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...These decisions require dynamic descriptions the consequences of alternative future courses of actions and the resulting events. Therefore, a new object-oriented model is presented that enables the use of ex ante accounting data for this purpose. In comparison to the REA model, the object-oriented model presented in this paper includes new static aspects as "recipes," "potential contracts," and "reservations," together with behavioral aspects expressed as theoretical scripts for the retrieval of relevant accounting data.
Keywords: object-oriented modeling; REA; operations management; management accounting; information systems; decision support systems.
I. INTRODUCTION
The purpose of this paper is to present an object-oriented model to record and use (management) accounting data for operations management decisions support in information systems. Zimmerman (1997) indicates that a management accounting system has two purposes: (1) to provide some of the knowledge necessary for planning and decision making, and (2) to help motivate and monitor people in organizations. This paper focuses on the provision of knowledge for planning and decision making.' This knowledge typically consists of accounting information relating to specific operations management decision alternatives. Since these alternatives relate to future events, the accounting data that will form the accounting information is denoted as ex ante accounting data (and the accounting information as ex ante accounting information). Operations management is defined as "the design, operation, and improvement of production systems that create the firm's primary products or services" (Chase and Aquilano 1995). Within operat ions management, decisions must be made at multiple levels, ranging from, for example, operational decisions about hourly schedules of jobs in a work center, via monthly decisions about aggregated master sales and production plans, to strategic decisions concerning production capacity, and other technological decisions involved in engineering a new production plant.
The decisions that are considered in this paper are primarily in the environment of firms manufacturing standardized products. Moreover, the scope is limited to medium- and short-term decisions with a maximum time horizon of one year. These types of decisions have to be made frequently, and are mostly standardized. Standardized decisions are decisions where the alternatives of the problem are known, but uncertainty exists concerning the extent to which the alternatives contribute to organizational objectives. Examples of these objectives are product quality, service levels, and profitability. The frequency of the decision making makes it worthwhile to use information systems to calculate the extent to which different courses of action contribute to the specific objectives. Longer-term decisions usually do not comply with the conditions regarding frequency and standardization. For these reasons, most of the present operations management information systems--the so-called Enterprise Resource Planning (ERP) sys tems--aim at short-term and medium-term decision making.
This paper presents an accounting model, based on the object-oriented paradigm, aimed at recording ex ante accounting information to support operations management decisions. Present information systems, specifically ERP systems, are unable to provide operations management with all relevant accounting information necessary for decision making for two reasons (Verdaasdonk 1999). The first reason relates to difficulties in incorporating relevant cost information into present-day accounting systems. Relevant costs are difficult to quantify and record in information systems ex ante, since the relevancy of costs depends on the type of decision and the current state of the organization. A simple declaration of a cost type as "variable" or "fixed (sunk)" is therefore insufficient. Costs that are variable for one decision alternative can prove to be sunk for another. Ultimately, conditions declared in contracts determine whether costs can vary between decision alternatives. The application of these conditions depends on the organization's immediate circumstances. The second reason relates to the accounting data recording techniques. Present dominant recording techniques (double entry accounting, REA model, and "Grundrechnung") do not incorporate the knowledge to deal with ex ante accounting events. These techniques only aim at the static description of past occurrences, whereas operations management decision support requires a dynamic description of possible future events. This is not a criticism of any technique, since they are not designed for the specific use described in this paper. These techniques are mainly designed for recording accounting information ex post, whereas the user domain considered in this paper requires ex ante accounting information for future events (decision making).
II. BACKGROUND
Research into structuring accounting data has been led by two research "schools": an American school and a German school. A point of disagreement between these schools was that the dominant accounting recording technique, i.e., double entry accounting, limited the use of accounting data for a broad spectrum of management issues. Therefore, their research efforts resulted in the design of data-structures that are able to support this broader spectrum. Although Riebel (1994) refers to these data structures as purpose neutral, they are better described as multi-purpose.
The "product" of the American school is the Resource-Event-Agent (REA) model (McCarthy 1979, 1982; Geerts and McCarthy 2000). McCarthy demonstrated that by capturing the essential characteristics of an economic event, multiple classification schemes could be supported, while still providing the ability to generate traditional financial statements that adhere to Generally Accepted Accounting Principles (GAAP). Recording of accounting events is essentially decoupled from the uses of the accounting data in applications. For instance, the data captured in an REA model can be used to support an Activity-Based Costing application. Furthermore, the REA model integrates accounting and nonaccounting data. In this way, it can be seen as a blueprint for the recording of data in ERP systems.
The "product" of the German school is called "Grundrechnung." (2) The Grundrechnung was developed independently by two researchers, around the same time, in the late 1930s/early 1940s. In Germany this model was developed by Schmalenbach (1948, 1956) and was called Grundrechnung. In the United States, the model was developed by Goetz (1939, 1949) and was called "Basic Pecuniary Record." The method was further developed by Riebel (1994). Like the REA model, the Grundrechnung is also a semantic model. However, in contrast with the REA model, the Grundrechnung does not provide an Entity-Relationship diagram based convention for expressing the relevant entities and their relationships. Instead, the Grundrechnung consists of four basic principles in recording accounting data: (1) no heterogeneous classification or summarizing of elements that are needed separately for applications, (2) no arbitrary division and allocation of accounting data, (3) recording an entry at the lowest level possible in the hierarchy witho ut introducing arbitrary allocations, and (4) characterization with all attributes of interest and importance. Like the REA model, a key point in the Grundrechnung model is the strict separation of application and recording. The Grundrechnung has found its use in providing specific accounting data for an advanced performance measurement technique called "Einzelkosten- und Deckungsbeitragsrechnung." (3) The Grundrechnung does not address issues from the financial accounting domain. Therefore, the Grundrechnung does not intend to replace the general ledger.
Sinzig (1983, 1994) uses the Grundrechnung as a central concept for data recording to develop a relational database model...
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