WHAT IS AN AIS?

• An AIS is a system that collects, records,

stores, and processes data to produce
information for decision makers.
• It can:
– Use advanced technology; or
– Be a simple paper-and-pencil system; or
– Be something in between.
• Technology is simply a tool to create,
maintain, or improve a system.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 1 of 43
 WHAT IS AN AIS?

• The functions of an AIS are to:

– Collect and store data about events,
resources, and agents.
– Transform that data into information that
management can use to make decisions
about events, resources, and agents.
– Provide adequate controls to ensure that the
entity’s resources (including data) are:
• Available when needed
• Accurate and reliable

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 2 of 43
 SYSTEMS, DATA, AND INFORMATION

• Most systems are composed of smaller

subsystems . . .
• . . . And vice versa!

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 3 of 43
 SYSTEMS, DATA, AND INFORMATION

• Characteristics that make information

useful:
– Relevance
– Reliability
– Completeness
– Timeliness
– Understandability
– Verifiability
– Accessibility

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 4 of 43
 WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• Accounting is an information-providing
activity, so accountants need to
understand:
– How the system that provides that
information is designed, implemented
and used.
– How financial information is reported
– How information is used to make
decisions

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 5 of 43
 WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• Other accounting courses focus on how
the information is provided and used.
• An AIS course places greater emphasis
on:
– How the data is collected and
transformed
– How the availability, reliability, and
accuracy of the data is ensured
• AIS courses are not number-crunching
courses

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 6 of 43
 WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• The skills are critical to career success.
• Auditors need to evaluate the accuracy
and reliability of information produced by
the AIS.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 7 of 43
 WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• The skills are critical to career success.
• In private industry and not-for-profits,
systems work is considered the most
important activity performed by
accountants.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 8 of 43
 WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• The skills are critical to career success.
• In management consulting, the design,
selection, and implementation of
accounting systems is a rapid growth area.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 9 of 43
 WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• The skills are critical to career success.
• The AIS course complements other
systems courses.
• Other systems courses focus on design and
implementation of information systems,
databases, expert systems, and
telecommunications.
• AIS courses focus on accountability and
control.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 10 of 43
 WHY STUDY ACCOUNTING
INFORMATION SYSTEMS?
• It’s fundamental to accounting.
• The skills are critical to career success.
• The AIS course complements other
systems courses.
• AIS topics are tested on the new CPA
exam.
• Makes up about 25% of the Business
Environment & Concepts section of the CPA
exam.

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart 11 of 43