BUSI 2085 Accounting Information Systems
Chapter 1 – Introduction to AIS
1. System – 2 or more interrelated components that interact to achieve a goal.
2. Each subsystem is designed to achieve one or more organizational goals.
Goal Conflict – one subsystem’s goals are inconsistent with other subs or
the whole system.
Goal Congruence – goal achieved, contributing to the organization’s overall goal
3. Data – facts collected and stored by an information system. Not sufficient for decision making.
4. Information – data which have been organized and processed to provide meaning and improve decision
making. Users make better decisions when information quantity and quality increase.
Information Overload – passed the limit that human mind can absorb, resulting decline in decision
making quality and increase in cost of providing information
Information technology – help filter and condense information
Value of Information – benefit produced by information - cost of producing it
- reduced uncertainty - time & resources spent
- improved decisions to produce and
- improved ability to plan distribute the information
and schedule activities
5. Business process – related, coordinated, structured activities and tasks performed by a
person/computer/machine that helps accomplish a specific organizational goal.
Transaction – agreement between 2 entities to exchange goods/services or any other event that can be
measured in economic terms by an organization
Transaction processing – begins with capturing transaction data and ends with informational output
5 major business processes/transaction cycles:
a. revenue cycle – goods/services sold for cash or a future promise to receive cash
b. expenditure cycle – purchasing stocks for resale or raw-material in exchange for cash or future
promise
c. production or conversion cycle – raw materials/labour/equipment to produce finished goods
d. human resources/payroll cycle-hiring/training/compensating/evaluating/promoting/
terminating employees
e. financing cycle – raising money by selling shares to investors / borrowing money / paying
dividends & interest
,
, 6. AIS – collects, enter, process, store, report data and information
6 components of AIS:
which enables an AIS to fulfil 3 business functions:
1. Collect and store data about organizational activities, resources and personnel
2. Transform data into information so management can plan, execute, control and evaluate activities,
resources and personnel
3. Provide adequate controls to safeguard the organization’s assets and data
Chapter 1 – Introduction to AIS
1. System – 2 or more interrelated components that interact to achieve a goal.
2. Each subsystem is designed to achieve one or more organizational goals.
Goal Conflict – one subsystem’s goals are inconsistent with other subs or
the whole system.
Goal Congruence – goal achieved, contributing to the organization’s overall goal
3. Data – facts collected and stored by an information system. Not sufficient for decision making.
4. Information – data which have been organized and processed to provide meaning and improve decision
making. Users make better decisions when information quantity and quality increase.
Information Overload – passed the limit that human mind can absorb, resulting decline in decision
making quality and increase in cost of providing information
Information technology – help filter and condense information
Value of Information – benefit produced by information - cost of producing it
- reduced uncertainty - time & resources spent
- improved decisions to produce and
- improved ability to plan distribute the information
and schedule activities
5. Business process – related, coordinated, structured activities and tasks performed by a
person/computer/machine that helps accomplish a specific organizational goal.
Transaction – agreement between 2 entities to exchange goods/services or any other event that can be
measured in economic terms by an organization
Transaction processing – begins with capturing transaction data and ends with informational output
5 major business processes/transaction cycles:
a. revenue cycle – goods/services sold for cash or a future promise to receive cash
b. expenditure cycle – purchasing stocks for resale or raw-material in exchange for cash or future
promise
c. production or conversion cycle – raw materials/labour/equipment to produce finished goods
d. human resources/payroll cycle-hiring/training/compensating/evaluating/promoting/
terminating employees
e. financing cycle – raising money by selling shares to investors / borrowing money / paying
dividends & interest
,
, 6. AIS – collects, enter, process, store, report data and information
6 components of AIS:
which enables an AIS to fulfil 3 business functions:
1. Collect and store data about organizational activities, resources and personnel
2. Transform data into information so management can plan, execute, control and evaluate activities,
resources and personnel
3. Provide adequate controls to safeguard the organization’s assets and data
