AIS Exam 1 vocabulary

  1. Accounting information system
    A collection of interrelated processes, technologies, and documents designed to capture primarily financial data and process them into information for making decisions
  2. AIS structure
    Most accounting information systems comprise five parts: inputs (such as source documents), processing tools (such as general ledger software), outputs (such as the general purpose financial statements), storage (such as computer disks), and internal controls (such as separation of duties)
  3. Conceptual framework
    a document produced by the Financial Accounting Standards Board in 1977, intended to guide the development of future accounting principles. PArts include objective of financial reporting, elements of financial statements, qualitative characteristics of accounting information, assumptions, principles, and constraints
  4. Information competence
    the ability to formulate research questions, locate the information to answer the questions, evaluate information quality, and use it for decision making
  5. Popular/ practitioner information
    one of three information types used in accounting information systems. this type of information has often been through some review and editing process but may not rely on strict research protocols.
  6. Scholarly information
    one of three information types used in accounting information systems. This type of information is intended primarily for an academic audience and has been through a rigorous review process before publication. Typically follows strict research protocols
  7. Sponsored/commercial information
    One of the three information types used in acounting information systems. This type of information may be less objective than the other two forms but can be useful in researching specific products or gaining a company's point of view on an issue. Example include and www.find
  8. unstructured problems
    frequently encountered in the study of accounting information systems and the practice of accounting. Refers to problems without single, correct responses/solutions that require creativity and judgment. Unstructured problems may have more than one acceptable answer, although some responses to them may clearly be incorrect or inappropriate
  9. Accounting
    is the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information
  10. Accounting cycle
    the set of repetitive activities used to prepare general purpose financial statements. Although many parts of the accounting cycle can be completed more easily with information technology, some parts require significant human judgment and decision making
  11. Adjusting entries
    journal entries made at the end of an accounting period to account for timing differences between cash flow and accrual basis revenues and expenses. Types include accrued revenue, accrued expense, deferred revenue, prepaid assets, uncollectible receivables, and depreciation
  12. Bookkeeping
    the process of recording transactions in a journal, posting them to ledger accounts, and preparing basic financial statements. Though often confused with accounting, bookkeeping is distinct; it focuses on the mechanical aspects and rules of accounting and often can be completed more easily with the aid of information technology
  13. External transactions
    transactions that involve parties external to the organization. Typically do not require adjusting entries at the end of a period. Examples include selling inventory, purchasing plant assets, and paying vendors
  14. General-purpose financial statements
    Collective term referring to the balance sheet, income statement, statement of changes in equity, and statement of cash flows. Must be prepared in accordance with generally accepted accounting prinicples
  15. Human judgement
    a critical element of accounting and accounting information systems. For example, accountants exercise judgment in deciding which transactions are recordable in the AIS and in making decisions based on financial information
  16. Information technology
    computer hardware and software, often employed in accounting information systems to make routine tasks more efficient. Examples include general ledger packages and enterprise resource planning software
  17. Internal transactions
    transactions that do not involve parties external to the organization. Typically require adjusting entries at the end of an accounting period. Examples include depreciation of fixed assets and the use of prepaid assets such as supplies
  18. Principles of debit and credit
    the rules used to record transactions in a journal. Assets and expenses increase with debits and decrease with credits; liabilities, equity, and revenue follow the opposite rules
  19. Source documents
    paper-based or electronic documents often used as the basis for journal entries in an accounting information system. Examples include remittance advices, purchase orders, and check stubs
  20. Brown's taxonomy of risk
    A way of looking at and categorizing risk. Four broad categories include financial, operational, strategic, and hazard
  21. COSO
    Committee of Sponsoring Organizations of th eTreadway Commision. Include five organizations: the Institute of Management Accountants, the American Institute of Certified Public Accountants, the American Accounting Association, the Institute of Internal Auditors, and the Financial Executives Institute. Created two important documents (integrated frameworks) related to internal control and risk management.
  22. Foreign corrupt practices act
    one of the earliest laws focused on business ethics. Passed in 1977. Prohibits conduct that would be considered illegal in the United States, even if that conduct is acceptable in foreign countries
  23. Internal control
    one element of an accounting information system. Policies and procedures designed to achieve four objectives: safeguarding assets, ensuring financial statement reliability, promoting operational efficiency, and encouraging compliance with management's directives
  24. Internal control-integrated framework
    one of two COSO documents. Contains five elements to help professionals think about internal control: control environment, risk assessment, control activities, information and communications and monitoring
  25. Sarbanes-Oxley act of 2002
    Federal legislative response to the corporate scandals of the late 20th century. Imposes specific duties on managers and auditors for the review of internal controls, disclosures, and related issues. Specifies and penalties for noncompliance
  26. Capability maturity model
    a five-stage model developed by Humphrey, used to categorize and improve business processes
  27. Iterative
    in the context of accounting information systems, iterative refers to the idea that steps dont always proceed in a linear fashion and/or that the development of systems documentation, internal controls, and other AIS elements is rarely accomplished in a single attempt
  28. Macro-level issues
    the "big pictures" issues to be considered in adopting a specific form of information technology. The chapter discusses need, strategic fit, personnel involvement, and financing
  29. Micro-level issues
    the more focused issues to be considered in adopting a specific form of information technology. The chapter discusses cost, adaptability, training, and vendor reliability
  30. Systems development life cycle
    generic set of steps used to develop, implement, and maintain information systems. Four iterative phases include analysis, logical design, physical design, and implementation and maintenance
  31. Three-stage process
    framework proposed by Sylla and Wen regarding the adoption of information technology. Stages include intangible benefits evaluation, IT investment risk analysis, and tangible benefits evaluation
  32. Watts Humphrey
    First suggested the capability maturity model
  33. Weighted-rating technique
    System for comparing specific software packages. the user selects a list of criteria, such as cost and ease of use, and assigns each criterion a weight. Then, each software package is rated on each criterion. The rating is multiplied by the weighting to arrive at an overall weighted score, which informs (but does not dictate) the choice
Card Set
AIS Exam 1 vocabulary
AIS chp 1,2,3,5 vocabulary