Question

One of the real word examples in chapter 1 discussed a recent trend in the fast food restaurant industry where remote order-taking is completed at a drive-through window. In the case of McDonald’s, an experimental order-taking center takes drive-through orders for several different McDonald’s locations.

Describe how this real world example relates to each of the components of an accounting information system.

(Keep the answer as simple as possible.)

Answer 1

There are six components of an Accounting Information System (AIS):

1. People

2. Procedure and Instructions

3. Data

4. Software

5. Information technology infrastructure

6. Internal Controls

Talking about the case of Mc- Donald's where an experimental order-taking center takes drive-through orders for several different McDonald’s locations, the above principles will be practicalized as follows:

(a) People: The staff personnel that is operating the sytems where in they feed the order and send it to the nearest Mcdonal's center for the order to be fulfilled explains the first component of AIS. The people also include the staff that is present at the Mcdonald's center and which prepares and completes the order to be delivered.

(b) Procedure and Instructions: The instructions given by the staff that is responsible for taking the ordered to be delivered as take-away for the different locations explains the second component of AIS. These might include some special and customised instructions for each order placed as is provided by the customer. The procedure includes the procedure followed by Mcdonald's to complete an order, which includes the placing of an order, then the instructions being passed on to the outlet through the internal software and then the time actually taken by the outlet to prepare the order and finally the delivery of the order as take away to the customer.

(c) Data: Data constitutes the information transferred to the outlets by the central information system through the internal software. it also constitutes the financial numbers of each outlets which includes the sales made and hence the profit after deducting the cost.It includes keeping the books for sales orders, customer billing statements, sales analysis reports, purchase requisitions, vendor invoices, check registers, general ledger, inventory data, payroll information, timekeeping, tax information, etc.This might help in appraisals and to identify where the company needs to make the required changes for better performance.

(d) Software: Software is the internal system on which the various order details including the quantity of each item being ordered with the customized instructions is being transferred.

(e) Information technology infrastructure: The IT infrastructure is the sytems set up in place by the company to ensure the correct quantity, correct items, correct serial number given to each order which is linked to each customer and timely delivery is made for each order. It also ensures the quality as there is a system of feedback that the customer can provide so that the complaints can be registered against service, quality of food and others.

(f) Internal Controls: An AIS must have internal controls to protect against unauthorized computer access and to limit access to authorized users which includes some users inside the company. It must also prevent unauthorized file access by individuals who are allowed to access only select parts of the system. In case of Mcdonald's, the internal controls are kept in place to ensure that the quality of service, food and other aspects are not compromised in orivding timely and accurate service to the customer and the customer satisfaction rate is high. It is also there to ensure that the employees do not indulge in activties such as embezzlement of cash or food and other frauds which might end up providing the company huge losses.