Chapter 1 AIS

system

detailed methods, procedures, & routings that carry out activities, perform a duty, achieve goals or objectives, or solve problems.

-made up of subsystems:designed to achieve organizational goals

goal conflict

occurs when a subsystem’s goals are inconsistent with the goals of another subsystem or the system as a whole

goal congruence

occurs when subsystems achieve its goals while contributing to the organizations overall goal.

Data

facts that are recorded and stored

-insufficient for decision making

-a fact could be a number, date, name etc.

information

data that has been organized & processed to provide meaning and improve decision making.

- helps us to make decisions

information overload

too much information will make it more, not less, difficult to make decisions

machine-readable

data is most useful when it is in a machine readable format that can be read and processed by a computer

-ex: XBRL

-Using XBRL gives the data the characteristics of: Reliability, Relevance, Accessibility, Understandability, Timeliness

Information technology (IT)

Used to help decision makers more effectively filter and condense information.

Value of Information

Information is valuable when the benefits exceed the costs of gathering, maintaining, & storing the data.

Business Process

A set of related, coordinated, & structured activities and tasks, performed by a person, a computer, or a machine that help accomplish a specific organizational goal.

Transaction

-Give-get exchanges

-Between 2 entities

-measured in economic terms

Transaction processing

-capturing data, processing it, storing it for later use, producing information output

Business processes or transaction cycles

Transactions between the business organization & external parties fundamentally involve a “give-get” exchange.

-The basic business processes are: revenue cycle, expenditure cycle, production cycle, payroll cycle, financing cycle

revenue cycle

give goods/give service-get cash

expenditure cycle

get goods/get service-give cash

production on conversion cycle

give labor & give raw materials-get finished goods

Human resource/payroll cycle

give cash-get labor

financing cycle

give cash-get cash

Accounting information system (AIS)

a system that collects, records, stores, and processes data to produce information for decision makers.

-an AIS collects & stores data, transfers that data into information, & provides adequate controls

Artificial intelligence

the use of computer systems to stimulate human intelligence processes such as learning, reasoning, & self improvement.

-can be used in business, education, finance, & healthcare

data analytics

the use of software & algorithms to find & solve problems & improve business performance

-analytics can help improve business performance by

• identifying a problem/issue for management to resolve

• collecting the data needed to solve the problem, analyze it, & make recommendations to management on how to resolve it.

data dashboard

are an essential part of most analytic tools. They display important data points, metrics, & key performance indicators in easily understood line or bar charts, tables or gauges.

blockchain

represents individual digital records, called blocks, linked together using cryptography in a single list, called a chain.

Virtualization

the running of multiple systems simultaneously on one physical computer.

-each system is a “virtual system”

-All systems share the same hardware

cloud computing

the use of a browser to remotely access software, data storage, hardware, & applications that are housed on another computer

Internet of Things (IoT)

refers to the embedding of sensors in a multitude of devices (lights, heating & air conditioning, appliances, etc.) so that those devices can now connect to the internet.

Value chain

links together the different activities within an organization that provide value to the customer

-value chain activites are primary & support activities

primary activities

provide direct value to the customer

support activities

enable primary activities to be efficient & effective

supply chain

an extended system that includes the organization’s value chain as well as its suppliers, distributors, & customers.

general ledger & reporting system

information for both internal & external users