Chapter 1: The Information System Flashcards Preview

BUS 319: Accounting Information Systems > Chapter 1: The Information System > Flashcards

Flashcards in Chapter 1: The Information System Deck (48):
1

Accounting Information System

Is a system of collecting, storing, and processing financial and accounting data that are used by decision makers

2

Information Objectives

To support the firm's day to day operations, to support management decision making, to support the stewardship function of management

3

Information System

Is the set of formal procedures by which data is collected, stored, processed into information, and distributed to users

4

Management Information System

a computerized information-processing system designed to support the activities of company or organizational management.

5

Transaction

Is an event that affects or is of interest to the organization and is processed by its information system as a unit of work

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Financial Transaction

Is an economic event that affects the assets and equities of the organization and is measured in monetary terms

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Nonfinancial Transactions

Are events that do not meet the narrow definition of a financial transaction

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The 3 parts of the Accounting Information System

The transaction processing system, general ledger/financial reporting system, and management reporting system

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Transaction Processing System

Supports daily business operations with numerous reports, documents, and messages for users throughout the organization

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General Ledger/Financial Reporting System

Produces the traditional financial statements such as the income statement, balance sheet, statement of cash flows, tax returns, and other reports

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Management Reporting System

Provides internal management with special purpose financial reports and information needed for decision making such as budgets, variance reports, and responsibility reports

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Non discretionary Reporting

The organization has few or no choices in the information it provides

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Discretionary Reporting

The organization can choose what information to report and how to present it

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External Users

Creditors, stockholders, and customers among others

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Internal Users

Include management at all levels of the organization

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Data

Are facts which may or may not be processed and have no direct effect on a user's actions

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Information

Causes the user to take an action that he or she otherwise could not or would not have taken

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Data Sources

Are financial transactions that enter the information system from either internal or external sources

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Data Collection

Is the first operational stage in the information system. The objective is to ensure that event data entering the system are valid, complete, and free from errors

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Data Processing

Once data is collected it usually requires processing to produce information.

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Examples of Data Processing

Mathematical algorithms used for producing scheduling applications, statistical techniques for forecasting, and posting procedures used for accounting applications

22

Database

Is its physical repository for financial and non financial data. Regardless of the databases physical form business data is organized in a logical hierarchy

23

Database Management

Involves three fundamental tasks: storage, retrieval, and deletion.

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Storage Task

Assigns keys to new records and stores them in their proper location in the database

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Retrieval

Is the task of locating and extracting an existing record from the database for processing

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Deletion

Is the task of permanently removing obsolete or redundant records from the database

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Information Generation

Is the process of compiling, arranging, formatting, and presenting information to users

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Feedback

Is a form of output that is sent back to the system as a source of data

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Materials Management

The three sub functions of materials management are purchasing, receiving, and stores

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Materials Management: Purchasing

Is responsible for ordering inventory from vendors when inventory levels fall to their reorder points

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Materials Management: Receiving

Is the task of accepting the inventory previously ordered by purchasing.

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Materials Management: Stores

Takes physical custody of the inventory received and releases these resources into the production process as needed

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Production Planning

Involves scheduling the flow of materials, labor, and machinery to efficiently meet production needs

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Quality Control

Monitors the manufacturing process at various points to ensure that the finished products meet the firms quality standards

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Maintenance

Keeps the firms machinery and other manufacturing facilities in running order.

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Central Data Processing

All data processing is performed by one or more large computers housed in a common data center that serves users throughout the organization

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Distributed Data Processing

Users process their transactions locally. Each user segment possesses the IT personnel, facilities, hardware, software, and data they need to support their operations

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Commercial Software

Is available for both general accounting use and for industry specific such as medical billing

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Enterprise Resource Planning

Is comprised of thousands of small program modules. The IT team select modules that support the organization's specific information and data processing needs

40

Network

Is a collection of interconnected computers and communication devices that allows users to communicate, access data, and share information

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Network Administration

Is responsible for the effective functioning of the software and hardware that constitute the organization's network

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IT Outsourcing

The organization sells its IT resources to a third party outsourcing vendor

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Cloud Computing

Is a location independent computing where shared data centers deliver hosted IT services over the Internet

44

Domain Experts

This involves specifying certain operational rules, reporting requirements, and framing internal control objectives the system must achieve

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Conceptual System

Involves specifying the criteria for identifying delinquent customers and the information that needs to be reported

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Physical System

Includes the data storage medium to be used and the method for capturing and presenting the information

47

Attest Function

Is performed by CPAs who work for public accounting firms that are independent of the client organization being audited

48

Internal Auditing

Is an independent appraisal function established within an organization to examine and evaluate its activities