System – a set of two or more interrelated components that interact to achieve a goal
Goal conflict – occurs when a subsystem is inconsistent with the goals of another subsystem or with the system as a whole
Goal congruence – occurs when a subsystem achieves its goals while contributing to the organization’s overall goal
Integration – when files are logically combined and made accessible to various systems.
Data – are facts that are collected, recorded, stored, and processed by an information system
Information – is data that have been organized and processed to provide meaning and improve the decision-making process.
Characteristics of useful information – relevant, reliable, complete, timely, understandable, verifiable, and accessible
Transactions – is an agreement between two entities to exchange goods or services or any other event that can be measured in economic terms by an organization.
Transaction processing - the process that begins with capturing transaction data and ends with informational output, such as financial statements
Basic business/transaction cycles – when business is conducted and cash is exchanged. Revenue cycle – where goods and services are sold for cash or a future promise to receive cash. Expenditure cycle – where companies purchase inventory for resale or raw materials to use in producing products in exchange for cash or a future promise to pay cash. Production or conversion cycle – where raw materials are transformed into finished goods. Human resources/payroll cycle – where employees are hired, trained, compensated, evaluated, promoted, and terminated. Financing cycle – Where companies sell shares in the company to investors and borrow money and where investors are paid dividends and interest is paid on loans.
Give-get exchanges – business activated where a cycle feeds off each other. Many business activities are pairs of events involved. Most organizations engage in a small number of give-get exchanges, but each type of exchange happens many times.
Accounting Information system – a system that collects, records, and processes data to produce information for decision makers. AIS components include: people, procedures and instructions, data, software, information technology infrastructure, and internal controls and security measures.
Components of an AIS
Four components of Data Processing Cycle (Data Input, Data Storage, Data Processing Information Output) Data Input – captures transaction data and enter them into the system. Usually triggered by a business activity. Data must be collected about three facets of each business activity: 1. Each activity of interest 2. The resource(s) affected by each activity 3. The people who participate in each activity.
Data Storage – stored in general ledger – contains summary-level data for every asset, liability, equity, revenue, and expense account. Subsidiary ledger – contains detailed data for any general ledger account with many individual subaccounts. Chart of accounts – list of the numbers assigned to each general ledger account.
Data processing – Creating, Reading, Updating, Deleting data.
Basic concepts of ERP systems – collects, processes, and stores data and provides the information managers and external parties need to assess the company. It overcome problems as they integrate all aspects of a company’s operations with a traditional AIS
Advantages and disadvantages of ERP systems – ADVANTAGE – integrated and single view of the organization’s data and financial situation, data input is captured or keyed once, management gains greater visibility, organization gains better control, procedures and reports are standardized across business units, customer service is improved. DISADVANTAGE – cost, amount of time required, changes to business processes, and complexity.
Documentation – the narratives, flowcharts, diagrams, and other written materials that explain