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End Users End users fall into two general groups: external and internal. External users include creditors, stockholders, potential investors, regulatory agencies, tax authorities, suppliers, and customers. Institutional users such as banks, the SEC, and the Internal Revenue Service (IRS) receive information in the form of financial statements, tax returns, and other reports that the firm has a legal obligation to produce. Trading partners (customers and suppliers) receive transaction-oriented information, including purchase orders, billing statements, and shipping documents.

It is neither economical nor necessary to back up every subsystem. Backup is essential, however, when excessive negative consequences result from a subsystem failure. Hence, virtually every modern automobile has a backup braking system, whereas very few have backup stereo systems. Like automobile designers, information system designers need to identify critical subsystems, anticipate the risk of their failure, and design cost-effective control procedures to mitigate that risk. As we shall see in subsequent chapters, accountants feature prominently in this activity.

PART I Overview of Accounting Information Systems Five AIS models are examined. The final section discusses the role of accountants as users, designers, and auditors of AIS. The Information Environment We begin the study of AIS with the recognition that information is a business resource. Like the other business resources of raw materials, capital, and labor, information is vital to the survival of the contemporary business organization. Every business day, vast quantities of information flow to decision makers and other users to meet a variety of internal needs.

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