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Chapter 1 - Why it is difficult to have a good AIS?

Chapter 1 - Why it is difficult to have a good AIS?. ATG 383 Spring 2002. Overview. Define an AIS Why knowledge of an AIS is valuable What is useful information What an AIS must support: different types of decisions different types of managers phases of decision making

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Chapter 1 - Why it is difficult to have a good AIS?

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  1. Chapter 1 -Why it is difficult to havea good AIS? ATG 383 Spring 2002 ATG 383 - Chapter 1

  2. Overview • Define an AIS • Why knowledge of an AIS is valuable • What is useful information • What an AIS must support: • different types of decisions • different types of managers • phases of decision making • different activities within a business ATG 383 - Chapter 1

  3. What an AIS does? ATG 383 - Chapter 1

  4. We should create useful information ATG 383 - Chapter 1

  5. Assume you are interested inpurchasing company X.. • Relevant • Feedback • Predictive • Timeliness • Reliable • Rep. Faithful. • Verifiability • Neutrality Controller of the company sends you the annual report for the year ended 12/31/95. ATG 383 - Chapter 1

  6. Assume you are interested inpurchasing some bonds.. • Relevant • Feedback • Predictive • Timeliness • Reliable • Rep. Faithful. • Verifiability • Neutrality The bonds are not traded on any markets. The broker sends you a price list. ATG 383 - Chapter 1

  7. How Relevant or Reliable is the presentation of this information? ATG 383 - Chapter 1

  8. Some may like this graph… ATG 383 - Chapter 1

  9. Others may prefer this style.. ATG 383 - Chapter 1

  10. The information must have several qualities. ATG 383 - Chapter 1

  11. 3 Components of an AIS ATG 383 - Chapter 1

  12. Make an argument that these are / are not AISs General Ledger Checkbook Balance Sheet & Income Statement ATG 383 - Chapter 1

  13. How important is knowledgeof an AIS? • Auditor • Tax Accountant • Consultant • Management Accountant ATG 383 - Chapter 1

  14. Source of Fees: Top 100 Public Accounting Firms ATG 383 - Chapter 1

  15. My prediction for next year ATG 383 - Chapter 1

  16. Work Done by Management Accountants ATG 383 - Chapter 1

  17. An AIS must support different types of decisions • Structured • Semi-structured • Unstructured ATG 383 - Chapter 1

  18. An AIS must support different types of managerial tasks • Operational • Managerial • Strategic ATG 383 - Chapter 1

  19. Relationship Between Decisions and Management Level ATG 383 - Chapter 1

  20. Strategic Managers Less relevant Less reliable Operational Managers More relevant More reliable Information and Management Level In both cases, information should be understandable. ATG 383 - Chapter 1

  21. An AIS must support phases ofdecision making Intelligence Design Choice ATG 383 - Chapter 1

  22. An AIS must support different types of tasks • Value Chain • Transaction Cycles Two common ways to describe tasks ATG 383 - Chapter 1

  23. Value Chain Firm Infrastructure Human Resources Technology Purchasing Marketing and Sales Inbound Logistics Operations Outbound Logistics Service ATG 383 - Chapter 1

  24. Transaction Cycles Obtain Capital Sell Product Hire Employees Acquire Raw Materials Build Product ATG 383 - Chapter 1

  25. Why is it difficult to build agood AIS? • Information needs to be delivered around the world. ATG 383 - Chapter 1

  26. It’s hard to create good information because it must have many different qualities. ATG 383 - Chapter 1

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