TER 1
NFORMATION SYSTEM: AN ACCOUNTANT’S PERSPECTIVE
EW QUESTIONS
Operational, operations management, middle management, and top management. Horizontal flows
support operation-level tasks. The information is highly detailed about the day-to-day operations.
Vertical flows distribute summarized information to managers at all levels, and this information flows
upward. Instructions, quotas, and budgets also flow downward.
Data are facts that are collected in a “raw” form and made meaningful through processes such as
sorting, aggregating, classifying, mathematically manipulating, and summarizing. The meaningful
data is considered to be information. Information Systems are the formal procedures by which data
are collected, stored and processed into the system and distributed to users.
AISs process financial transactions and certain nonfinancial transactions that directly affect the
processing financial transactions. The external financial reporting documents of AIS are subject to
legal and professional standards. Consequently, management and accountants have greater legal
responsibility for AIS applications than for MIS applications. The MIS processes nonfinancial
transactions that are outside the scope of the AIS. MIS applications expand the information set
provided to such areas as production, sales, marketing, and inventory management. MIS often draws
from and builds on data from the AIS.
Revenue cycle, expenditure cycle, and conversion cycle.
Reports used by management, which the company is not obligated by law, regulation, or contract to
provide. These are often used for internal problem-solving issues rather than by external constituents.
Relevance, accuracy, completeness, summarization, and timeliness.
, Chapter 1 Page 2
Relevance and efficiency.
Data attribute (field), record, file, and database.
Storage, retrieval, and deletion.
Feedback is output that is sent back to the system as a source of data. Feedback is useful because it
can be used to initiate or adjust the system processes.
A. to support the stewardship function of management,
B. to support the decision-making processes of managers, and
C. to support the day-to-day operations of the firm.
Stewardship is the responsibility of management to properly utilize the resources of the firm entrusted
to them. Information systems provide management with reports to better manage the resources and
also provide responsibility reports by which management may be evaluated.
A. Materials Management
1. purchasing
2. receiving
3. stores
B. Production
1. production planning
2. quality control
3. maintenance
C. Marketing
1. advertising
2. market research
, Chapter 1 Page 3
3. sales order processing
D. Distribution
1. warehousing
2. shipping
E. Personnel
1. recruiting
2. training
3. benefits
4. counseling
F. Finance
1. portfolio management
2. treasury
3. credit
4. cash disbursement
5. cash receipt
G. Accounting
1. inventory control
2. cost accounting
3. payroll
4. accounts payable
5. accounts receivable
6. billing
7. fixed-asset accounting
, Chapter 1 Page 4
8. general ledger
H. Computer Service
1. data processing
2. systems development and maintenance
3. database administration
Internal auditors are responsible for in-house appraisal of the financial reporting system. Internal
auditors are concerned with deterring and detecting fraud and for conducting EDP audits. External
auditors are independent CPAs engaged by the firm to attest to the completeness and accuracy of
the financial statements. External auditors work together with the internal auditors.
The database administrator is responsible for the security and integrity of data stored in a central
database.
The role of the accounting function is to manage the financial information resources of the firm.
First, the accountants must capture and record business events of a firm and their financial
impact. Secondly, the accounting function distributes transaction information to decision makers
and operations personnel to help them coordinate their many tasks. The accountants must also
assign accountability for each of these tasks.
In a centralized data processing approach, the computer services function is centrally located. The
databases are housed in one place where all of the data processing occurs by one or more main
computers. Systems professionals perform all systems development and maintenance work for the
entire organization. End users wishing to have new systems or features must submit a formal request
to this group and are usually prioritized and placed in a queue.
In a distributed data-processing approach, the CPUs are spread out and control over data and
processing is at the information processing unit (IPU) level. Thus, end users have more influence
NFORMATION SYSTEM: AN ACCOUNTANT’S PERSPECTIVE
EW QUESTIONS
Operational, operations management, middle management, and top management. Horizontal flows
support operation-level tasks. The information is highly detailed about the day-to-day operations.
Vertical flows distribute summarized information to managers at all levels, and this information flows
upward. Instructions, quotas, and budgets also flow downward.
Data are facts that are collected in a “raw” form and made meaningful through processes such as
sorting, aggregating, classifying, mathematically manipulating, and summarizing. The meaningful
data is considered to be information. Information Systems are the formal procedures by which data
are collected, stored and processed into the system and distributed to users.
AISs process financial transactions and certain nonfinancial transactions that directly affect the
processing financial transactions. The external financial reporting documents of AIS are subject to
legal and professional standards. Consequently, management and accountants have greater legal
responsibility for AIS applications than for MIS applications. The MIS processes nonfinancial
transactions that are outside the scope of the AIS. MIS applications expand the information set
provided to such areas as production, sales, marketing, and inventory management. MIS often draws
from and builds on data from the AIS.
Revenue cycle, expenditure cycle, and conversion cycle.
Reports used by management, which the company is not obligated by law, regulation, or contract to
provide. These are often used for internal problem-solving issues rather than by external constituents.
Relevance, accuracy, completeness, summarization, and timeliness.
, Chapter 1 Page 2
Relevance and efficiency.
Data attribute (field), record, file, and database.
Storage, retrieval, and deletion.
Feedback is output that is sent back to the system as a source of data. Feedback is useful because it
can be used to initiate or adjust the system processes.
A. to support the stewardship function of management,
B. to support the decision-making processes of managers, and
C. to support the day-to-day operations of the firm.
Stewardship is the responsibility of management to properly utilize the resources of the firm entrusted
to them. Information systems provide management with reports to better manage the resources and
also provide responsibility reports by which management may be evaluated.
A. Materials Management
1. purchasing
2. receiving
3. stores
B. Production
1. production planning
2. quality control
3. maintenance
C. Marketing
1. advertising
2. market research
, Chapter 1 Page 3
3. sales order processing
D. Distribution
1. warehousing
2. shipping
E. Personnel
1. recruiting
2. training
3. benefits
4. counseling
F. Finance
1. portfolio management
2. treasury
3. credit
4. cash disbursement
5. cash receipt
G. Accounting
1. inventory control
2. cost accounting
3. payroll
4. accounts payable
5. accounts receivable
6. billing
7. fixed-asset accounting
, Chapter 1 Page 4
8. general ledger
H. Computer Service
1. data processing
2. systems development and maintenance
3. database administration
Internal auditors are responsible for in-house appraisal of the financial reporting system. Internal
auditors are concerned with deterring and detecting fraud and for conducting EDP audits. External
auditors are independent CPAs engaged by the firm to attest to the completeness and accuracy of
the financial statements. External auditors work together with the internal auditors.
The database administrator is responsible for the security and integrity of data stored in a central
database.
The role of the accounting function is to manage the financial information resources of the firm.
First, the accountants must capture and record business events of a firm and their financial
impact. Secondly, the accounting function distributes transaction information to decision makers
and operations personnel to help them coordinate their many tasks. The accountants must also
assign accountability for each of these tasks.
In a centralized data processing approach, the computer services function is centrally located. The
databases are housed in one place where all of the data processing occurs by one or more main
computers. Systems professionals perform all systems development and maintenance work for the
entire organization. End users wishing to have new systems or features must submit a formal request
to this group and are usually prioritized and placed in a queue.
In a distributed data-processing approach, the CPUs are spread out and control over data and
processing is at the information processing unit (IPU) level. Thus, end users have more influence
