AIS

An information system collects processes and stores accounting and other data and reports
information. Accounting a data identification, collection and storage process. An information
development, measurement and communication process System a set of two or more interrelated
components interacting to achieve a goal - Try to avoid goal conflict - Try to achieve goal congruence
Data v Information Data - Facts that are collected, recorded stored and processed - Insufficient for
decision making Information - Processed data used in decision making purposes Data/ information
overload too much information will make it more, not less, difficult to make decisions. Value of
information Benefits - Reduce uncertainty - Improve decisions - Improve planning - Improve scheduling
Costs - Time and resources - Produce information - Distribute information Benefit > cost analysis
Characteristics of useful information Relevant reduces uncertainty, improves decision making or
confirms correct prior expectations Reliable free for error or bias, accurately represents organisation
events or activities Existence the transactions, assets, obligations and equity generated in the system
exist Valid only those transactions and reports that are authorised by the firm should be processed
Complete does not omit important aspects of the events or activities it measures Timely provided in
time for decision maker to make decisions Measureable transactions, assets, liabilities and equities
processed in the system are measured accurately Understandable presented in a useful intelligible
format Verifiable two independent, knowledgeable people can produce the same information
Accessible available to users when they need it and in a format they can use Data input capture Data
must be collected about three facets of each business activity as it occurs: 1. Each activity of interest 2.
Resources affected by each activity 3. People who participate in each activity Data input paper based
source documents Source documents Examples - Sales order form - Purchase requisition Turnaround
Usually paper based Are sent form organisational to customer Same document is returned by the
customer to organisation Source data automation Source data is captured - In machine readable form -
At the time of the business activity Data input accuracy and control Well-designed source documents
can ensure that data captured is accurate and complete Computer based storage Entity person, place
or thing that data is stored about Attributes facts about entity Fields where attributes are stored
Records group of related attributes about an entity File group of related records File types
Transaction contains records of a business from a specific period of time Master permanent records
Database set of interrelated files Data processing Four main activities - Create new data records -
Read, retrieve or view existing data records - Update existing stored data records - Delete data or
records Batch processing - Periodic updates - Master files current only immediately after updates Online
real time processing - Update each transaction as it occurs - Master files are always current - Accurate as
data input errors can be corrected in real time or refused Enterprise resource planning ERP Integrate
organisations information into one overall AIS ERP module Advantages - Integration of data - Captured
once - Greater management visibility - Better controls - More efficient Disadvantages - Cost - Time
consuming implementation - Complex