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Impact of Information Age
fewer workers are making products, and
a large segment of the employee
population is involved in producing,
analyzing, and distributing information. Knowledge workerscomprise much of
the labor force.
A major contributor to the informationage is the Internet.
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WA! I" A "#"!$%&
A group of interrelated multiple components or subsystems that
serve a common purpose/ goal
Characteristics of a system
Has parts / subsystem that related
Has goal /purpose
There will be input and output
Has an environment that it resides
Has a boundary that separate it from environment and/or other system
There is limit to what it can accomplish A systemis called a subsystem when it is viewed as a component of
a larger system. A subsystemis considered a system when it is the
focus of attention.
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"#"!$% I'!$()A*$
Interface occurs at the connecting pointwhere the boundaries of two systems meet.
Interface acting as connecting point for two
systems, it eases the flow of one systemsoutput into another system.
The designers of a system should plan for
an interface which copes with the waitingperiod between two processes
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+efinition Information "ystem
An Information systemis a set of interrelated
subsystems that work together to collect, process,
store, transform, and distribute information for
planning, decision making, and control.
)irms depend on information systems in order to
stay competitive.
Thus, Information is a business resource that:needs to be appropriately managed
is vital to the survival of contemporary businesses
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!#$" -) "#"!$%
"ystems have been classified in different ways.
*ommon calcification are/
01 hysical or abstract.
21 -pen or closed.
31'atural or man/made informationsystems
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!H"#ICA$ %# AT'ACT
hysical systems tangible entities that may be staticor dynamicin operation.
(g, the physical parts of the computer center are the offices, des)s,and chairs that facilitate operation of the computer *static+. A
programmed computer is a dynamic system. ata, programs,
output, and applications change as the users demands or thepriority of the information re-uested changes
Abstract systems
are conceptual or nonphysical entities.
A model is an easier way for the analyst to visualie relationshipsin the system under study.
The obective is to point out the significant elements and the )eyinterrelationships of a comple0 system.
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1!(2 1' C$1#( #"#T(3#
systems is based on their degree of independence. An open system
has many interfaces with environment.
It receives inputs from and delivers outputs to the outside.
must adapt to the changing demands of the user.
A closed system does not interface with its environment, i.e. it has no input or
output.
more relevant to scientific systems than to social systems.
Completely closed system is very rare. The nearest we can get to aclosed social system would be a completely self4containedcommunity that provides all its own food, materials and power,and that does not trade, communicate or come into contact withother communities.
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*oncept of *losed and open "ystem
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+ataare raw facts about events
that have no organization ormeaning.
Information is data that havebeen processed and is
meaningful and useful to users.
+ata versus Information
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CHA'ACT('I#TIC 15 6#(56$
I251'3ATI12
(elevance It reduces uncertainty by helping you predict what will happen or
confirm what already has happened.
(eliability It4s dependable, i.e., free from error or bias and faithfully portrays
events and activities.
*ompleteness It doesn4t leave out anything that4s important.
!imeliness #ou get it in time to make your decision.
5nderstandability
It4s presented in a manner you can comprehend and use 6erifiability
A consensus notion7 nature of the information is such thatdifferent people would tend to produce the same result
Accessibility
#ou can get to it when you need it and in a format you can use
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AI" A**-5'!I'8 A'+ I"&
Accounting
Information
#ystems
AccountingInformation
#ystems
Accounting isan information system. It identifies, collects, processes, and communicates economic
information about a firm using a wide variety of technologies.
It captures and records the financial effects of the firmstransactions.
It distributes transaction information to operations personnel to
coordinate many )ey tas)s.
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Accounting Information "ystems
An Accounting Information "ystem 9AI"1is the
information subsystem within an organization
that accumulates information from the entity4s
various subsystems and communicates it to theorganization4s information processing subsystem.
)unctions of AI"
!o *ollect and store data on business activities and
transactions in more efficient : effective
!o rovide useful information for decision making
!o provide ade;uate control, data recorded accurately
Well organized business
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An Accounting Information "ystem
Inputs7 ata/Information from
Internal/(0ternal sources
!rocesses7 #ort, 1rganie,
Calculate
1utputs7 Information for Internal/
(0ternal ecision 3a)ers
ata'epository/
5iles,
atabases,
(tc.
