Accounting Information Systems: The Processes and Controls, 2nd Edition

INTERRELATIONSHIPS OF BUSINESS PROCESSES AND THE AIS (STUDY OBJECTIVE 1)

Chapter 1 introduced an accounting information system as a system that captures, records, processes, and reports accounting information. The information captured is the result of financial transactions within the organization or between the organization and its customers and vendors. When a transaction occurs, there are systematic and defined steps that take place within the organization to complete the underlying tasks of the transaction. These steps are business processes. A business process is a prescribed sequence of work steps completed in order to produce a desired result for the organization. A business process is initiated by a particular kind of event, has a well-defined beginning and end, and is usually completed in a relatively short period of time. Business processes occur so that the organization may serve its customers.

Every organization exists to serve customers in some way. Some organizations make and sell products, while others provide services to customers. Nearly everything that an organization does to fulfill its day-to-day activities is part of a business process. When organizations buy, sell, produce, collect cash, hire employees, or pay expenses, they are engaged in business processes, all of which support the objective of serving customers. The examples of beverage or food service to customers are business processes.

Each business process has a set of systematic steps undertaken to ...