Accounting Information Systems Exam 1

Three Classifications of ES data

Organizational Data- define the organizational structure of the business, rarely change Master Data- define key entities with whom an organization interacts Transaction Data- reflect day-to-day activities

What type of data represents the structure of an enterprise?

Organizational data

Enterprise Database

The central repository for all the data related to the enterprise's business activities and resources

True or False: An information system may consist of both computer-based and manual components

True

True or False: Enterprise Systems integrate the business process and information from all of the organizations functional areas such as marketing, sales, purchasing, HR, production, logistics, etc.

True

True or False: The correct sequence of events for entering a customer order is edit order, record sales order, update inventory, notify warehouse

True

A primary reason that the FASB requires that GAAP be consistently applied from one period to the next is

comparability

At which level of the organization are decisions most unstructured?

strategic management level

Confidentiality

Corresponds to the restricted access information quality goal.

What is the pervasive constraint?

"Cost vs. Benefit" The benefits of obtaining the information must exceed the costs

COBIT 5

A complete, internationally accepted framework for governing and managing enterprise information and technology (IT) that supports enterprise executives and management in their definition and achievement of business goals and related IT goals. COBIT describes five principles and seven enablers that support enterprises in the development, implementation, and continuous improvement and monitoring of goodlT- related governance and management practices.

Efficiency

A measure of the productivity of the resources applied to achieve a set of goals

System

A set of interdependent elements that together accomplish specific objectives

Enterprise systems: A.can include ERP systems B.facilitate business processes between organizations C.integrate back-office and front-office processes D.have become fairly easy to implement

A.can include ERP systems

Which of these managers is least concerned with the timeliness of information which she uses for decision making? A.strategic manager B.tactical manager C.operations manager D.business process manager

A.strategic manager

The text takes the following view of the relationship between an IS and an AIS...

AIS is a type of IS

The correspondence or agreement between the information and the actual events or objects that the information represents is known as

Accuracy

Accuracy

Agreement between information and the actual events or objects it represents

Legacy System

An old system that is fast approaching or beyond the end of its useful life within an organization Older information systems that are often incompatible with other systems, technologies, and ways of conducting business These can be used as the base to create new systems

Supply chain management (SCM) software A.is typically under the control of external partners in the chain. B.helps plan and execute demand planning; acquiring inventory; and manufacturing, distributing, and selling a product. C.cannot be integrated into an overall ERP. D.none of the above

B.helps plan and execute demand planning; acquiring inventory; and manufacturing, distributing, and selling a product.

Software that manages the product, beginning with the design of the product, continuing through manufacture and culminating in the disposal of the product, is known as A.product relationship management (PRM) software B.product lifecycle management (PLM) software C.supplier relationship management (SRM) software D.product self service (PSS) software

B.product lifecycle management (PLM) software

The Information Cycle

Business Process -> Data -> Information -> Knowledge -> Decision Making ->

All of the following are components of relevance except: A.timeliness B.predictive value C. verifiability D.feedback value

C. verifiability

A basic unit of data such as a letter, number, or special character is known as a

Character

The information quality that enables users to identify similarities and differences in two pieces of information is

Comparability

Composite Applications

Composite applications and mash-ups rely on Web services to send and receive data between and among ES in a standardized way, which eliminates a great deal of cost and complexity from integration projects.

Internal control is a process designed to provide absolute assurance regarding achieving objectives in achieving... A.efficiency and effectiveness of operations B.reliability of reporting C.compliance with applicable laws and regulations D.none of the above

D.none of the above It is REASONABLE assurance, not Absolute assurance.