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6A
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%I" versus AI"
%anagement Information"ystem9%I"1
Historically, provided financial and nonfinancial
information to internal users.
e.g., trac)ing customer complaints
Accounting Information "ystem
Traditionally provided financial information to
both e0ternal and internal users. 'ow, the two systems overlap and provide much
of the same information focusing on
business processes.
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IS
AIS MIS
GLS/
FRS TPS MRS Finance Marketing Production HRS Logistic
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)inancial Accounting "ystem
!he objective of financial accountingis to provide
relevant information to individuals and groups
outsidean organization4s boundaries.
%ainly to e=ternal users include investors, ta=agencies, and creditors. 'ot forgetting to internal
users.
-bjectives achieved through preparation of
financial statements by using 8AA.
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%anagerial Accounting "ystem
-bjective of %anagerial Accountingis to
provide relevant information to a company4s
managers, who are internal users.
%ain components of managerial accounting
are *ost Accounting, >udgeting, "ystems study
whereby using their own guidelines.
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!(A'"A*!I-' (-*$""I'8 "#"!$%
incorporated into structure of AI#, records every economic event ortransactions.
0.(evenue8transactions of selling goods and services
2.$=penditure/ payments for goods and services received and
procurement system3.roduction4 processing data of manufacturing goods.
?.uman resource management/ recording personnel information
of an organiation such as attendance, award systems and pay
calculation
@. (eporting4 cores the maintenance of general ledger andsubse-uently, production basic report
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AI# *super system+
0. !ransaction processing system'ecord transactions carried out by an organiation and provide
information to personnel at various operational levels.
2. >udgeting system6ses information from the T!# and operational plans of the
organiation to produce control, information which will be used
by the management of an organiation.
3. (esponsibility reporting system#ummaries historical data and provides reports comparing
these data with the budget or target set for managers.
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AI# H($!# ACC162TA2T#9
As 5sersAccountants must be able to clearly convey their needs to
the systems professionals who design the system.
The accountant should actively participate in systems
development proects to ensure appropriate systemsdesign.
As "ystem Auditors
(0ternal Auditors 4 attest to fairness of financial
statements, assurance service7 broader in scope thantraditional attestation audit
IT Auditors 4 evaluate IT, often as part of e0ternal audit
Internal Auditors 4 in4house I# and IT appraisal services
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IS ND DECISION M KING
%arious activities in the decision4ma)ing0. "trategic planning activities*#enior management+
2. %anagement control activities*middle management, sales
manager, production managers+
3. -perational control activities*lower4level management+
Activity levels and decision types
0. "tructured decisions* are repetitive and routine for lowest
management level+
2. 5nstructured decision*are non recurring and non4routine forhigher level management+
3. "emistructured decision*combine the characteristics of both
structured and unstructured decision+
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IS and Value-added activities
@ primary business groups0. Inbound logistics
Involves receiving, storing and distributing materials.
2. -perational activities
Convert the material input into a finished product or service.3. -utbound logistics
Involves distributing finished products or services to customers.
?. %arketing and sales activities
!romote the organiation product s or services.
@. "erviceInvolves the provision of after sales repair and maintenance of
products sold.
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IS and Value-added activities
? support groups of business process0. uman resources
Including of hiring and training employees.
2. rocurement
Including negotiating prices, and ordering and purchasing.3. -rganization infrastructure
:eneral activities such as accounting and legal and finance.
3. !echnology
';, product design, which are aimed at improving products
or services.
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3A
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TR NS CTION
PROCESSING CYCLES
0. (evenue cycle4 deals with the income.2. $=penditure cycle4 deals with the e0penses.
3. *onversion cycle / deal with converting raw
materials into finished products.
?. ayroll cycle4 deal with the human resources.
@. )inancial cycle / deals with the ac-uisition and
use of capital.