Chapter 1: Introduction to AIS

Question 1

Draw the internal and external information flows. (triangle)

Question 2

This is used primarily at the operations level to capture transaction and operations data.

Answer 2

Horizontal flows of information

Question 3

This includes the downward flows (the interactions, quotas, and budgets) and the upward flows (aggregated transaction and operations data).

Answer 3

Vertical flows of information

Question 4

This is the set of formal procedures btw which data are collected, processed into information, and distributed to users.

Answer 4

Information System

Question 5

This is an event that affects or is of interest to the organization and is processed by its information system as a unit of work.

Answer 5

Transaction

Question 6

These are economic events that affect the assets and equities of the organization.

Answer 6

Financial transactions

Question 7

These are all other events processed by the organization’s information system.

Answer 7

Nonfinancial transactions

Question 8

This identifies, collects, processes, and communicates economic information about a firm using a wide variety of technologies.

Answer 8

Accounting Information System,

Question 9

What is accounting?

Question 10

Differentiate AIS from MIS

Answer 10

AIS includes financial transactions and non financial transactions.

MIS includes nonfinancial transactions only.

Question 11

What are the subsystems of AIS?

Answer 11

1. Transaction processing system
2. General Ledger/Financial reporting system
3. Management reporting system,

Question 12

This AIS subsystem supports daily business operations. It is central to the overall function of the information system by converting economic events into financial transactions.

Answer 12

Transaction processing system

Question 13

This AIS subsystem produces financial statements and reports.

Answer 13

General ledger/Financial reporting system

Question 14

This AIS subsystem produces special-purpose reports for internal use. It provides the internal financial information needed to manage a business.

Answer 14

Management reporting system

Question 15

These are financial transactions that enter the information system from internal and external sources.

Answer 15

Data sources

Question 16

These are the most common source of data for most organizations.

Answer 16

External financial transactions

Question 17

These involve the exchange or movement of resources within the organization.

Answer 17

Internal financial transactions

Question 18

What are the functions for transforming data into information according to the general AIS model?

Answer 18

Data collection
Data processing
Data management
Information generation

Question 19

This includes capturing transaction data, recording data onto forms, and validating and editing the data.

Answer 19

Data collection

Question 20

This includes classifying, merging, transcribing, calculating, summarizing, comparing, and sorting data.

Answer 20

Data processing

Question 21

This includes storing, retrieving and deleting data.

Answer 21

Data management

Question 22

This includes compiling, arranging, formatting, and presenting data or information.

Answer 22

Information generation

Question 23

What are the characteristics of useful information? (RACTS)

Answer 23

Relevance
Accuracy
Completeness
Timeliness
Summarization

Question 24

This means aggregated in accordance with the user’s needs.

Answer 24

Summarization

Question 25

This means serving a purpose.

Answer 25

Relevance

Question 26

This means no older than the time period of the action it supports.

Answer 26

Timeliness

Question 27

This means free from material errors.

Answer 27

Accuracy

Question 28

This is all information essential to a decision or task is present.

Answer 28

Completeness

Question 29

This means the structure of an organization helps to allocate responsibility, authority, and accountability.

Answer 29

Organizational structure

Question 30

This is a common method organizing in a business function.

Answer 30

Segmenting

Question 31

This means that accounting activities must be separate and independent of the functional areas maintaining resources.

Answer 31

Accounting independence

Question 32

This involves specifying the criteria for identifying delinquent customers and the information that needs to be reported.

Answer 32

Conceptual system

Question 33

Who are accountant as system auditors? (FIE)

Answer 33

Fraud audit Internal audit External audit

Question 34

This is an independent attestation regarding the fairness of the presentation of financial statements.

Answer 34

External audit

Question 35

This is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization.

Answer 35

Internal audit

Question 36

This investigates anomalies and gather evidence of fraud that may lead to criminal conviction.

Answer 36

Fraud audit

Question 37

Differentiate data from information.

