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Set of two more more interrelated components that interact to achieve a goal |
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changes in subsystems cannot be made without considering the effect on other subsystems and the system as a whole |
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Occurs when a decision or action of a subsystem is inconsistent with the goals of another subsystem or the system as a whole |
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achieved when a subsystem achieves its goals while contributing to the organization's overall goal |
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eliminates duplicate recording, storage, reporting and other processing activities in an organization. |
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facts that are collected, recorded, stored, and processed by an information system |
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Resources affected by the activities, Events that take place, and Agents that participate in the event |
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data that have been organized and processed to provide meaning to a user |
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occurs when limits to the amount of information the human brain can effectively absorb and process are passed |
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The benefit produced by the information minus the cost of producing it |
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Major benefits of information: |
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reduction of uncertainty, improved decisions, better ability to plan |
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time and resources spent collecting, processing, and storing data, as well as distributing the information to decision makers |
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Information provided to external users |
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mandatory info required by governmental entities or essential info required to conduct business with external parties |
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Discretionary information - helps make choices about what information should be made available, to whom, and how frequently |
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Primary consideration in producing mandatory and essential information |
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to minimize costs while meeting minimum standards of reliability and usefulness and meeting regulatory requirements |
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Primary consideration in producing discretionary information |
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benefits exceed its costs |
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Accounting information system |
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collects, records, stores, and processes data to produce information for decision makers |
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1. People who operate the system and perform various functions 2. Procedures and instructions, both manual and automated, involved in collecting, processing, and storing data about the organization's activities 3. Data about the organization and its business processes 4. Software used to process the organization's data 5. Information technology infrastructure, including computers, peripheral devices, and network communications devices used to collect, store, process, and transmit data and information |
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Six components of and AIS |
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1. Collect and store data about organizational activities, resources, and personnel 2. Transform data into information that is useful for making decisions 3. Provide adequate controls to safeguard the organization's assets |
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Three important business functions fulfilled by an AIS |
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reduces uncertainty, improves decision maker's ability to make predictions, or confirms/corrects their prior expectations |
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Free from error or bias and accurately represents the events or activities of the organization |
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does not omit important aspects of the underlying events or activities that it measures |
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presented in a useful and intelligible format |
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Two knowledgeable people acting independently would produce the same information |
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available to users when they need it and in a format they can use |
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consists of receiving, storing, and distributing the materials an organization uses to create the services and products it sells.
Ex. receiving, handling, and storing steel, glass, and rubber are some of the inbound logistics activities of an automobile manufacturer |
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transform inputs into final products and services
Ex. assembly-line activities convert raw materials into a finished car |
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activities distribute finished products or services to customers
Ex. shipping cars to dealers |
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help customers buy the organization's products or services |
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provide post-sale support to customers |
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1. Inbound logistics 2. Operations 3. Outbound logistics 4. Marketing and sales 5. Service |
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Five primary activities of value chain |
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Support activities: 1. Firm infrastructure 2. Human resources 3. Technology 4. Purchasing |
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Allow the five primary activities to be performed efficiently and effectively
(and what are the four categories?) |
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the accounting, finance, legal, and general administration activities that allow an organization to function (also includes AIS) |
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include recruiting, hiring, training, and providing employee benefits and compensation |
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Improve a product or service.
Ex. R&D, investments in new IT, Web site development, product design |
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procure raw materials, supplies, machinery, and the buildings used to carry out the primary activities |
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The _______ and ______ are subsystems of the value chain system |
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repetitive, routine, and understood well enough that they can be delegated to lower- level employees in the organization
Can often be automated
Ex. extending credit to customers - only need to know credit limit and current balance |
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characterized by incomplete decision making rules and the need for subjective assessments and judgments to supplement formal data analysis
Cannot be fully automated but often supported by computer based decision aids
Ex. setting a marketing budget for a new project |
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nonrecurring and nonroutine. No framework or model exists. Require considerable judgment and intuition.
Can be supported by computer-based decision aids that facilitate gathering information from diverse sources
Ex. Choosing a magazine cover, hiring senior management, selecting basic research projects to undertake |
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relates to the effective and efficient performance of specific tasks
Ex. decisions related to inventory management and extending credit |
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relates to the effective and efficient use of resources for accomplishing organizational objectives
Ex. decisions related to budgeting, developing human resource practices, deciding on research practices and product improvements |
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relates to establishing organizational objectives and policies for accomplishing those objectives
Ex. decisions relating to setting financial and accounting policies, developing new product lines, and acquiring new businesses |
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Product differentiation strategy |
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entails adding features or services not provided by competitors to a product so you can charge customers a premium price |
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entails striving to be the most efficient producer of a product or service |
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Variety-based strategic position |
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involves producing or providing a subset of the industry's products or services
Ex. Jiffy lube only does oil changes |
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needs based strategic position |
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involves trying to serve most or all of the needs of a particular group of customers in a target market
Ex. AARP focuses on retirees |
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Access-based strategic position |
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involves serving a subset of customers who deffer from other customers in terms of factors such as geographic location or size, which creates different requirements for serving those customers
Ex. Edward Jones |
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where the entire system of organizational activities is greater than the sum of each individual part |
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uses data warehouses and complex algorithms to forecast future events, based on historical trends and calculated probabilities |
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1. Pressures 2. Opportunities 3. Rationalizations |
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Three conditions present when fraud occurs (the fraud triangle) |
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A person's incentive or motivation for committing fraud |
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the conditions or situations that allow a person or organization to: 1. Commit the fraud 2. Conceal the fraud 3. Convert the theft or misrepresentation to personal gain |
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Charge the stolen item to an expense account |
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A common and effective way to hide a theft |
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perpetrator steals the cash or check that customer A mails in to pay its accounts receivable. Funds received at a later date are used to pay off customer A's balance. Funds from customer C are used to pay off customer B, etc. |
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perpetrator creates cash by taking advantage of the timing lag between depositing a check and the check clearing the bank. |
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Rationalization
justification, attitude, lack of personal integrity |
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allows perpetrators to justify their illegal behaviors |
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