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An accounting information system

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Please provide an explanation and one example for each of the following questions:

1. In what way does the AIS support decision-making?

2. How do experty systems improve the use of knowledge?

3. How does a modem work?

4. What are the disadvantages of prototyping relative to the waterfall approach to systems development?

5. What are system flowcharts and how are they used by accountants and auditors?

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1. An accounting information system consists of the personnel, procedures, devices, and records used by an organization to develop accounting information and communicate that information to decision makers.
The primary purpose or objective of an accounting system is to meet the organization's needs for
accounting information as efficiently as possible.
The three basic functions of an accounting system, and how it supports decision makers, are:
?Interpret and record business transactions
?Classify the effect of similar transactions in a manner that permits determination of various
totals and subtotals useful to management and used in accounting reports
?Summarize and communicate the information contained in the system directly to decision makers so that they may make an informed decision as efficiently as possible.

2. Definitions of expert systems vary. Some definitions are based on function. Some definitions are based on structure. Some definitions have both functional and structural components. Many early definitions assume rule-based reasoning.
An Expert (Knowledge Based) System is a problem solving and decision making system based on
knowledge of it's task and logical rules or procedures for using knowledge. Both the knowledge and the logic is obtained from the experience of a specialist in the area (Business Expert).
An Expert System is a program that emulates the interaction a user might have with a human expert to solve a problem. The end user provides input by selecting one or more answers from a list or by entering data. The program will ask questions until it has reached a conclusion. The conclusion may be the selection of a single solution or list of possible solutions arranged in order of likelihood. The program can explain, in English, how it arrived at its conclusion and why.
Many companies use expert systems to assist with credit analysis. The benefits of using expert systems for credit analysis are speed and accuracy, both which far exceed human capacity. American Express uses expert systems to process unusual requests. The system, called Authorizer's Assistant, can process requests much quicker than the customer service representatives manually, and has decreased the bad guess rate. The rate was originally 15 percent error, ...

Solution Summary

An accounting information system is dissected.

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See Also This Related BrainMass Solution

Accounting Information System Replacement

A publicly traded company needs to replace its accounting information system (AIS) within the next 18 months. The company has funding and resources to handle the replacement, so cost is not a concern. The company has several choices:

a. Purchase an off-the shelf accounting system from Oracle (PeopleSoft Enterprise Financial Management). Oracle will assist with the installation, configuration, and testing of the solution. Once the system is operational, the company's information systems group will maintain it.

b. Modify the existing AIS application (which is an in-house system developed and maintained by the company's information system group). It will have the same functions and features as the Oracle solution. The information system group will rely on consultants to assist in the development, configuration, and testing of the system. Once the system is operational, the company's information systems group will maintain it.

c. Hire an outside company (Oracle) to handle the installation, configuration, and maintenance of the AIS application (PeopleSoft Enterprise Financial Management). The solution will be outsourced completely. Users will be able to access the system which will be housed at a secured Oracle location. Little to no work will be required by the company's information systems group.

You have been asked by the company's CEO to make a recommendation as to which approach to take. In considering your recommendation, cost is not a concern. For each option, it is anticipated that it will take no more than 15 months to complete the work.

1. Analyze the need for changing to a new system and the potential benefits and risks associated with this change.

2. Identify three (3) advantages and three (3) disadvantages for each of the following choices:

a) Purchase the AIS from Oracle and have it maintained by the company's information systems group;

b) Modify the company's current AIS application and have it maintained by the company's information systems group; and

c) Outsource the AIS to Oracle and have Oracle maintain the system.

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