Which of the following is an unstructured decision? A.when scheduled maintenance should be performed B.how much inventory to reorder C.how fast an assembly line should operate D.which research and development projects should be undertaken

D.which research and development projects should be undertaken

Organizations adopt enterprise systems A.to differentiate themselves from competitors B.to reduce costs of conducting business C.to improve performance D.all of the above

D. all of the above

E-business does not include... A.interaction between back-office and front-office processes B.electronic networks C.business processes between individuals and organizations D. ERP systems

D.ERP systems

Information

Data presented in a form that is useful to decision makers

Transactional Data

Data unique to the order (products, and quantity ordered)—>typically stored in relational databases Reflects the day-to-day activities of the organization- this is constantly changing.

Unstructured Decision

Decisions that occur in situations in which no procedures or rules exist to guide decision makers toward the correct choice; strategic level Typically one-time decisions, does not rely on standard operating procedure, decision maker's intuition plays the most important role, information technology offers little support for these decisions. Those for which none of the decision phases (intelligence, design, or choice) are routine or repetitive.

Comparability

Enables the user to identity similarities and differences in two pieces of information

ERP

Enterprise Resource Planning Integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make enterprise-wide decisions by viewing enterprise-wide information on all business operations Software packages that can be used for the core systems necessary to support enterprise systems

True or False: Action is one of the steps involved in the decision making process

False

True or False: a programmer is a typical job an accountant might have in a career in AIS

False

A collection of related characters that comprise an attribute such as a customer number or name is known as a

Field

Integrity

Free of error and complete

What are the components of enterprise systems?

Hardware, Software, and a database

Product Lifecycle Management

Help companies administer the process of research, design, and product management. Software that manages the product, beginning with the design of the product, continuing through manufacture and culminating in the disposal of the product.

Scalability

How well a system can scale up, or adapt to the increased demands of growth

Why are organizations becoming de-centralized?

Increased competition Global markets vs. local Pressures to be more efficient and effective

ISVs

Independent Software Vendors- offer highly specialized niche applications

The sequence of components in the functional model of an information system is

Input, Processing, Output, Users

Efficiency and effectiveness of operations are goals of...

Internal control

Best-of-breed applications

Isolated to one process or part of a process and have evolved from departmental applications

Enterprise Systems

Large-scale application software packages that support business processes, information flows, reporting, and data analytics in complex organizations. They support the entire process rather than parts of the process. Integrate business processes and information from all of an organization's functional areas. Helps coordinate the operation of business functions and provide a central information resource for the organization.

On a systems flowchart, a solid line with an arrow indicates a

Logical Flow

What can ERPs help with?

Lower total costs in the supply chain Shorten throughput times Reduce stock to a minimum Improve cash flow/cash management Enlarge product assortment Improve product quality Provide more reliable delivery dates and better service to the customer Efficiently coordinate global demand, supply and production

What is the threshold for recognition?

Materiality

Effectivness

Meets the needs of the information consumer who uses it for a specific task.

What are problems with legacy systems?

Multiple incompatible software and hardware platforms and interfaces Numerous obscure data formats, data redundancy Stale data and high rates of data errors Broken business processes (functional silos) High maintenance costs

Why do ERP Projects Fail so Often? What is the main reason?

Politics Too much customization PEOPLE Cost/length

What are the three layers of Client-Server Architecture?

Presentation Layer, Application Layer, Data Layer

Which processes is triggered when someone in the company determines that a specific quantity of a certain material is needed?

Procurement Process

Structured Decisions

Programmable tasks, can be automated because a well-defined standard operating procedure exists for these types of decisions. Repetitive and routine, can be automated because a well-defined standard operating procedure exists for these types of decisions (ex. record keeping, payroll) Those for which all three decision phases (intelligence, design, and choice) are relatively routine or repetitive. Some decisions are so routine that a computer can be programmed to make them.

Availability

Quality goals under accessibility and security.

A collection of related data fields pertaining to a particular entity or event is known as a

Record

On a systems flowchart, computer processing is represented by a:

Rectangle

What are problems with separate manual systems?

