AFM341 Lecture Notes - Lecture 1: Management Accounting, Information Overload, Requirements Elicitation
28 Jun 2018
School
Department
Course
Professor
Information is a strategic asset if the firm knows what information it needs, develops systems to
collect that information, and uses that information to make critical decisions to impact
performance
•
Introduction
However, the data need relevance, clarity, and accuracy.
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This is why accountants are considered in a good position of business analyst because of
how we access and attest to quality of information
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We make decisions such as Outsource vs. structure a warehouse to lease, etc.
○
Firms have access to tremendous amount of data and use them to benchmark activities and
compare results to determine the most effective way to allocate resources such as talent, capital,
and expenses
•
Accountants As Business Analysts
It is a system that records, processes, summarizes, and reports on business transactions to
provide financial and non
-
financial information to facilitate decision making
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Ensure internal controls
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AIS collects, processes, and reports information deemed useful in decision making
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Information system
Accounting
AIS has two traditional disciplines:
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Accounting Information System (AIS) is used in every firm•
Definition of Accounting Information Systems
AIS explained using a general system below
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•
A Simple Information System
Predictive value (forecasting future)
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Feedback value (corrects/confirm past)
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Timeliness (available when needed or in time to impact decisions)
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Relevance
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Verifiable (can be confirmed by an independent party)○
Representational faithfulness (reports what actually happened)○
Neutrality (information is not biased)○
Reliability
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Information is relevant only if it would affect a business decision
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Relevance
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Free from bias and error
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Reliability
•
The best information is reliable information after an audit is complete but that wouldn’t be
timeliness
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The most relevant information may require an estimate of values but it may be subject to
bias
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Trade offs between relevance and reliability
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Best information might include some information that tends to be more reliable and other tends
to be more relevant and in combination complement each other
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Attributes of Useful Information
Data
are raw facts that describe the characteristics of an event that , in isolation, have little
meaning
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Data Versus Information
Chapter 1
-
Accounting Information systems and firm
value
January 4, 2018 11:57 AM
AFM 341 Page 1
Document Summary
Chapter 1- accounting information systems and firm value. Information is a strategic asset if the firm knows what information it needs, develops systems to collect that information, and uses that information to make critical decisions to impact performance. Firms have access to tremendous amount of data and use them to benchmark activities and compare results to determine the most effective way to allocate resources such as talent, capital, and expenses. However, the data need relevance, clarity, and accuracy. This is why accountants are considered in a good position of business analyst because of how we access and attest to quality of information. We make decisions such as outsource vs. structure a warehouse to lease, etc. Accounting information system (ais) is used in every firm. It is a system that records, processes, summarizes, and reports on business transactions to provide financial and non-financial information to facilitate decision making. Ais collects, processes, and reports information deemed useful in decision making.
