Chapter 1 Flashcards
two or more interrelated components that interact to achieve a goal, often composed of subsystems that support the larger system
system
when a subsystem’s goals are inconsistent with the goals of another subsystem or the system as a whole
goal conflict
when a subsystem achieves its goals while contributing to the organization’s overall goal
goal congruence
facts that are collected, recorded, stored, and processed by a system
data
data that have been organized and processed to provide meaning and improve decision making
information
exceeding the amount of information a human mind can absorb and process, resulting in a decline in decision making quality and an increase in the cost of providing information
information overload
the computers and other electronic devices used to store, retrieve, transmit and manipulate data.
information technology (IT)
the benefit provided by information less the cost of producing it
value of information
seven characteristics that make information useful
- Relevant
- Reliable
- Complete
- Timely
- Understandable
- Verifiable
- Accessible
reduces uncertainty, improves decision asking or confirms or corrects prior expectations
Relevant information
free from error or bias; accurately represents organization events or activities
Reliable information
Does not omit important aspects of the events or activities it measures
Complete information
Provided in time for decision makers to make decisions
Timely information
Presented in a useful and intelligible format.
Understandable information
Two independent, knowledgeable people produce the same information
Verifiability
Available to users when they need it and in a format they can use
Accessible Information
a set of relate, coordinated, and structured activities and tasks that are performed by a person, a computer, or a machine that help accomplish a specific organizational goal
business process
an agreement between two entities to exchange goods or services, such as selling inventory in exchange for cash; any other event that can be measured in economic terms by an organization
transaction
process of capturing transaction data, processing it, storing it for later use, and producing information output, such as a managerial report or a financial statement
transaction processing
transactions that happen a great many times, such as giving up cash to get inventory from a supplier and giving employees a paycheck in exchange for their labor.
give-get exchange.
the major get-give exchanges that occur frequently in most companies
business processes or exchange cycles
activities associated with selling goods and services in exchange for cash or a future promise to receive cash
revenue cycle
activities associated wit purchasing inventory for resale or raw materials in exchange for cash or a future promise to pay cash.
expenditure cycle
activities associated with using labor, raw materials and equipment to produce finished goods
production or conversion cycle
activities associated with hiring, training, compensating, evaluating, promoting, and terminating employees
human resources/payroll cycle
activities associated with raising money by selling shares in the company to investors and borrowing money as well as paying dividends and interest
financing cycle
information processing operations involved in pdating the general ledger and preparing reports for both management and external parties
general ledger and reporting system.
a system that collects, records, stores, and processes data to produce information for decision makers. It includes people, procedures and instructions, data, software, information technology infrastructure, and internal controls and security measures.
accounting information systems
Six components of an AIS
- The People who use the system
- the Procedures and Instructions used to collect, process, and store data
- the Data about the organization and its business activities
- the Software used to process the data
- The Information Technology Infrastructure, including computers, peripheral devices, and network communications devices used in AIS
- the Internal Controls and Security Measures that safe guard AIS data
Those 6 components of AIS enable three important business functions
- Collect and store data about organizational activities, resources and personnel
- Transform data into information so management can plan, execute, control and evaluate number 1.
- Provide adequate controls to safeguard the organization’s assets and data.
six ways AIS adds value to an organization
- Improves quality and reduces costs of products and services
- Improves efficiency
- Shares knowledgable
- Improves the efficiency and effectiveness of its supply chain
- Improves internal control structure
- Improves decision making
the use of data warehouses and complex algorithms to forecast future events, based on historical trends and calculated probabilities.
predictive analysis
linking together of all the primary and support activities in a business. Value is added as a product passes through the chain
value chain
value chain activities that produce, market, and deliver products and services to customers and provide post delivery service and support.
primary activities
value chain activities such as firm infrastructure, technology, purchasing, and human resources that enable primary activities to be performed efficiently and effectively.
support activities
and extended system that includes an organization’s value chain as well as its suppliers, distributors, and customer.s
supply chain
