Topic 2 - Week 1

Topic 2 - Week 1 - Topic 2 There are 5 interacting...

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Topic 2 There are 5 interacting components if an accounting information system: 1. Hardware 2. Software 3. Data 4. People 5. Procedures Six reasons why information technology is important to accountants: 1. Information technology must be compatible with, and support, the other components of an AIS 2. Accounting professionals often help clients make hardware and software purchases 3. Auditors must evaluate computerised systems 1. Auditors can’t audit an organisation without looking at its system 4. Accountants are often asked to evaluate the efficiency and effectiveness of an existing system 1. Therefore, they must be familiar with the strengths and weaknesses of the current system, as well as an understanding of what alternate technologies might work better 5. IT is likely to affect the way they will work in the future 1. New ways of gathering and recording information 6. Understanding how IT affects accounting systems is vital to passing most accounting certification examinations Input, Processing and Output devices: 1. Peripheral equipment surround the computer and help it process data 1. Classification is usually done by the tasks they perform 2. Input equipment: 1. Such as scanners and keyboards 2. Enable users to enter data into a computer system 3. Output equipment: 1. Such as monitors and printers 2. Enable users to see processed results 4. Secondary storage devices: 1. Such as hard disks 2. Enable users to store data for future reference 5. Communication equipment: 1. Such as modems 2. Enable users to transmit data over data networks 2. 3 phase operation 1. INPUT – PROCESSING – OUTPUT cycle INPUT devices: 1. Starting point of the process 2. AIS require input methods and procedures that ensure complete, accurate, timely, and cost-effective ways for gathering and inputting accounting data 3. Source documents and data transcription:
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1. Starting point for collecting accounting data in most AIS’s is a source document 2. Importance of source documents to AIS: 1. They are human readable 2. They can be completed by the user 3. Acts as a backup if something happens to the computerised version 4. Starting point of an audit trial 3. Disadvantage of source document is that they are not machine readable 1. Needs to be transcribed into machine-readable media 2. Data transcription is inefficient, labour intensive, time-consuming, costly and nonproductive process that has the potential to bottleneck data at the transcription site and can provide opportunities for fraud 4. POS device: 1. Point-of-sale devices to gather and record pertinent data electronically at the time a sale is made 1. Barcode readers 2. Smart cash registers 2. Helps track shipments 3. Allow retailers to centralise price information in online computers 4. Helps avoid the task of affixing price sticks to individual items on retail store shelves 5. Helps update prices easily 6. Can help verify accuracy, reasonableness and completeness 5. Magnetic Ink Character Recognition (MICR):
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Topic 2 - Week 1 - Topic 2 There are 5 interacting...

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