Chapter 1

Chapter 1

[Central Theme of AIS] - You must know a business organisation’s objectives to understand that business as a system and to understand the actions and interactions of that business’s components or subsystems.

System – A set of interdependent elements that together accomplish specific objectives. It must have organization, interrelationships, integration, and central objectives.

Subsystem – The interrelated parts that have come together, or integrated, as a single system.

Information System – Man-made system that generally consists of an integrated set of computer-based components and manual components established to collect, store, and manage data and to provide output information to users.

Accounting Information System – Specialised subsystem of an information system designed to produce understandable, predictive, neutral, comparable, accurate and complete information efficiently and effectively for accountants.

- IS can be crucial to an organisation’s success by facilitating day-to-day operations processes and by providing useful information for the organization’s management. [16] It is important to an organization as it facilitates operational functions and supports management decision by providing information that managers can use to plan and control the activities of the firm. It can also use decision models to present output information for decision making.

Components

Organization – needed to show sustain the hierarchy of each system and subsystems.

Interrelationships – needed to show how each subsystem relates to another. It shows what parts can work with others and which can’t.

Integration – allows the four interrelated parts to come together as a single system.

Central Objectives – needed to understand the aims of a business as a system and the actions and interactions of that business’s components/subsystems.

Important Functions

- It serves two important functions: one, it mirrors and monitors actions in the operations...