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Accounting Information systems
Test 1
24
Accounting
Undergraduate 3
02/25/2013

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Term
Accounting information systems
Definition

Integrated framework within a firm that employs people, procedures, and information technology (hardware and software) to transform financial data into information for operating and managing 

the firms activities and reporting the firms achievements to interested parties and provides adequate controls to safeguard the organization's assets

Term
Reliable
Definition
Free from error or bias; accurately represents organization events or activities
Term
Relevant
Definition
Reduces uncertainity, improves decision making, or confirms or corrects prior expectations
Term
Complete
Definition
Does not omit important aspects of the events or activities it measures
Term
Timely
Definition
Provided in time for decision makers to make decisions
Term
Understandable
Definition
Presented in a useful and intelligible format
Term
Verifiable
Definition
Two independent, knowledgeable people produce the same information
Term
Accessible
Definition
Available to users when they need it and in a format that can use
Term
Data
Definition

facts that are collected, recorded, stored, and processed by an information system

  • Raw Facts: Have no organization or meaning to users
  • Organization collects: Resources, Events, Agents

 

Term
Information
Definition

data that have been organized and processed to provide meaning and improve the decision-making proces

  • Organized/Processed Data
  • Is Meaningful and Useful to users

 

Term
Structured Decision
Definition

repetitive/routine/well understood

  •  CAN be automated
  •  Lower level employees

     o   Ex: Credit check/Inventory Control

Term
Semi-structured Decision
Definition

incomplete rules/subjective assessments and judgments 

  •   CANT be automated

Term
Unstructured Decision
Definition

nonrecurring and nonroutine 

  •   Upper-level management

o   Ex: new product line

Term
Enterprise Resource Planning (ERP)
Definition

integrated software packages designed to provide complete integration of an organization’s business information processing systems and all related data

Term
Characteristics of ERP
Definition

  • No documentary evidence of control procedures performed
  • Electronic readable records
  • Automation of accounting and business information
  • Less detectable error routines
  • More Reliable with proper controls
  • More difficult to make changes after implementation 

 

 

 

 

 

Term
Advantages of ERP
Definition

  • Integration of an organization’s data and financial information
  • Data is captured once
  • Greater management visibility, increased monitoring
  • Better access controls
  • Standardized business operating procedures
  • Improved customer service
  • More efficient manufacturing 

Term
Disadvantages of ERP
Definition

o   Improper use of technology

§  Premature/Early user of new hardware/software

o   Inability to control technology

§  Little time/efforts to develop/install technology controls

o   Inability to translate user needs into technology requirements

o   Illogical processing due to automation

o   Inability to react quickly

o   Cascading of Errorsè Domino Effect

§  Associated with changes with application programs

o   Repition of errors

§  Insufficient program testing/inadequate checks on data entry/failure to monitor the results of processing 

Term

Batch Processing

 

Definition

processing data at a given time interval 

 

Term
Advantages of Batch processing
Definition
  • Simple and less expensive design
  • Relatively efficient
  • Use batch for total control
Term
Disadvantages of Batch processing
Definition
  • Master files are out of date 
  • Difficult to correct errors
  • Time consuming for sorting and updating
Term
Online Real-time
Definition
Processes data immediately after it is captured
Term
Advantages of Online Real-time
Definition
  • Data is up to date and complete which improves customer satisfaction
  • Integrated Applications-fewer duplicates 
Term
Disadvantages of Online Real-time
Definition
  • More expensive and more complex
  • Difficult to maintain an audit trail which is a means to check accuracy and the validity of your balances
Term
XBRL vs Traditional
Definition
  • Automate FS disclosure checklist/Manually checking for accuracy
  • Expert Systems prepare FS/Human-Semi-auto preparation of FS
  • comparing Accounting policies/Comparing numerically only
  • Conversion from GAAP to international standards/Manual conversion
  • Power search virtual documents/Limited search
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