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What is a System?

A system is a set of interdependent elements that together accomplish specific objectives.

What are four things that a system must have?

A system must have organization, interrelationships, integration, and central objectives.

What is a subsystem?

A subsystem is a part of a system.

What can subsystems be divided into?

Subsystems, within limits, can be further divided into IT component parts or subsystems.

What is an information system (IS), or Management information system (MIS)?

An information system (IS) or management information system (MIS) is a man-made system that generally consists of an integrated set of computer-based and manual components established to collect, store, and manage data to provide output information to users.

What is data?

Data is facts or figures in raw form.

What does data represent?

Data represents the measurement of observations of objects and events.

What is data useful for?

For data to be useful to a decision maker, it must be transformed into information.

What is information?

Information is data presented in a form that is useful in a decision-making process.

How is information valuable to the decision maker?

Information is valuable to the decision maker because it reduces uncertainty and increases knowledge about a particular area of concern.

What is an Accounting Information System (AIS)?

An Accounting Information System (AIS) is a specialized subsystem of the IS that collects, processes, and reports information related to the financial aspects of business events.

How does an accounting information system work with an information system?

An accounting information system is often integrated and indistinguishable from the overall information system.

How is an accounting information system organized?

An accounting information system is divided into components based on the operational functions supported.

What are components of an accounting information system called?

Components of an accounting information system are called AIS subsystems.

What is an information process?

An information process collects, stores, and manages data and provides output information to users.

What is an operations process?

An operations process is a system consisting of the people, equipment, organization, policies, and procedures whose objective is to accomplish the work of the organization.

What is a management process?

A management process is a system consisting of the people, authority, organization, policies, and procedures whose objective is to plan and control the operation of the organization.

What is intelligence?

Intelligence is searching the environment for conditions calling for a decision (do we need a decision?).

What is design?

Design is inventing, developing, and analyzing possible courses of action (what options do we have here?).

What is choice?

Choice is selecting a course of action.

What is a structured decision?

A structured decision is one in which all three decision phases (intelligence, design, and choice) are relatively routine or repetitive.

What happens if a decision is extremely routine?

Extremely routine decisions are those that a computer can be programmed to make, such as payroll.

What is an unstructured decision?

An unstructured decision is one in which none of the decision phases (intelligence, design, or choice) are routine or repetitive.

What is an example of an unstructured decision?

An example of an unstructured decision is a major decision, such as acquiring a new company.

Why do we need to know accounting information systems?

We need to know about accounting information systems to apply what we learn to business scenarios, understand concepts beyond individual transactions and the whole system, design and execute accounting systems, and help employers design or revise their accounting systems.

What is an enterprise system (enterprise-wide information system or enterprise information system)?

An enterprise system integrates and automates business process functionality and information from all of an organization's functional areas.

What is an enterprise resource planning (ERP) system?

An enterprise resource planning (ERP) system consists of software packages that can be used for the core systems necessary to support enterprise systems.

What can be added to a corporation's current ERP system?

Third-party modules can be added to a corporation's current ERP system.

What is customer relationship management (CRM) software?

Customer relationship management (CRM) software builds and maintains customer-related databases.

What is customer self-service (CSS) software?

Customer self-service (CSS) software allows customers to complete tasks without the help of an organization's employees.

What is sales force automation (SFA) software?

Sales force automation (SFA) software automates sales tasks such as order processing and tracking.

What is supplier relationship management (SRM) software?

Supplier relationship management (SRM) software manages interactions with organizations that supply goods and services to an enterprise and includes procurement and contract management.

What are two major ERPs?

Two major ERPs are SAP Business Suite and Oracle.

What is the purpose of an enterprise system?

One important purpose of an enterprise system is to integrate all business processes and sectors in the system.

What is the sales and distribution process?

The sales and distribution process includes order entry, shipment, and billing.

What does the sales and distribution process connect to?

The sales and distribution process connects to the materials management module (MM), financial accounting module (FI), and controlling module (CO).

What is materials management?

Materials management is the acquisition of goods from vendors and management of goods while they are in stock.

What does the materials management process do?

The materials management process prepares and records a purchase order and records the vendor invoice.

What does materials management connect to?

Materials management connects to the sales and distribution module (SD), financial accounting module (FI), and controlling module (CO).

What is the financial accounting module?

The financial accounting module incorporates data from other modules into general ledger accounts and external financial statements.

What does the financial accounting module do?

The financial accounting module includes accounts receivable and accounts payable functions to record and manage data directly and to complete events performed in the SD and MM modules.

What is the controlling and profitability analysis (CO/PA) module?

The controlling and profitability analysis (CO/PA) module handles internal accounting.

What does the controlling module do?

The controlling module handles cost center accounting, profitability analysis for sales, activity-based accounting, and budgeting.

What is the human capital management module?

The human capital management module maintains data related to benefits, training, and work shifts.

What does the human capital management module do?

The human capital management system handles recruiting, management and administration of personnel, payroll processing, personnel training, and travel.

What are the two processes major business events are organized into?

Major business events are organized into the order-to-cash (revenue) process and the purchase-to-pay (expenditure) process.

