HALL, ACCOUNTING INFORMATION SYSTEMS

1、Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Introduction to Accounting Information Systems, 7eJames A. HallChapter 2Introduction to Transa

2、ction ProcessingHall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Revision: TPS consists of three subsystems: Revenue Expenditure Conversion cyc

3、le Common characteristics: Capture financial transactions Record effects of transactions on accounting rec Provide info to users to support day-to-day activities 2Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplica

4、ted, or posted to a publicly accessible website, in whole or in part.Overview: Five major sections Overview of transaction processing Objectives of the three cycles and roles Relationship among accounting records forming an audit trail Documentation techniques Techniques used to represent systems CB

5、 systems: batch and real-time Coding schemes 3Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Learning Outcomes: Understand the broad objectiv

6、es of transaction cycles. Recognize the types of transactions processed by each of the three transaction cycles Know the basic accounting records used in TPS. Understand the relationship between the traditional accounting records and their magnetic equivalents. Be familiar with documentation techniq

7、ues. Understand the differences between batch and real-time processing and the impact of these technologies on transaction processing. Be familiar with data coding schemes used in AIS.4Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scan

8、ned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Self-study: Page 14 (1) 10 of study guide! Why? It will assist you in understanding the work in the book, p 44 51 5Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Rese

9、rved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.A Financial Transaction is. an economic event that affects the assets and equities of the firm, is reflected in its accounts, and is measured in monetary terms. similar types of transactio

10、ns are grouped together into three transaction cycles: the expenditure cycle the conversion cycle the revenue cycle6Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website

11、, in whole or in part.An AIS 7Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Examples: External transactions: Sale of goods/services, purchas

12、e of inventory, discharge of financial obligations, receipt of cash Internal: Depreciation of fixed assets, application of labor, raw material, overhead of production process, transfer of inventory from one department to another 8Hall, Introduction to Accounting Information Systems, 7e2011 Cengage L

13、earning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Relationship between Transaction Cycles9Figure 2-1Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be sca

14、nned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Expenditure Cycle: Business activities begin Acquisition of materials, property, labor in the exchange of cash Usually the relationship is based on a credit rel. The disbursement of cash takes place after the

15、 receipt of goods Transaction has two parts Physical: acquisition of goods Financial: cash disbursement 10Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole

16、 or in part.Sub systems, p43 Identify IPO components with each subsystem Purchase/accounts payable: Cash disbursements: Payroll system: Fixed asset system: 11Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated,

17、or posted to a publicly accessible website, in whole or in part.Each Cycle has Two Primary SubsystemsExpenditure Cycle: time lag between the two due to credit relations with suppliers: physical component (acquisition of goods) financial component (cash disbursements to the supplier)Conversion Cycle

18、: the production system (planning, scheduling, and control of the physical product through the manufacturing process) the cost accounting system (monitors the flow of cost information related to production)Revenue Cycle: time lag between the two due to credit relations with customers : physical comp

19、onent (sales order processing) financial component (cash receipts)12Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Accounting Records: Manual

20、 system: Documents Journals Ledgers Audit trail CB Systems Master file Transaction file Reference file 13Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole

21、or in part.Manual system: Documents Document: Evidence of an economic event Source Documents - used to capture and formalize transaction data needed for transaction processing Product Documents - the result of transaction processing Turnaround Documents - a product document of one system that become

22、s a source document for another system14Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Source doc Product Turn: Example: sales cause the sale

23、s clerk to prepare a multiple sales order, which is the evidence that a sale occurred Copies of this source document is entered into the sale system Convey info to billing, shipping, AR etc. Specific activities are triggered Customers bill is a product document of the sales system. Bill consists of

24、a remittance advice + payment cash receipts system 15Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Manual System (cont.): Journals - a recor

25、d of chronological entry special journals - specific classes of transactions that occur in high frequency general journal - nonrecurring, infrequent, and dissimilar transactions Ledger - a book of financial accounts general ledger - shows activity for each account listed on the chart of accounts sub

26、sidiary ledger - shows activity by detail for each account type16Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Flow of Information from Econ

27、omic Event Into the General Ledger17Figure 2-8Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Computer-Based Systems The audit trail is less o

28、bservable in computer-based systems than traditional manual systems. The data entry and computer programs are the physical trail. The data are stored in magnetic files.18Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or

29、duplicated, or posted to a publicly accessible website, in whole or in part.Computer Files Master File - generally contains account data (e.g., general ledger and subsidiary file) Transaction File - a temporary file containing transactions since the last update Reference File - contains relatively c

30、onstant information used in processing (e.g., tax tables, customer addresses) Archive File - contains past transactions for reference purposes19Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a

31、 publicly accessible website, in whole or in part.EXPLANATION OF STEPS IN FIGURE:1. Compare the AR balance in the balance sheet with the master file AR control account balance.2. Reconcile the AR control figure with the AR subsidiary account total.3. Select a sample of update entries made to account