Answer 37

Data are facts, which may or may not be processed and have no direct effect on the user. Information is processed data. It is determined by the effect that it has on the user, not by its physical form.

Question 38

This is the most elemental piece of potentially useful data in the database.

Answer 38

Data attribute

Question 39

This is a complete set of attributes for a single occurrence within an entity class.

Answer 39

Record

Question 40

This is a complete set of records of an identical class.

Answer 40

Files

Question 41

This is the task of permanently removing obsolete or redundant records from the database.

Answer 41

Deletion

Question 42

This is the task of locating and extracting an existing record from the database for processing.

Answer 42

Retrieval

Question 43

This stores keys in their proper location in the database.

Answer 43

Storage

Question 44

This is a form of output that is sent back to the system as a source of data.

Answer 44

Feedback

Question 45

These systems are completely finished and tested systems that are ready for implementation. Typically, they are general-purpose systems or systems customized to a specific industry

Answer 45

Turnkey systems

Question 46

This consist of a basic system structure on which to build. The primary processing logic is preprogrammed, and the vendor then designs the user interfaces to suit the client’s unique needs. It is a compromise between a custom system and a turnkey system.

Answer 46

Backbone systems

Question 47

These are custom (or customized) systems that client organizations purchase commercially rather than develop in-house. Under this approach, the software vendor designs, implements, and maintains the system for its client.

Answer 47

Vendor-supported systems

Question 48

This plans and controls the materials inventory of the company.

Answer 48

Materials Management

Question 49

These occur in the conversion cycle in which raw materials, labor, and plant assets are used to create finished products.

Answer 49

Production activities

Question 50

This involves scheduling the flow of materials, labor, and machinery to efficiently meet production needs.

Answer 50

Production planning

Question 51

This monitors the manufacturing process at various points to ensure that the finished products meet the firm’s quality standards.

Answer 51

Quality control

Question 52

This keeps the firm’s machinery and other manufacturing facilities in running order.

Answer 52

Maintenance

Question 53

This deals with the strategic problems of product promotion, advertising, and market research.

Answer 53

Marketing

Question 54

This is the activity of getting the product to the customer after the sale.

Answer 54

Distribution

Question 55

This manages the financial resources of the firm through banking and treasury activities, portfolio management, credit evaluation, cash disbursements, and cash receipts.

Answer 55

Finance

Question 56

This manages the financial information resource of the firm.

Answer 56

Accoutning

Question 57

In this model, all data processing is performed by one or more large computers housed at a central site that serve users throughout the organization.

Answer 57

Centralized data processing

Question 58

This model involves reorganizing the IT function into small in processing units (IPUs) that are distributed to end users and placed under their control.

Answer 58

Distributed data processing

Question 59

This model describes an environment in which individual data files are not related to other files. End users in this environment own their data files rather than share them with other users. Thus, stand-alone applications rather than integrated systems perform data processing.

Answer 59

Flat-file model

Question 60

This is the user’s inability to obtain additional information as his or her needs change.

Answer 60

Task-data dependency

Question 61

This is a special software system that is programmed to know which data elements each user is authorized to access.

Answer 61

Database model

Question 62

This is an accounting framework for modeling an organization’s critical resources, events, and agents and the relationships between them.

Answer 62

REA model

Question 63

These are assets of the organizations. They are defined as objects that are both scarce and under the control of the enterprise.

Answer 63

Resources

Question 64

These are individuals and departments that participate in an economic event.

Answer 64

Agents

Question 65

This is an information system model that enables an organization to automate and integrate its key business processes.

Answer 65

Enterprise resource planning

Question 66

What are the challenges in implementing AIS?

Answer 66

1. Cost and complexity 2. Data security 3. User resistance

Question 67

What are the benefits of AIS?

Answer 67

1. Cost effective 2. Data security 3. User-friendly

Question 68

What are the characteristics of good AIS?

Answer 68

Relevant Reliable Complete Timely Understandable Verifiable Accessible