OVERVIEW OF TRANSACTION PROCESSING AND INTEGRATED INFORMATION SYSTEM

Learning Objectives  Describe Accounting Information System (AIS)  Discuss how an AIS can add value to an organization  Identify basic transaction (data) processing cycles  Explain an integrated information system (ERP system) System  A set of two or more interrelated components interacting to achieve a goal  Goal Conflict  Occurs when components act in their own interest without regard for overall goal  Goal Congruence  Occurs when components acting in their own interest contribute toward overall goal

Chapter 1-A

OVERVIEW OF TRANSACTION PROCESSING AND INTEGRATED INFORMATION SYSTEM

ACCOUNTING INFORMATION SYSTEM

Lecturer: Vũ Quốc Thông

Learning Objectives

Describe Accounting Information System (AIS)

Discuss how an AIS can add value to an organization

Identify basic transaction (data) processing cycles

Explain an integrated information system (ERP system)

Accounting Information System (AIS)

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What Is a System?

System

A set of two or more interrelated components interacting to achieve a goal

Goal Conflict

Occurs when components act

in their own interest without regard for overall goal

E.g.?

Data vs Information

Dataare facts that are recorded and stored

Insufficient for decision making

Informationis processed data used in decision making

Too much information however, will make it more, not less, difficult to make decisions This is known as Information

Overload.

Information

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Accounting Information System

An Information System:

Collect, process, store financial data and report financial information

If Accounting = language of business

AIS = information providing vehicle

Components of an AIS

People using the system

Procedures and Instructions

For collecting, processing, and storing data

Organizing Data

Software

Information Technology (IT) Infrastructure / Hardware

Computers, peripherals, networks, and so on

Internal Control and Security

Safeguard the system and its data

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Picture?

Accounting Information System

INFORM ATION

(e.g ?)

DATA

(e.g ?)

?

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?

C B A

AIS and Business Functions

Collect and store data about organizational:

Activities, resources, and personnel

Transform data into information enabling

Management to:

Plan, execute, control, and evaluate

Activities, resources, and personnel

Provide adequate control to safeguard

Assets and data

How an AIS can add value to an organization

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How an AIS can add value …

A well-designed AIS can add value to an organization…

AIS Value Add

Improve Quality and Reduce Costs

Improve Efficiency

Improve Sharing Knowledge

Improve Internal Control

Improve Decision Making

Improve Supply Chain

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Improve Decision Making

Identify situations that require action

Provide alternative choices

Reduce uncertainty

Provide feedback on previous decisions

Provide accurate and timely information

Value Chain

The set of activities a product or service moves along before as output it is sold to a customer

At each activity the product or service gains value

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Inbound Logistics Operations Outbound Logistics Marketing/Sales Service

Value Chain

Basic transaction processing cycles

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Transaction processing cycles

Systems working toward organizational goals

Revenue

Expenditure

Human Resources Financing

Enterprise

Business Process Cycles

Revenue

Expenditure

Production

Human Resources

Financing

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Give–Get exchanges

Between two entities

Measured in economic terms

Identify Give-Get rule in each business process cycle?

Business Process Cycles (cont.)

Business Cycle Give–Get

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An integrated information system (ERP system)

ERP Systems

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Integrated information system

Enterprise Resource Planning

(ERP) system

Accounting cycle =

central system

Enterprise Resource Planning (ERP)

Integrate an organization’s information into …

an overall / extensible AIS

ERP modules:

Accounting / Financial

Human resources and payroll

Order to cash (Sales cycle)

Purchase to pay (Purchase cycle)

ERP Advantages

Integration of an organization’s data and financial

information

Data is captured once (centralized database)

Greater management visibility, increased monitoring

Better access controls

Standardizes business operating procedures

Improved customer service

More efficient manufacturing

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ERP Disadvantages

Cost

Time-consuming to implement

Changes to an organization’s existing business processes can be disruptive

Complex

Resistance to change

More on reading and practice

Reading on textbook

Chapter 1 (p 30 – 32)

Chapter 2 (p 55 – 58)

Doing homework on paper

Discussion questions

Question 1.4 (p 37)

Question 2.1 and 2.5 (p 60)

Chapter quiz (focus on relevant parts of the lecture)

Quiz of chapter 1 (p.36)

Quiz of chapter 2 (p 59, 60)

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