The Information System: An Accountant's Perspective Flashcards
What are the four levels of activity in the pyramid representing the business organization?
Top Management, Middle Management, Operations Management, and Operations Personnel.
Information Flows in two directions, this type of flow supports operations-level tasks with highly detailed information about the many business transactions affecting the firm.
Horizontal Flow
Information Flows in two directions, this type of flow distributes information downward from senior managers to junior managers and operations personnel through instructions, quotas, and budgets.
Vertical Flow
What are the two major types of systems?
Natural and Artificial System
What are the elements of a system?
Multiple Components, Relatedness, Subsystems, and Purpose
What are the characteristics of good or useful information?
Relevance, Timeliness, Accuracy, Completeness, and Summarization
What rules govern data collection?
Relevance and Efficiency
What are the levels of data hierarchy?
Data attribute, record, and files.
What are the three fundamental tasks of database management?
Storage, Retrieval, and Deletion
What are the fundamental objectives of all information systems?
I. to support the stewardship function of management
II. to support management decision-making
III. to support the day-to-day operations of the firm.
Name the three most common ways to segment an organization.
Geographic Location, Product Line, and Business Function
What types of tasks become redundant in a distributed data processing system?
Autonomous systems development activities distributed throughout the firm can result in each user area reinventing the wheel.
What are the three general problems associated with data redundancy?
Insertion anomaly, Deletion anomaly, and Updation anomaly
Define the key elements of the REA model.
Resources- assets of an organization
Events- phenomena that affect changes in resources
Agents- individuals and departments that participate in an economic event.
What three roles are played by accountants with respect to the information system?
System users, System Designers, and System Auditors.
This involves specifying the criteria for identifying delinquent customers and the information that needs to be reported. As the domain expert, the accountant determines the nature of the information required, its sources, its destination, and the accounting rules that need to be applied.
Conceptual System
This includes the data storage medium to be used and the method for capturing and presenting the information.
Physical System
These are the personnel inside an organization who helps run its operations and uses the company’s financial information to make decisions. They make use of the financial information to compare past results and help make adjustments for future activities.
Internal Users
These are the people outside of an organization who does not directly run its operations and use the financial information of a specific company to make decisions. They assess their investment decisions by using relevant financial information in a company’s financial statements.
External Users
An event that affects the assets and equities of an organization and is measured by monetary units.
Financial Transaction
These are events that do not meet the definition of financial transactions.
Non-financial Transaction
Performed by more than one large computer house and serves users throughout the organization. All the users of each department functioned well to connect to these central computers through their terminals which are only input and output devices.
Centralized Data Processing
The reorganizing of IT functions into small information processing units that are distributed to users and placed under their control. Each department processes its data on its local servers which can enable sharing of data between all other departments.
Distributed Data Processing
Which of the following is NOT a financial transaction?
a. purchase of products b. cash receipts c. update valid vendor file d. sale of inventory
C
The following are subsystems of the Accounting Information System, EXCEPT
a. Transaction Processing System.
b. Human Resources System.
c. General Ledger/Financial Reporting System.
d. Management Reporting System.
B
Which of the following is NOT a purpose of the Transaction Processing System?
a. managing and reporting on the status of financial investments
b. converting economic events into financial transactions
c. distributing essential information to operations personnel to support their daily operations
d. recording financial transactions in the accounting records
A
The objectives of the data collection activity of the general model for Accounting Information Systems are to collect data that are
a. relevant and redundant.
b. efficient and objective.
c. efficient and redundant.
d. efficient and relevant.
D
Which of the following is NOT a characteristic of effective information? a. relevance b. accuracy c. summarization d. precision
D
Which of the following is NOT a database management task? a. retrieval b. storage c. summarization d. deletion
C
When viewed from the highest to most elemental level, the data hierarchy is
a. attribute, record, file.
b. record, attribute, key.
c. file, record, attribute.
d. file, record, key.
e. key, record, file.
