Systems Concepts and Accounting

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Chapter 3

• Systems Concepts and Accounting

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Learning Objectives

• To learn selected concepts from the theory of
  systems
• To apply these selected concepts to the
  processing of accounting transactions
• To learn about those systems that include
  accounting information systems

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Systems Everywhere

• Solar System
• Eco-System
• Digestive System
• Transportation System
• Economic System
• Political System
• School System
• ... and on and on.

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What is a System

• A System is a set of parts (or components)
  coordinated to accomplish a set of goals.

Input
Output
Process
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Characteristics of a System

• Component Parts
• A Process
• Goal

Input
Output (Goal)
Process
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Sub/Super Systems

• Subsystem
• a component may itself be a system
• a subsystem
• Supersystem
• a system may itself be a component of a bigger
  system
• the supersystem

Supersystem
Subsystem
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Boundaries and Interfaces

• Boundaries
• Interfaces - Where boundaries meet

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Boundary and Environmet

The Environment
Boundary
System
Interaction
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Interfaces

System 2
System 1
Interface
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Types of System

• Closed Systems
• No Interaction with environment
• Relatively Closed Systems
• Controlled interaction
• Open Systems
• Uncontrolled interaction
• Feedback Control Systems
• Portion of output returned as input

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AIS as a System

• A Relatively Closed System
• Subsystems of AIS
• Classified as Application Systems
• Cash Disbursement
• Accounts Receivables
• Classified as Transaction Cycles
• Revenue Cycle
• Expenditure Cycle
• Conversion Cycle
• Financial Cycle

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Environment

• Environment
• Customers
• Vendors
• Government
• Owners
• Creditors

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Interfaces and Decoupling

• Interfaces Provided by
• Documents
• Computer Records
• General Ledger Accounts
• Decoupling (Offline Storage or Filing) Provided
  by
• Documents
• Storage media

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AIS as a Subsystem

• AIS is a subsystem of MIS

Executive Information System
Budgeting and Responsibility Reporting System
Transaction Processing System
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Decision Problems

• Unstructured Problems
• Semi-structured Problems
• Structured Problems

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Spectrum of Mgt. Info. Needs

Structured Retrospective Recurring
Unstructured Prospective Nonrecurring
Responsibility Reporting Systems
Budgeting Systems
Decision Support Systems
Transaction Processing Systems
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• Thank you