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The first chapter is an overview of Accounting Information Systems.

.Accounting Information Systems - a collection of resources, such as people and

equipment to transform data into information.

.An organization depends on Information Systems in order to stay competitive.

.Two types of user in accounting information: external and internal.

External users include: Stockholders, investors, creditors, government agencies,

customers and vendors, competitors, labor unions, and the

public. They depend on a variety of outputs from an

organization's accounting systems.

Internal users: consist of managers, whose requirements depend on their level in

an organization or on the particular function they perform.

.Information Systems require the use of a computer technology in an organization to provide information to users. The information is a collection of computer hardware and software that transform data into useful information.

Different types of computer-bases information systems include:

Data Processing - known as Electronic data processing (EDP), performs transaction-oriented data processing

Management Information Systems (MIS) that provides decision riented information to managers.

Decision Support Systems, in which data are processed into a decision-making format for the end user. It requires the use of decision models and specialized databases. And it's designed for specific types of decisions for specific Users.

Expert systems, which is a knowledge-based information system

that uses its knowledge about a specific application area to act as

an expert consultant to end users.

Executive Information Systems, which is tailored to the strategic

information needs of top-level management.

Accounting Information Systems, which is designed to transform

accounting data into information.

An organization consists of financially related activities which are part of business processes. A business process is an interrelated set of tasks that involve data, organizational units, and a logical time sequence.

Some of the business processes include:

. Inbound and outbound sales logistics, Marketing, Operations, and

Services etcÐ'...

An organization's activities can also be view through transaction cycles.

They are:

A. Revenue cycle - which are events related to the distribution of goods and

Services.

B. Expenditure cycle- which are events related to the acquisition of good and

Services.

C. Production cycle -which are events related to the transformation of resources

into goods and services

D. Financial cycle - which are events related to the acquisition and management

of capital funds.

Accounting information systems include system development activities. These Activities are systems analysis, systems design, and systems implementation. And within these phases, there are tools - systems techniques that are essential to both internal and external auditors.

How are the systems techniques used in these phases?

.In the analysis phase, you formulate and evaluate solutions to systems problems.

.In systems design, you specify details of the solution selected by the systems

analysis process.

.In systems implementation, you place the designs and methods into operation.

This involves testing, documenting, and reviewing of the system.

The most commonly used systems techniques are Flowcharts. These are symbolic

diagrams that show the data flow and sequence of operations in a system. The

basic symbols include, input/output, the process symbol, the flow-line symbol and the annotation symbol.

Symbols are used in a flowchart to represent the functions of information or other type of system.

Different types of flowcharts:

.Systems flowchart - used by both auditors and systems personnel. They

identify the overall flow of operation in a system. And they are associated

with the analysis phase.

. Program flowcharts - used primarily by systems development personnel.

Focus on details, and are associated with the design phase.

. Analytical flowchart - similar to a systems flowchart and may be used to

analyze the distribution of document in a system.

. Document flowchart is similar to analytical, but contains less details

about the processing function.

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Business transactions are transmitted by electronic networks. Electronic networks are groups of computers that are connected together electronically. They allow companies to distribute information across