ACCOUNTING INFORMATION SYSTEMS (AIS811S)
FEEDBACK TUTORIAL LETTER
Assignment 2
Question 1
1. Discuss how organizations use enterprise resource planning (ERP) systems to process
transactions and provide information. (10 marks)
ERP systems incorporate all data and processes of an organization into a unified system. The
key ingredient of most ERP systems is the use of a unified database to store data for the various
system modules.
An ERP software solution like SAP can maintain information and business processes for a
variety of business functions such as Manufacturing, Supply Chain Management (SCM),
Financials, Human Resources and Customer Relationship Management (CRM).
The ability of an ERP system to provide the same updated and accurate information across
different functions is what makes the application so valuable to enterprises. Let’s take the
example of a customer order to understand this better: Before the advent of ERP applications,
once a customer order was placed, it had to follow a paper trail from department to department –
with details of the order being entered and re-entered into the applications of the different
departments. This manual process was prone to errors and delays; till the order was entered into
the application of a particular department, the goods could not be manufactured or shipped.
With an ERP system, a customer order is entered only once, and this information is available to
all the applications across different functions. Once the order is entered, the application checks if
goods are available in the inventory. If the goods are not available, it raises a purchase order
which is subsequently used by the production team to manufacture goods, and by the finance
team to issue an invoice.
2. Advances in IT are likely to have a continuing impact on financial accounting. What are
some changes you think will occur in the way financial information is gathered,
processed, and communicated as a result of increasingly sophisticated information
technology? (10 marks)
Rapidly accelerating technological advances are creating entirely new business
propositions, such as crowd-funding, peer-to-peer lending, digital currencies, mobile
banking, online investment and new payment systems
Technology has created a massive increase in the availability and use of data and social
media, shaping customer expectations and the ability of financial institutions to use
consumer data to price, target and market their products and services.
FS businesses are adopting new technologies to compete. Client demand for online
access is causing a shift towards more direct and immediate interaction with financial
products and services. Technological changes increasingly allow consumers to manage
their own savings and investments and firms need to demonstrate how they add value.
1
Recent innovations and developments in the fields of data collection, retention, and
analysis are generating great opportunities for the use of such data in the financial service
sector. Such information can be used, for instance, towards improving customer service,
customer retention, and the efficient marketing of new services. Yet before using these
information resources, the leaders of such institutions must understand and address two
forms of public concerns: privacy and security. In terms of privacy, financial entities
must identify and move to limit uses of personal data, which their customers and society
in general find unacceptable. In addition, they must make full and proper disclosure about
their use of personal data, while conforming to specific legislation recently set to regulate
these matters. In terms of security, these entities must take steps to minimize the risk of
personal data leakage by implementing security measures, while considering the
diversification of operating platforms and adopting a sector standard.
3. We stressed the importance of information technology for understanding how accounting
information systems operate. But is this the only skill valued by employers? How
important do you think ‘‘analytical thinking skills’’ or ‘‘writing skills’’ are? Discuss. (10
marks)
Analytical thinking skills are critical in the work place because they help you to gather
information, articulate, visualize and solve complex problems. Even with comprehensive
training, there will be many times where you will be put on the spot to think analytically
and the right or wrong answer could make a difference with regard to your upward
mobility within the company. You want your employees and especially your boss to trust
that you will make the most well-informed and correct decisions. Some decisions can
even make or break your career. Therefore, it is of utmost importance to have welldeveloped analytical thinking skills. Sometimes, you need to use specific techniques to
get information in and out of your brain, creating highly effective maps.
As technology has played a bigger role in our lives, our skills in critical thinking and
analysis
have declined, while our visual skills have improved
Technology allows students chances to receive feedback on their written work from
teachers
and peers. Rewriting is made much easier through the use of computer based
tools such as the use of word processing, saving to a network, and tracking previous re-writes
Question 2
1. Both external auditors and accountants engaged in systems implementation need a basic
under- standing of accounting information systems.
Required:
Compare the needs of the two groups, identifying the areas where both need the same
kind of understanding and the areas where one group has essentially different needs. (10
marks)
Accountants and auditors prepare and examine financial records. They ensure that financial
records are accurate and that taxes are paid properly and on time. Accountants and auditors
assess financial operations and work to help ensure that organizations run efficiently.
internal auditors review controls for their organization's computer systems, to ensure that the
financial data comes from a reliable source
2
Accountants may be called upon to assist a company in developing its AIS. Their knowledge of
accounting and auditing methods and procedures is important in helping a company choose or
design the best software and overall system. Also, because computers play such an important
role in modern accounting, the accountant will benefit from a background in information
systems. Accountants will also access the data in the company's AIS in order to perform their job
functions, including preparing and analyzing budgets and financial statements, preparing tax
returns and examining records for accuracy

Why are accountants/auditors involved?



Experts in financial transaction processes

Quality of AIS is determined in SDLC
How are accountants involved?

Users (e.g., user views and accounting techniques)

Members
of
SDLC
(e.g., Control Risk being minimized)

Auditors (e.g., auditable systems)
development
team
Auditor’s role in systems planning

Auditability

Security

Controls
2. What are some of the advantages of business process mapping over system flowcharts?
(10 marks)
Process mapping and flow charts are words used interchangeably and refer to creating a diagram
that illustrates a business process. The only difference between these words is that process
mapping refers to the actual process of creating a diagram; the diagram itself is called a flow
chart.
Uses
•
The activity of process mapping is conducted to understand how the steps in a business
process work together. This helps companies understand areas of inefficiencies and it
also provides visual illustrations to help businesses increase performance and
profitability. Any type of organization can often benefit from the use of process mapping.
Processes
3
•
Process mapping requires a company to take a particular process used in the operations of
the business and map it out. Each step of the process is placed in a rectangular box.
Arrows are used to show the order of the steps and ovals represent the starting or ending
point of the process. When this is placed on paper, it creates a flow chart. There are
several other symbols used in flow charts as well.
Objectives
•
Process mapping is designed to achieve several objectives. Company owners and
employees are able to view the processes of a company to better understand the steps
involved and how each step works. After diagramming a flow chart, the management
studies the steps and looks for problems. There are often steps in a process that are
impractical or do not offer any significant benefit. Management changes or eliminates
these steps to free itself from inefficient activities. There might be other steps that need
improvements. The visual diagram of a flow chart offers an easy way for companies to
locate these areas and improve them.
Roles
•
During process mapping, businesses are able to specify certain roles of employees. The
flow chart helps companies accomplish this task. Management views the flow chart, and
from it, determines the roles of each employee in the business. A flow chart may also
help companies eliminate job positions that are not productive. The company may also
see areas where extra employees are needed to further improve the efficiency and
productivity of the process.
((((((((((((((((((((((((((((((((((((((((50 marks))))))))))))))))))))))))))))))))))))))))))
4