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Chapter 1

Chapter 1. Chapter 2. Intelligent Systems and Knowledge Management. Introduction to Accounting Information Systems. Learning Objectives. To know the attributes of information To understand decision making

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Chapter 1

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  1. Chapter 1 Chapter 2 Intelligent Systems and Knowledge Management Introduction to Accounting Information Systems

  2. Learning Objectives • To know the attributes of information • To understand decision making • To recognize how information is used for different types of decisions and at various levels in the organization • To recognize how the IS and the AIS support the management function

  3. Learning Objectives (2) • To become familiar with the support that management receives from intelligent decisions aids • To appreciate the influence of strategic planning to the ongoing success of the organization • To understand the importance of the IS’s strategic plan and the relationship of that plan to the organization’s strategic plan

  4. Intelligent Decision Aids • Decision support systems • Executive information systems • Group support systems • Expert systems

  5. Transforming data into information STORAGE PROCESSING INPUT OUTPUT Users Database Transformation Data Information Users

  6. Qualities of Information • Effectiveness: information relevant & pertinent; delivered in timely, correct, consistent, usable manner. • Efficiency: info provided through most productive and economical use of resources. • Confidentiality: protection of sensitive info from unauthorized disclosure. • Integrity: accuracy, completeness, validity re business values & expectations

  7. Qualities of Information (2) • Availability: info available when required by business process now & future. Also concerns safeguarding resources & capabilities. • Compliance: deals with complying with laws, regulations, contracts; externally imposed business criteria. • Reliability: appropriate info for management to operate and exercise financial and compliance reporting responsibilities.

  8. Principal Criterion for JudgingInformation Quality • The benefit of the information must exceed its cost

  9. Management Decision Making • Intelligence: Searching the environment for conditions calling for a decision. • Design: Inventing, developing, and analyzing possible courses of action. • Choice: Selecting a course of action. Simon, The New Science of Management Decision, 1960.

  10. Steps in Decision Making

  11. Nature of information required • Strategic managers - assess environment; project future events & conditions. • Tactical managers - focused on relevant operational units. • Operational managers - narrower in scope, more detailed, more accurate, from within.

  12. Unstructured decisions Strategic Management Tactical Management Structured Decisions Operations Management Operations and Transaction processing

  13. Information Requirements Lessaccuracy Unstructured decisions Undefined External Summarized Future Infrequent Structured Decisions WellDefined Moreaccuracy Internal Detailed Historical Frequent

  14. World Wide Web Decision models Decision Support & Executive Information Systems Entity- wide database External databases Decision Support System (DSS) or Executive Information System (EIS) Interface Hardcopy output Decision maker

  15. Decision support systems • Make use of “model base” • Do number-crunching to aid decision makers • Give access to various internal and external databases, including WWW • Permit “what-if” analyses • Executive information systems • Designed to be especially user-friendly • Lead executives to phrase their questions using intuitive menus • Display results graphically

  16. Expert Systems Knowledge base Humanexpert Knowledgeengineer Knowledge acquisition facility Inference engine User interface (includes explanation facility) User

  17. Human expert - possesses relevant knowledge • Knowledge engineer - has skill to extract knowledge and encode in knowledge base • Knowledge base - contains relevant expertise, in the form of rules • Inference engine - executes line of reasoning based on facts and rules • User interface - provides for user input to system and displays output. Contains explanation facility to let user ask Why? How? etc.

  18. Neural Networks • Computer-based systems of hardware and software. • Mimic human brain’s ability to recognize patterns, predict outcomes with incomplete information. • Derive knowledge from data; must be “trained”. • Four types: Prediction, Classification, Data Filtering, Optimization

  19. Groupware User User User Groupware Knowledge management system Database Database Database Knowledgewarehouse

  20. Strategic Planning Environment Objectives Performanceindicators Performanceindicators Critical successfactors ImplementOrganizationstructure ImplementProcess

  21. Strategic planning & the accountant • Accountant should participate in strategic planning process • Could help establish performance indicators • Should approve organizational and information systems strategic plan • Will have input when strategic plans affect Accounting Information Systems

  22. Learning Objectives • To know the attributes of information • To understand decision making • To recognize how information is used for different types of decisions and at various levels in the organization • To recognize how the IS and the AIS support the management function

  23. Learning Objectives (2) • To become familiar with the support that management receives from intelligent decisions aids • To appreciate the influence of strategic planning to the ongoing success of the organization • To understand the importance of the IS’s strategic plan and the relationship of that plan to the organization’s strategic plan

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