What is a character?

A character is a basic unit of data.

What is a field?

A field is a single cell of data.

What does a field do?

A field is a collection of related characters that comprise an attribute.

What is a record?

A record (row in a table) is a collection of related data fields (attributes) that belong to a particular entity or event.

What is a table?

A table (file) is a collection of related records, sometimes called entity/event instances.

What are the activities in the manual accounting process?

The manual accounting process includes journalizing the business event, posting the business event from the journal to the subsidiary ledger, posting totals from the journal to the general ledger, and summarizing the business events by preparing a trial balance.

What is a disadvantage of the manual accounting process?

Disadvantages of the manual accounting process include being slow and inefficient and being susceptible to human errors.

What is master data?

Master data is repositories of relatively permanent data maintained over an extended period of time.

What is information processing?

Information processing includes data processing functions related to economic events.

What is data maintenance?

Data maintenance includes activities related to adding, deleting, or replacing standing (permanent) data.

What is periodic mode?

Periodic mode is a processing mode with a delay between the various data processing steps.

What is processing mode dependent on?

Processing mode is dependent on the use of batch processing.

What is batch processing?

Batch processing is the aggregation of several business events over some period of time with subsequent processing of these data as a group by the information system.

What is an Online Transaction Entry (OLTE/OCTE) system?

An Online Transaction Entry system is the use of data entry devices to enter business event data directly into the information system at the time and place the event occurs.

What does an Online Transaction Entry system actually do?

An Online Transaction Entry system merges the traditional subprocesses of business event occurrence and recording business event data into a single operation.

What is immediate mode?

Immediate mode is the processing mode in which little or no delay occurs between any two data processing steps.

What are the four methods of conducting E-Business?

The four methods of conducting E-Business are electronic mail (email), electronic document management, electronic data interchange (EDI), and Internet commerce.

What is Email?

Email consists of non-standardized messages between individuals linked via a communications network.

What is electronic document management?

Electronic document management captures, stores, manages, and controls document images and is used in document storage and retrieval and business event data processing.

What is electronic data interchange (EDI)?

Electronic data interchange (EDI) is a computer-to-computer exchange of business data in a structured format that allows direct processing of those electronic documents by the receiving computer system.

What is Internet EDI (IEDI)?

Internet EDI (IEDI) is the use of secure, structured messages over the Internet to execute business transactions.

What is the main difference between traditional and Internet EDI?

The main difference between traditional and Internet EDI is the use of a WAN for the traditional method.

What is Internet commerce?

Internet commerce is the computer-to-computer exchange of business event data via Internet communications that allows the initiation and consummation of business events.

What is documentation used for?

Documentation is used to understand, explain, evaluate, and improve complex business processes, information systems, and internal controls.

What does documentation need to comply with?

Documentation needs to comply with Section 404 of SOX.

What is useful about graphical documentation?

Graphical documentation can help the audience better understand systems and processes.

What are the two different types of system documentation?

The two different types of system documentation are data flow diagrams and context diagrams.

What are the four main symbols of data flow diagrams?

The four main symbols of a data flow diagram are the bubble symbol, data flow symbol, external entity symbol, and data store symbol.

What is the bubble symbol (circle)?

The bubble symbol (circle) depicts an entity or a process within which incoming data flows are transformed into outgoing data flows.

What is the data flow symbol (arrow)?

The data flow symbol (arrow) represents a pathway for data.

What is the external entity (box)?

The external entity (box) portrays a source or destination of data outside the system.

What is a data store (two parallel lines)?

A data store (two parallel lines) represents a place where data are stored.

What is a context diagram?

A context diagram is the least detailed picture of a system that defines the process being documented and shows the data flow into and out of the process to external entities.

What are external entities?

External entities are entities (people, places, or things) outside the system that send data to or receive data from the system.

What is a Physical Data Flow Diagram (Physical DFD)?

A Physical Data Flow Diagram (Physical DFD) is a graphical representation of a system showing the system's internal and external entities and the flows of data into and out of these entities.

What is an internal entity?

An internal entity is an entity within the system that transforms data.

What does a Physical Data Flow Diagram do?

A Physical Data Flow Diagram specifies where, how, and by whom a system is processed.

What is a Logical Data Flow Diagram (Logical DFD)?

A Logical Data Flow Diagram (Logical DFD) is a graphical representation of a system showing the system's processes (as bubbles), data stores, and the flows of data into and out of the processes and data stores.

What does a Logical Data Flow Diagram (Logical DFD) do?

A Logical Data Flow Diagram specifies what activities the system is performing.

What is a balanced DFD?

A balanced DFD occurs when two DFDs have equivalent external data flows.

What is top-down partitioning?

Top-down partitioning is the successive subdividing or "exploding" of logical DFDs.

What is a systems flowchart?

A systems flowchart is a graphical representation of a business process, including information processes as well as related operations processes (people, equipment, organizations, and work activities).

What does a systems flowchart do?

A systems flowchart presents a logical and physical rendering of the who, what, how, and where of information and operations processes.

What does a system flow diagram depict?

A system flow diagram depicts the sequence of activities performed as business events flow through the process.