Class 1 Flashcards
What is the difference between data and information?
Data is raw (you have to labour to make interpretation)
Information is readily usable
What is an information system?
Several components working together for one common purpose
What are the components of Accounting Information Systems (AIS) in order of importance?
- People
- Procedures
- Data
- Software
- IT infrastructure
- (controls?)
What is the difference between policies and procedures?
Policies - come from top management and are universal, binding, and difficult to change
Procedures - adopted or written by middle managers and can be changed more easily
Note: practices are cultural and are the easiest to change
What is an Accounting Information System (AIS)?
A system that records, processes and reports on transactions to provide financial and non-financial information to make decisions and have appropriate levels of internal controls for those transactions
What are the attributes of useful information?
- Relevance - information must be capable of making a difference in a decision
- predictive value, feedback value and timely - Reliability - information must be free from bias and error
- verifiable, representational faithfulness and neutrality
What does the big data phenomenon refer to?
It refers to the fact that companies don’t know how to make value out of all the data they capture (information overload)
What is the difference between discretionary vs mandatory information?
Discretionary information - not required by law
ex. using an ABC system to determine overhead costs
Mandatory information - required by law
ex. annual reports, financial statements, tax returns
How to managers decide whether to produce discretionary information?
They must decide if the benefits of using discretionary information outweigh the costs of obtaining it
List and explain the 4 types of databases
- Flat file (excel spreadsheet)
- primitive database that can sort, filter and highlight info
- A lot of people use this - Hierarchical (webpages)
- Relational (Access creates these)
- Object-oriented
- allows you to use previously written applications, documents, etc.
What is the main problem with traditional information systems?
They operate in silos - you cannot send and merge information
How is an ERP different from traditional Accounting Software (IS)?
Automation
and
Integration (through POS machines)
What is an ERP system?
ERP stands for Enterprise Resource Planning
- It provides a smooth and seamless flow of information across an organization through the standardized environment with shared database and integrated applications that support communication
- Data remain independent of any specific application since extensive data sharing occurs through application-sensitive views that present data to meet user needs
- Requires you to buy all applications from one vendor. In contrast there is “best of breed” applications which is less common now that there aren’t as many competitors in the industry
- May require companies to change their business model if the ERP system cannot be changed to reflect their process (or they can keep some fragments of their legacy systems)
Why do tasks need to be carried out very carefully in ERP systems?
To make sure that thousands of records are not impacted by an error
What is data warehousing?
The process of extracting, converting and standardizing data from ERP legacy systems and loading it into a central archive (know as the data warehouse)
Loaded data are accessible via various queries and analysis tools used for data mining
Involves sophisticated techniques that use database queries and AI to model real-world phenomena
Most large ERP implementations include separate operational and data warehouse databases