32、s in the AR subsidiary ledgerand trace these to transactions in the sales journal (archive file).4. From these journal entries, identify source documents that can be pulled from their files and verified. If necessary, confirm these source documents by contacting the customers.Accounting Records in a

33、 Computer-Based System20Figure 2-11Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.SourceDocumentJournalGeneralLedgerFinancialStatementsFinanc

34、ialStatementsGeneralLedgerJournalSourceDocumentAudit TrailAccountants should be able to trace in both directions.Sampling and confirmation are two common techniques.21Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or dup

35、licated, or posted to a publicly accessible website, in whole or in part.Accounts Receivable Control Account-General LedgerAccounts Receivable Subsidiary Ledger (sum of all customers receivables)Sales JournalCash Receipts JournalSales OrderDeposit SlipRemittance AdviceShipping NoticeExample of Traci

36、ng an Audit TrailVerifying Accounts ReceivablePhysicalFinancial22Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Documentation Techniques Docu

37、mentation in a CB environment is necessary for many reasons. Five common documentation techniques: Entity Relationship Diagram Data Flow Diagrams Document Flowcharts System Flowcharts Program Flowcharts23Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserv

38、ed. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Entity Relationship Diagram (ERD) A documentation technique to represent the relationship between entities in a system. The REA model version of ERD is widely used in AIS. REA uses 3 types o

39、f entities: resources (cash, raw materials) events (release of raw materials into the production process) agents (inventory control clerk, vendor, production worker)24Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or dup

40、licated, or posted to a publicly accessible website, in whole or in part.Cardinalities Represent the numerical mapping between entities: one-to-one one-to-many many-to-many25Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied

41、 or duplicated, or posted to a publicly accessible website, in whole or in part.Sales-personCarTypeCustomerOrderVendorInventoryAssignedPlacesSupplyEntityRelationshipEntity1MMM11Cardinalities26Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not

42、be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Data Flow Diagrams (DFD) use symbols to represent the processes, data sources, data flows, and entities in a system represent the logical elements of the system do not represent the physical system27Hal

43、l, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Data Flow Diagram SymbolsEntityNameNProcessDescriptionData StoreNameDirection of data flow28Figur

44、e 2-12Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.System Flowcharts illustrate the relationship among processes and the documents that flo

45、w between them contain more details than data flow diagrams clearly depict the separation of functions in a system29Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website

46、, in whole or in part.Symbol Set for RepresentingManual ProceduresTerminal showing sourceor destination of documentsand reportsSource document orreportManual operationFile for storing sourcedocuments andreportsAccounting records(journals, registers,logs, ledgers)Calculated batch totalOn-page connect

47、orOff-page connectorDescription of processor commentsDocument flowline30Figure 2-17Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Sales Depar

48、tmentCredit Department WarehouseShipping DepartmentFlowchart Showing Stated Fact I Translatedinto Visual SymbolsCustomerCustomer OrderPrepare SalesOrdersSales Order #1Sales Order #1Sales Order #1Sales Order #131Figure 2-18Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning.

49、 All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.32Flowchart Showing All Stated Facts Translated into Visual SymbolsFigure 2-20Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Rese

50、rved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.System Flowcharts are used to represent the relationship between the key elements-input sources, programs, and output products-of computer systems depict the type of media being used (pape

51、r, magnetic tape, magnetic disks, and terminals) in practice, not much difference between document and system flowcharts33Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible w

52、ebsite, in whole or in part.Symbol Set for Representing Computer ProcessesHard copyComputer processDirect access storagedeviceMagnetic tapeTerminal input/output deviceProcess flowReal-time (online)connectionVideo displaydevice34Figure 2-21Hall, Introduction to Accounting Information Systems, 7e2011

53、Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.35Flowchart Showing Translation of Facts 1, 2, and 3 into Visual SymbolsFigure 2-22Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Lea

54、rning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Flowchart Showing All Facts Translated into Visual Symbols36Figure 2-23Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reser

55、ved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Figure 2-24Program Flowchartsillustrate the logic used in programsProgram Flowchart SymbolsLogical processDecisionTerminal start orend operationInput/outputoperationFlow of logicalprocess37

56、Hall, Introduction to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Modern Systems versus Legacy Systems Modern systems characteristics: client-server based and p

57、rocess transactions in real time use relational database tables have high degree of process integration and data sharing some are mainframe based and use batch processing Some firms employ legacy systems for certain aspects of their data processing. Accountants need to understand legacy systems. Leg

58、acy systems characteristics: mainframe-based applications batch oriented early legacy systems use flat files for data storage later legacy systems use hierarchical and network databases data storage systems promote a single-user environment that discourages information integration38Hall, Introductio

59、n to Accounting Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Record Structures for Sales, Inventory, and Accounts Receivable Files39Figure 2-28Hall, Introduction to Account

60、ing Information Systems, 7e2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Database Backup ProceduresDestructive updates leave no backup.To preserve adequate records, backup procedures must be imple