Accounting for Managers: Interpreting Accounting Information for Decision Making, 4th Edition

Chapter 9

Accounting and Information Systems

This chapter considers the use of accounting information systems. We look at different methods of data collection and different types of information systems, with a particular focus on enterprise resource planning systems. The chapter also reviews the importance of a horizontal business process perspective on organizational functioning, rather than a vertical, hierarchical or functional business unit perspective. The chapter concludes with an overview of the importance of internal controls and systems development for information systems.

Introduction to accounting and information systems

An information system is a system that collects information and presents it, usually in summarized form, for management. Information is different from data because it has been made usable by some form of summarization and/or analysis. Whilst data is a set of raw facts, information is usable. For example, sales data can be summarized and analysed by customer and/or product/service in a monthly sales analysis report and thereby becomes meaningful management information which can then be used for decision making.

Organizations will typically have an information systems (IS) strategy which follows the organizational business strategy and determines the long-term information requirements of the business. The IS strategy provides an ‘umbrella’ for different information technologies to help ensure that appropriate information is acquired, retained, shared and ...