Chapter 1
Accounting Information Systems: An Overview
System: Two or more interrelated components that interact to achieve a goal, often
composed of smaller subsystems that support the larger system.
Each subsystem is designed to achieve one or more organizational goals. Changes
in subsystems cannot be made without considering the effect on other subsystems
and on the system as a whole.
Goal conflict: When a subsystem’s goals are inconsistent with the goals of another
subsystem or with the system as a whole.
Goal congruence: When a subsystem achieves its goals while contributing to the
organization’s overall goal. The larger the organization and the more complicated the
system, the more difficult it is to achieve goal congruence.
Data: facts that are collected, recorded, stored and processed by an information
system.
Information: Data that have been organized and processed to provide meaning and
improve the decision-making process.
Information overload: Exceeding the amount of information a human mind can
absorb and process, resulting in a decline in decision-making quality and an increase
in the cost of providing information.
Information technology (IT): The computers and other electronic devices used to
store, retrieve, transmit and manipulate data.
Value of information: The benefit provided by information less the cost of producing
it.
The characteristics of useful information:
- Relevant
- Reliable
- Complete
- Timely
- Understandable
- Verifiable
- Accessible
Business process: A set of related, coordinated, and structured activities and tasks,
performed by a person, a computer, or a machine that help accomplish a specific
organizational goal.
To make effective decisions, organizations must decide what decisions they need to
make, what information they need to make the decisions, and how to gather and
process the data needed to produce the information. This data gathering and
processing is often tied to the basic business processes in an organization.
Accounting Information Systems: An Overview
System: Two or more interrelated components that interact to achieve a goal, often
composed of smaller subsystems that support the larger system.
Each subsystem is designed to achieve one or more organizational goals. Changes
in subsystems cannot be made without considering the effect on other subsystems
and on the system as a whole.
Goal conflict: When a subsystem’s goals are inconsistent with the goals of another
subsystem or with the system as a whole.
Goal congruence: When a subsystem achieves its goals while contributing to the
organization’s overall goal. The larger the organization and the more complicated the
system, the more difficult it is to achieve goal congruence.
Data: facts that are collected, recorded, stored and processed by an information
system.
Information: Data that have been organized and processed to provide meaning and
improve the decision-making process.
Information overload: Exceeding the amount of information a human mind can
absorb and process, resulting in a decline in decision-making quality and an increase
in the cost of providing information.
Information technology (IT): The computers and other electronic devices used to
store, retrieve, transmit and manipulate data.
Value of information: The benefit provided by information less the cost of producing
it.
The characteristics of useful information:
- Relevant
- Reliable
- Complete
- Timely
- Understandable
- Verifiable
- Accessible
Business process: A set of related, coordinated, and structured activities and tasks,
performed by a person, a computer, or a machine that help accomplish a specific
organizational goal.
To make effective decisions, organizations must decide what decisions they need to
make, what information they need to make the decisions, and how to gather and
process the data needed to produce the information. This data gathering and
processing is often tied to the basic business processes in an organization.
