Question: While the Bible does not specifically address accounting information systems, the Bible does discuss money. How may biblical truths be applied in the study of AIS?
The bible is the principle book for Christians, which is revered for guidance and direction in many aspects of the Christian life. One of the issues addressed in the bible deals with money and how believers should handle their finances. Christians believe God is the supplier of all riches but requires all people to take care of all these riches properly. Philippians 4:19states that “My God will meet all your needs according to the riches of his glory in Christ Jesus”. This means God is the originator of money and wants his people to be responsible with the money. However, biblical teachings also state that accounting is necessary to reduce fraud and monitor performances.
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Record keeping and budgeting are some of the issues that help in caring for the money and ensuring they are used correctly. The bible has strict instructions regarding record keeping and budgeting when it says “all who are prudent act with knowledge, but fools expose their folly” (proverbs 13:16). This verse of the bible called on individuals to be vigilant and careful when spending money. In essence, the Bible emphasizes the importance of budgeting and record-keeping for anyone who wants to succeed and stay profitable. The bible also advises against reckless spending and considers the love of money as the root of all evil.
At the same time, the bible states accounting helps resolve disputes between parties in Ecclesiastes 4:2. The verse says “keeping strict accounts with a traveling companion will reduce conflicts”. Accounting information systems are mostly used for the purpose of recording and storing important information regarding the company. The information systems then produce crucial data to users that can be used when making important decisions on an issue. The biblical principles as stated above relates directly to the Accounting Information Systems. The Bible teachings consider it wise to keep records of a company’s numbers and put a budget of all expenses.
Therefore, the bible does not state anything about Accounting Information Systems, but its basic principles regarding money can be applied to the importance of AIS. The Bible considers it wise to record all financial information and be careful in spending the money. The financial information is an important requirement to facilitate proper decision making and planning of the organization. According to Accounting Information Systems, the financial information is crucial for any management to make informed decisions since they highlight which areas of the company provide the best return on investment. The information can be used in allocating resources, avoid debts and evaluate the financial performance of a company.
Reference
Gelinas, U. J., Dull, R. G., & Wheeler, P. (1999). Accounting Information Systems (9 th ed.). Cincinnati, OH: South-Western College Pub.
Holy Bible: New International Version. (2005). Grand Rapids, MI: Zondervan.
Part 2: Brros's Thread:
How Does AIS Affect Firm Value?
How does an Accounting Information System provide firm value? This topic will be discussed at length in today’s discussion board. Before diving into the question, itself it is important to understand just what exactly an AIS is. “An AIS is defined as a system that records, processes, summarizes, and reports on business transactions to provide financial and nonfinancial information to facilitate decision making” (Richardson, et al. 2020. p. 5). What this means is that any system that is designed to catalog and keep notes on any transaction at a business is in effect an AIS in that it keeps this information to be used by the decision makers in a firm. But how exactly is this useful for the people who must pay a lot of money to install such a system? Imagine for a moment that you are looking to run a school for special needs children. Each of these children have a different condition, background, and learning capability. To ensure that you know how many teachers you’ll need to pay, how many books you’ll need to buy, how many activities you’ll need to budget for and so on you will need an AIS.
“The quality of data contained in accounting information systems has a significant impact on both internal business decision making and external regulatory compliance” (Bai, et al, 2012, p. 453). The reason that the quality of this data has so much of an effect is because it offers a way to make better decisions. If the quality of the data is poor, then it will be of little use when making decisions. But when the quality is high it allows compliance with outside regulatory bodies as well as easier decision-making abilities. It is this ability to use relevant information for making decisions that makes an AIS so important. Without any kind of accounting system in place you would be making decisions purely off guess work which is inevitably going to cause problems. Though it isn’t just the decision makers that will benefit from having this system on hand but the employees themselves will be much more effective and efficient (Richardson, et al, 2020. P.12). A teacher who doesn’t know how many children they’ll need to work with and instruct is going to be much more inefficient than the teacher who knows about all their students. However, it is very important for any firm using this kind of system to ensure the reliability of their data. “Recent accounting scandals and the subsequent requirements enacted in the Sarbanes-Oxley Act have made data reliability assessment of critical importance to organizations” (Krishnan, et al, 2005. p. 307) In short, an AIS can generate value for a firm if its data is both of a high quality and high reliability. When these two characteristics are met then the AIS provides incredible value to the firm.
Reply
Accounting Information System can generate value for a firm based on the quality of information and how reliable it can be. Businesses operate in highly competitive markets and will require information that will help provide a speedy response to complex business issues. The qualitative characteristics of any Accounting Information System can aid companies to generate decisions using information from the AIS. I agree with the discussion that the quality of information from AIS affects firm value because it allows making informed decisions. If the AIS provides poor quality information, then it will not be of value to the organization in terms of decision making. The assurance of quality and reliability of information is dependent on proper internal control.