A
Which of the following best describes the activities of the materials management function?
a. purchasing, receiving, and inventory control
b. receiving, sales, distribution, and purchasing
c. receiving, storage, purchasing, and accounts payable
d. purchasing, receiving, and storage
e. purchasing, storage, and distribution
D
Which of the following best describes the activities of the production function?
a. maintenance, inventory control, and production planning b. production planning, quality control, manufacturing, and cost accounting
c. quality control, production planning, manufacturing, and payroll
d. maintenance, production planning, storage, and quality control
e. manufacturing, quality control, and maintenance
E
Which of the following best describes the activities of the accounting function?
a. inventory control, accounts payable, fixed assets, and payroll
b. fixed assets, accounts payable, cash disbursements, and cost accounting
c. purchasing, cash receipts, accounts payable, cash disbursements, and payroll
d. inventory control, cash receipts, accounts payable, cash disbursements, and payroll
e. inventory control, cost accounting, accounts payable, cash disbursements, and payroll
A
This is accountable for the short-term planning and coordination of activities necessary to accomplish organizational objectives
Middle Management
External users fall into two groups
Trading partners and stakeholders
A common purpose relates to the multiple parts of the system. Although each part functions independently of the others, all parts serve a common objective.
Relatedness
Two systems of Information Systems
System Decomposition and Subsystem Interdependence
The process of dividing the system into smaller sub-system parts. This is a convenient way of representing, viewing, and understanding the relationships among subsystems.
System 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
Classes of Systems emerge from the decomposition
Accounting Information System (AIS)
Management Information System (MIS)
Process financial transactions and nonfinancial transactions that directly affect the processing of financial transactions.
AIS Subsytems
AIS is composed of three major subsystems
Transaction Processing System (TPS)
General Ledger/Financial Reporting System (GL/FRS)
Management Reporting System (MRS)
Supports daily business operations with numerous reports, documents, and messages for users throughout the organization
Transaction Processing System
This 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)
This 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
Elements of General Models
End Users, Data Sources, Data Collection, Data Processing, Database Management, Information Generation, and Feedback
These are facts, which may or may not be processed (edited, summarized, or refined) and have no direct effect on the user.
Data
This causes the user to take an action that he or she otherwise could not, or would not, have taken. This is often defined simply as processed data.
Information
These are financial transactions that enter the information system from both internal and external sources.
Data Sources
This is the first operational stage in the information system. The objective is to ensure that event data entering the system are valid, complete, and free from material errors.
Data Collection
Once collected, data requires a process to produce information. This stage range from simple to complex.
Data Processing
This is the physical repository for financial and nonfinancial data
Database
The most elemental piece of potentially useful data in the database. An attribute is a logical and relevant characteristic of an entity about which the firm captures data
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
Characteristics of a useful information
Relevance, Timeliness, Accuracy, Completeness, and Summarization
A form of output that is sent back to the system as a source of data.
Feedback
Three basic types of commercial software
Turnkey Systems, Backbone Systems, Vendor-supported Systems
A completely finished and tested system that are ready for implementation. Typically, they are general-purpose systems or systems customized to a specific industry.
Turnkey System
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.
Backbone System
This is a custom (or customized) system that client organizations purchase commercially rather than develop in-house.
Vendor-supported Systems
Three subfunctions of Materials Management
Purchasing, Receiving, and Stores
Two classes of Production
Primary Manufacturing Activities- shape and assemble raw materials into finished goods
Production Support Activities- ensure that primary manufacturing activities operates efficiently and effectively
Production Functions
Manufacturing and Support
Marketing Support
Promotion, Advertising, Market Research, and Sales
Distribution Functions
Warehousing and Shipping
Personnel Functions
Recruiting, Training, Benefits, and Counseling
Finance Functions
Portfolio Management, Treasury, Credit, Cash Disbursements, and Cash Receipts
Accounting Function
Inventory Control, Cost Accounting, Payroll, Accounts Payable, Accounts Receivable, Billing, Fixed Assets, and General Ledger
IT Services Functions
Data Processing, Systems Development and Maintenance, and Database Administration