Reporting is periodic (month/quarter/year), not real-time Limited accessibility to information: an A/R clerk should be contacted each time when current status of user account is needed Too high level of aggregation: only summarized numbers of financial statements are available to the end users

SOA

Service-Oriented Architecture larger software programs borken down into services connected to each other that form an application for an entire business process. Good for agile business processes, and very reusable. Called "web services" when designed over the internet.

What are some costs of ERP implementation?

Software - applications, licenses, maintenance, support Hardware - servers, network, backups, administration People - DB and network administrators, consultants, project managers etc Continual support from senior execs Change management in the organization (covers many things, from training to BP re-engineering)

Packaged applications

Software firms began to develop in the 1970s. Generic software that can be used by many companies.

Business Process

Standardized set of activities that accomplish a specific task

Information Systems Model

Storage Input -> Processing -> Output Users

SRM

Supplier Relationship Management Supports manufacturing flow by identifying and maintaining relationships with highly valued suppliers

SCM

Supply Chain Management a management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value

Master data

The business-critical information on customers, products, accounts, and other things that is needed for operations and business transactions. Master data defines the key entities with whom an organization interacts, such as customers and suppliers. This data changes, but occasionally.

Vertical Information Flows

The concept of information passing between departments and management. service a multi-level management function from operations and transaction processing through tactical, operations, and strategic management.

Completeness

The degree to which the information includes data about every relevant object or event

physical data flow diagram

The depiction of the first level of detail within a system, focusing on physical entities such as employees involved in the system, and hard-copy inputs and outputs. Graphical representation of a system showing the system's internal and external entities, and the flows of data into and out of these entities.

context diagram

The highest level, it provides a summary-level view of a system. It shows the data processing system, the inputs and outputs of the system, and the external entities that are the sources and destinations of the system's inputs and outputs. (the least comprehensive)

Relevance

The information can reduce uncertainty or increases knowledge in the decision making situation

Predictive/ Feedback Value

The information improves a decision maker's capacity to predict, confirm, or correct earlier expectations

Verifiability

The information is in a high dress of consensus with other independent measurements

Neutraility

The information is objective, free from systematic under-or-over statements

Understandability

The information is presented in a form that permits its use in the decision making situation

Timeliness

The information is provided to decision maker before it loses the capacity to influence the decsion

Reliability

The information provided is appropriate for decision making

Validity

The information refers to actual authorized events and objects

Three-tier client server

Three application servers from one database server

If information arrives too late to impact a decision then there is a problem with...

Timeliness

On a systems flowchart, a paper file is represented by a:

Triangle

Organizational data

Used to represent the structure of an enterprise. Includes companies, subsidiaries, factories, warehouses, sales regions. Rarely changes over time

What are the three qualities that make up Information Integrity?

Validity, Accuracy, and Completeness

The ability of more than one individual to come to the same measurement is known as...

Verifiability

Supply Chain Management

a management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value control of the activities of purchasing, processing, and delivery through which raw materials are transformed into products and made available to final consumers

Data

facts and figures in raw form

Business Facing Process

invisible to the external customer but essential to the effective management of the business

Information system or Management Information System

is a manmade system that consists of an integrated set of computer-based and manual components established to collect, store, and manage data and to provide output information to users.

System Integration

is defined as the process of bringing together the component subsystems into one system and ensuring that the subsystems function together as a system

Silo Effect

people in different functional areas perform their steps in the process isolation (called silos), and lose sight of the "big picture"

Information technology (IT) has been able to create additional value by

reducing costs improving quality balancing the cost and timeliness of value activities

Horizontal information flows

relate to specific business events, such as one shipment, or to individual inventory items. The information moves through operational units such as sales, the warehouse, and accounting. The concept of information passing between two equivalent departments in an organisation.

The Sarbanes-Oxley Act of 2002 dramatically changed the daily work of financial accountants and auditors because it...

required that external auditors report on the effectiveness of an organizations system of internal control

Customer Facing Process

results in a product or service that is received by an organization's external customer

Niche Applications

software programs created to address the requirements of specific departments or users