangles
• Sequence flows: indicate the progression of activity within the process; modelled as
arrows
• Gateway: process branching and merging as a result of decisions; modelled as
diamonds; different types: exclusive (x), inclusive (circle) or parallel (+)
• Annotations: to add additional descriptive information to the model; modelled with text
inside a bracket connected to other model symbols with a dashed line
• Pool = organization wherein a part of the business process is done
• Lanes = department in a pool
• Message flow: dashed arrow with a small circle at the starting end; interactions between
pools
Different gateway types
Different event types
Chapter 1
Information is a strategic asset if the firm:
1. Knows what information it needs
2. Develops systems to collect, store, and process that information
3. Uses that information to make critical decisions to affect performance and profitability
Accounting Information System (AIS) = system that records, processes, summarizes,
reports, and communicates the results of business transactions to provide financial and
nonfinancial information to facilitate decision making
Attributes of useful information
1. Relevance
a. Confirmatory, or feedback value: corrects or confirms what had been predicted in
the past
b. Predictive value: helps with forecasting the future
c. Materiality: is above a threshold where missing or inaccurate information would
impact decisions
2. Faithful representation
a. Complete: includes all relevant transactions
b. Neutrality: not biased one way or the other
c. Free from error: contains no mistakes or inaccuracies
Difference between data and information
• Data = raw facts that describe the characteristics of an event, have no meaning in
isolation
• Information = data organized in a meaningful way to be useful to the user
Difference between discretionary and mandatory information
• Discretionary = not obligated to provide this, management decides if it wants to collect
data for this information based on costs, generally produced for internal information
purposes
• Mandatory = obligated to provide this, usually produced at the lowest possible cost
An AIS can influence multiple types of management:
• Enterprise Resource Planning System (ERP) = centralized database that collects data
from throughout the firm
• Supply Chain Management = management of chain of interaction with suppliers
• Customer relationship management = management of interaction with customers
• Firm profitability: lowering inventory, attract new customers, lower cost, better serve
customers
• Stock price
o Automate: replace human labor in automating business processes
o Informate-up: provide information to senior management
o Informate-down: provide information to employees
o Transform: fundamentally redefine business processes and relationships
,Chapter 2
IMA Competency Framework: 6 areas of skills for accountants
1. Strategic management: lead strategic planning process, guide decision making, manage
organizational risks, and monitor performance
2. Reporting and control: measure and report organizational performance in compliance
with appropriate standards
3. Technology and analytics: manage technology and analyse data to enhance
organizational success
4. Business acumen and operations: contribute as a cross functional business partner and
contribute to all areas of organizational operations
5. Leadership: facilitate collaboration and inspire others to achieve organizational goals
6. Professional ethics and values: demonstrate commitment to professional values, ethical
behaviour, and legal compliance critical to a sustainable business model
CGMA Competency Framework: 4 areas of skills for accountants
1. Technical skills: to contribute to developing an organization’s strategic goals and assure
that their performance contributes to strategic success
2. Business skills: understand the organization’s environment and its overall strategic
direction
3. People skills: to manage effectively, communicate well, and collaborate with a diverse
set of stakeholders
4. Leadership skills: to drive performance from subordinates, peers, and teams throughout
the organization
Definitions in Business Process Documentation
• Business process = defined sequence of business activities that use resources to
transform specific inputs into outputs to achieve business goal
• Business analysis = process of defining business process requirements and evaluating
potential improvements
• Business model = simple, abstract representation of one or more business processes
• Documentation = explains how business processes and business systems work, tool for
information transmission and communication
Business Process Documentation can review to improve in four major areas:
1. Effectiveness: are the outputs of the process obtained as expected?
2. Efficiency: can the same outputs be produced with fewer inputs and resources?
3. Internal control: are the internal controls working?
4. Compliance to various statutes and policies: does the process comply with constantly
changing local, state, federal, and international laws and regulations?
Business models create value in the following ways:
• Managing complexity: models are simpler than processes and systems they depict, but
they incorporate the essential elements.
• Eliciting requirements: models offer a communications tool that can be used to interview
involved parties and discuss the impact of possible changes
• Reconciling viewpoints: combine various local views into one integrated view
• Specifying requirements: basis for documentation of the changed process or system
• Managing compliance: models can be used to identify legal and regulatory requirements
and how those requirements affect business processes
• Supporting training: models can support training of employees on how to implement new
business processes
• Managing and reusing knowledge: models support knowledge management, the prac-
tice of systematically capturing individuals’ knowledge and making it available where
needed throughout the organization
, Activity models = describe the sequence of workflow in a business process or processes
• To represent the sequential flow and control logic of a set of related activities
• Must be able to describe:
o Events that start, change, or stop flow in the process
o Activities and tasks within the process
o The sequence of flow between tasks
o Decision points that affect the flow
o Division of activity depending on organizational roles
Building blocks for Business Process Model Notation Diagrams
• Events: include start, intermediate, and end events; modelled as small circles: one,
double or thick line
• Activity: represents specific steps in the business process; modelled as rounded
rectangles
• Sequence flows: indicate the progression of activity within the process; modelled as
arrows
• Gateway: process branching and merging as a result of decisions; modelled as
diamonds; different types: exclusive (x), inclusive (circle) or parallel (+)
• Annotations: to add additional descriptive information to the model; modelled with text
inside a bracket connected to other model symbols with a dashed line
• Pool = organization wherein a part of the business process is done
• Lanes = department in a pool
• Message flow: dashed arrow with a small circle at the starting end; interactions between
pools
Different gateway types
Different event types
