The Information System: An Accountant’s Perspective

Backup. The final argument in favor of DDP is the ability to back up computing facilities to protect against potential disasters such as fires, floods, sabotage, and

earthquakes. One solution is to build excess capacity into each IPU. If a disaster destroys a single site, its transactions can be processed by the other IPUs. This

requires close coordination between decision makers to ensure that they do not implement incompatible hardware and software at their sites.

The Need for Careful Analysis
DDP carries a certain leading-edge prestige value that, during an analysis of its pros and cons, may overwhelm important considerations of economic benefit and

operational feasibility. Some organizations have made the move to DDP without fully considering whether the distributed organizational structure will better achieve

their business objectives. Some DDP initiatives have proven ineffective, and even counterproductive, because decision makers saw in these systems virtues that were

more symbolic than real. Before taking such an aggressive step, decision makers should assess the true merits of DDP for their organization. Accountants have an

opportunity and an obligation to play an important role in this analysis.

The Evolution of Information System Models
Over the past 50 years, a number of different approaches or models have represented accounting information systems. Each new model evolved because of the shortcomings

and limitations of its predecessor. An interesting feature in this evolution is that the newest technique does not immediately replace older models. Thus, at any point

in time, various generations of systems exist across different organizations and may even coexist within a single enterprise. The modern auditor needs to be familiar

with the operational features of all AIS approaches that he or she is likely to encounter. This book deals extensively with five such models: manual processes, flat-

file systems, the database approach, the REA (resources, events, and agents) model, and ERP (enterprise resource planning) systems. Each of these is briefly outlined

in the following section.

The Manual Process Model
The manual process model is the oldest and most traditional form of accounting systems. Manual systems constitute the physical events, resources, and personnel that

characterize many business processes. This includes such tasks as order-taking, warehousing materials, manufacturing goods for sale, shipping goods to customers, and

placing orders with vendors. Traditionally, this model also includes the physical task of record keeping. Often, manual record keeping is used to teach the principles

of accounting to business students. This approach, however, is simply a training aid. These days, manual records are never used in practice. Nevertheless, there is

merit in studying the manual process model before mastering computer-based systems. First, learning manual systems helps establish an important link between the AIS

course and other accounting courses. The AIS course is often the only accounting course in which students see where data originate, how they are collected, and how and

where information is used to support day-to-day operations. By examining information flows, key tasks, and the use of traditional accounting records in transaction

processing, the students’ bookkeeping focus is transformed into a business processes perspective.

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