References
Bai, X., Nunez, M., & Kalagnanam, J. (2012). Managing data quality risk in accounting information systems. Information Systems Research, 23, 453-473. Retrieved www.jstor.org/stable/23274433
Krishnan, R., Peters, J., Padman, R., & Kaplan, D. (2005). On data reliability assessment in accounting information systems. Information Systems Research, 16, 307-326. Retrieved from www.jstor.org/stable/23015757
Richardson, V. J., Chang, C. J., & Smith, R. (2020). Accounting information systems. New York, NY: McGraw-Hill Education.
Part 3: Melst's Thread:
Discuss the purpose of business process models?
The goal for many companies is to function at the most optimal level to make sure that they are making a profit and continuing to advance in their work. This requires companies to reassess their work to come up with different methods to improve their quality of work by adapting to new changes or by altering the way they do things. Business process modeling is the graphical representation of a company’s business processes or workflows, as a means of identifying potential improvements (Kothari, 2019). By adopting a business process model, a company would be able to determine how they are functioning in day-to-day operations, while also seeing the possible advancements they might gain in making certain changes to their work.
Business process models facilitates the completion of business strategy for a company. It helps identify gaps between business processes and business strategy (Proctor, 2019). This gives companies the information needed to ensure of the execution of business strategy. There is a reason why most companies use a business model process because it improves efficiency, enforces best practices, encourages innovation, increases transparency, and makes the company highly competitive (Kothari, 2019). Companies are able improve efficiency by figuring what ways will lead to higher production, output, and profits. By figuring out which practices work, and which don’t, a company can ensure that each employee or team is using the very best process for their work. Using a business process model will most likely result in a company making many changes in the way they do things, which gets workers accustom to all the new ideas. A business process model provides a bright light regarding how work activities are (or expected to be) performed, who is expected to perform the work activities, at what level of quality, upstream and downstream dependencies and impact, and the systems supporting the work activities (Proctor, 2019). By utilizing this process, a company will be able to beat a lot of their competition by continuingly to improve themselves.
Reply
Business process models are a series of activities and processes that allow a solution to be designed, developed and implemented. These are activities that need to be undertaken when documenting a process to determine areas where improvements can be made. A company can benefit from business process models by defining requirements from a process perspective and propose solutions that will achieve these process requirements. Companies use the business process model to improve the efficiency of determining how to achieve higher productivity and profits. The business process model will help an organization to make the necessary changes in its operations, including a change in management. In the long run, I believe business process models can be what a business needs to gain a competitive advantage in the industry.
References
Kothari, A. (2019, August 11). Business Process Modeling: Definition, Benefits and Techniques. Retrieved from https://tallyfy.com/business-process-modeling/.
Proctor, J. (2019, January 8). Key Advantages of Business Process Modeling. Retrieved from https://www.inteqgroup.com/blog/key-advantages-of-business-process-modeling.
Part 4: Ansi's Thread:
Describe how data flow models assist a business in understanding their accounting information systems and the development of those systems?
A data flow model is a diagrammatic representation of the flow and exchange of information within a system (What). These models are usually used to describe or show how data flow through a system using activities and processes of a business. Data flow models are used to identify the processes of a system, the areas within a system where information is stored, and information that is received (What). Data flow diagrams are also often used by creating multiple subsystems to show the process or activity.
Data flow models are a visual way of showing the development of accounting information systems or AIS. One way is that these charts record how a business processes are performed and how documents flow through the organization. By understanding how business processes are performed it allows employees to understand how the AIS works. Another way data flow models are used is to set standard symbols to visually describe the transaction processing procedures that a company uses and how the data flows through the system. The symbols used are often circles, rectangles, squares, ovals, triangles, arrows, and more. These shapes stand for external entity, process, data store, and data flow (Data). There are also many different types of models. One type of chart only illustrates the flow of documentation and data while an internal type of chart is used to evaluate internal controls. Internal controls are evaluated by identifying systems strengths and weaknesses. Another type of flowchart is a program flowchart. A program flowchart is done by using a computer program, and shows the sequence of logical operations.
Christians have used flow models to explain the history of the Bible and to find salvation. Corinthians 14:40 states, “but all things should be done decently and in order”. To me this verse explains how the Bible helps create order in life similar to how a data flow model helps create order in a business.
Reply
The data flow models can help a business in understanding Accounting Information Systems and how they are developed. The charts allow a business to document and communicate visually processes such as purchasing and payments. The important thing about data flow models is their visual representation, which helps users of the Accounting Information System to understand the step sequence of accounting processes. The model displays successive processes and communicate visually how the accounting process works and how each operation is done. For example, they can be applied to represent an accounting process with a sequence of steps for easy understanding. Therefore, the data flow models allow a business to facilitate the work with figures and create a clear and representative scheme.
References :
Data Flow Diagram Symbols. (n.d.). Retrieved from https://www.lucidchart.com/pages/data-flow-diagram/data-flow-diagram-symbols.
What is a Data Flow Model? - Definition from Techopedia. (n.d.). Retrieved from https://www.techopedia.com/definition/28523/data-flow-model.
