CHAPTER 1 Flashcards
a group of two or more interrelated components or subsystems that serve a common purpose
system
A system must contain more than one part.
MULTIPLE COMPONENTS
A common purpose relates the multiple parts of the system
RELATEDNESS
. The distinction between the terms system and subsystem is a matter of perspective.
SYSTEM VERSUS SUBSYSTEM
A system must serve at least one purpose, but it may serve several.
PURPOSE
the process of dividing the system into smaller subsystem parts.
Decomposition
A system’s ability to achieve its goal depends on the effective functioning and harmonious interaction of its subsystems
SUBSYSTEM INTERDEPENDENCY
the set of formal procedures by which data are collected, processed into information, and distributed to users.
information system
the set of formal procedures by which data are collected, processed into information, and distributed to users.
information system
an event that affects or is of interest to the organization and is processed by its information system as a unit of work
transaction
an economic event that affects the assets and equities of the organization,
is reflected in its accounts, and is measured in monetary terms.
financial transaction
events that do not meet the narrow definition of a financial transaction
Nonfinancial transactions
supports daily business operations with numerous reports, documents, and messages for users throughout the organization
transaction processing system (TPS)
produces the traditional financial statements, such as the income statement, balance sheet, statement of cash flows, tax returns, and other reports required by law
general ledger/financial reporting system (GL/FRS)
provides internal management with special-purpose financial reports and information needed for decision
making such as budgets, variance reports, and responsibility reports.
management reporting system (MRS),
processes nonfinancial transactions that are not normally processed by
traditional AIS.
management information system (MIS)
facts, which may or may
not be processed (edited, summarized, or refined) and have no direct effect on the user.
Data
causes the user to take an action that he or she otherwise could not, or would not, have taken.
information
financial transactions that enter the information system from both internal and external sources.
Data sources
the first operational stage in the information system
Data collection
Once collected, data usually require processing to produce information.
Data Processing
physical repository for financial and nonfinancial data
database
the most elemental piece of potentially useful data in the database
data attribute
a complete set of attributes for a single occurrence within an entity class.
record
a complete set of records of an identical class.
file
the process of compiling, arranging, formatting, and presenting information to
users.
Information generation
The contents of a report or document must serve a purpose.
RELEVANCE
The age of information is a critical factor in determining its usefulness
TIMELINESS
Information must be free from material errors
ACCURACY
No piece of information essential to a decision or task should be missing
COMPLETENESS
Information should be aggregated in accordance with the user’s needs
SUMMARIZATION
a form of output that is sent back to the system as a source of data
Feedback
completely finished and tested systems that are ready for implementation
Turnkey systems
consist of a basic system structure on which to build.
Backbone systems
are custom (or customized) systems that client organizations purchase
commercially rather than develop in-house.
Vendor-supported systems
Business organizations consist of functional units or
segments.
to plan and control the materials inventory of the company.
Materials Management
responsible for ordering inventory from vendors when inventory levels fall to their
reorder points.
Purchasing
the task of accepting the inventory previously ordered by purchasing
Receiving
takes physical custody of the inventory received and releases these resources into the production process as needed.
Stores
occur in the conversion cycle in which raw materials, labor, and plant assets are used
to create finished products
Production activities
involves scheduling the flow of materials, labor, and machinery to efficiently
meet production needs.
Production planning
monitors the manufacturing process at various points to ensure that the finished
products meet the firm’s quality standards
Quality control
keeps the firm’s machinery and other manufacturing facilities in running order
Maintenance
deals with the strategic problems of product promotion, advertising, and market research.
marketing function
the activity of getting the product to the customer after the sale
Distribution
to effectively manage this resource
Personnel
manages the financial resources of the firm through banking and treasury activities,
portfolio management, credit evaluation, cash disbursements, and cash receipts
Finance
The value of information to a user is determined by its
reliability
all data processing is performed by one or more large computers housed at a central site that serve users throughout the organization
Centralized Data Processing
Centrally organized companies maintain their data resources in a central location that is shared by all end users.
DATABASE ADMINISTRATION.
manages the computer resources used to perform the day-to-day processing of transactions
DATA PROCESSING
responsible for analyzing user needs and for designing new systems to satisfy those needs.
SYSTEMS DEVELOPMENT AND MAINTENANCE
responsible for analyzing user needs and for designing new systems to satisfy those needs.
SYSTEMS DEVELOPMENT AND MAINTENANCE
include systems analysts, database designers, and programmers who design and build the system.
Systems professionals
those for whom the system is built.
End users
individuals inside or outside the firm who have an interest in the system but are not
end users
Stakeholders
involves reorganizing the IT function into small information processing units (IPUs) that are distributed to end users and placed under their control.
distributed data processing (DDP).
the oldest and most traditional form of accounting systems
manual process model
describes an environment in which individual data files are not related to other
files.
flat-file model
An efficient information system captures and stores data only once and makes this single source available
to all users who need it.
Data Storage
Organizations have a great deal of data stored in files that require periodic updating to reflect changes.
Data Updating
In contrast to the problem of performing multiple updates is the problem of failing to update all the user
files affected by a change in status
Currency of Information
The user’s information set is constrained by the data that he or she possesses and controls.
Task-Data Dependency
a special software system that is programmed to know which data elements each user is authorized to access.
database management system (DBMS)
means that the organization’s information systems applications (its programs) function independently of each other rather than as an integrated whole.
traditional
an accounting framework for modeling an organization’s critical resources, events, and agents and the relationships between them
REA
the assets of the organization
resources
phenomena that affect changes in resources
events
are individuals and departments that participate in an economic event.
agents
an information system model that enables an organization to automate and integrate its key business processes
Enterprise resource planning (ERP)
involves specifying the criteria for identifying delinquent customers and the information that needs to be reported
conceptual system
accountants must provide
a clear picture of their needs to the professionals who design their systems.
ACCOUNTANTS AS USERS
An appreciation of the accountant’s responsibility for system design requires a historic perspective that
predates the computer as a business information tool.
ACCOUNTANTS AS SYSTEM DESIGNERS
the medium and method for capturing and presenting the information
physical system
a form of independent attestation performed by an expert who expresses an
opinion about the fairness of a company’s financial statements
Auditing
are professional services, including the attest function, that are
designed to improve the quality of information, both financial and nonfinancial, used by decision makers
Assurance services
is usually performed as part of a broader financial audit.
IT auditing
an appraisal function housed within the organization
Internal auditing
