Directions: Research the following topics:

A. Accounting Information System (AIS)

➔ According to AccountingEdu.org, an information system is a formal
process for collecting data, processing the data into information, and
distributing that information to users.

◆ Purpose of AIS: To collect, store, and process financial and

accounting data and produce informational reports that managers
or other interested parties can use to make business decisions.

➔ In simple terms, Accounting Information System or AIS collect, store, and

process financial and accounting information and data to be used in the
decision making of the users.

B. Functions of AIS

(1) Efficiency and Effectivity in Collecting and Storing data

➢ First function of AIS: Efficient and effective collection and storage
of data concerning an organization’s financial activities, including
getting the transaction data from source documents, recording the
transactions in journals, and posting data from journals to ledgers.

(2) Supply useful information

➢ Second function of AIS: To supply information useful for strategic
planning and decision-making, including producing managerial
reports and financial statements.

(3) Accurate recording and processing data

➢ Third function of AIS: to make sure controls are in place to
accurately record and process data.

C. Part of AIS

Accounting Edu - AIS has 6 basic parts:

(1) People who use the system, including accountants, managers, and
business analysts
 (2) Procedure and instructions are the ways that data are collected,
stored, retrieved, and processed

(3) Data including all the information that goes into an AIS

(4) Software consists of computer programs used for processing data

(5) Information technology infrastructure includes all the hardware

used to operate the AIS

(6) Internal controls are the security measures used to protect data

D. Data VS. Information

Data
➔ It is raw, unorganized, unanalyzed, uninterrupted, and unrelated
used in different contexts.

➔ A collection of details or data remaining in the form of either

figures, texts, symbols, descriptions, or mere observations of
entities, events, or things with a potential to be analyzed and drawn
inferences from.

Information
➔ It is systematic, filtered, and useful.

➔ A data collated to derive meaningful inferences according to its

contextual requirement.

◆ It is structured, processed, and presented with assigned

meaning that improves the reliability of the data acquired.

E. IPO Model
➔ Input-Process-Output Model or IPO is an approach in systems analysis
and software engineering for describing the structure of an information
processing program or another process. (eng.libretext.org)

◆ A computer program that uses IPO model divides the work into
three categories:

(a) Requirement from the environment [Input]

 (b) Computation based on the requirement [Process]
(c) Provision for the environment [Output]

F. Database
➔ In the article of Binus University, Database is an organized collection of
structured information, or data, typically used to store information on
people, places, or things in a computer system.

◆ It organizes the collection of files within the context of some

applications which require persistent storage and online access.

➔ According to geeksforgeeks.org, database is an organized collection of

data stored in a computer system and usually controlled by a database
management system (DBMS).

G. Importance of database

❖ Store and organizes data

➢ Databases store essential data, which is valuable information for a
company and helps in the decision-making process.

❖ Help in manipulate and analyze large amounts of data

➢ Databases help accounting information systems manipulate and
analyze large amounts of historical data, which helps businesses
uncover valuable insights within their financials, identify process
improvements that can increase efficiency, and better manage risk.

❖ Keep track of information

➢ Databases can hold a million historical records of customers, which
is important for businesses. The structure is typically programmed
with query language, which allows users to manipulate the table
and data.

❖ Security Protection
➢ Accounting information that is stored in databases is often highly
secured platforms with preventative measures against viruses,
hackers, and other external sources.

H. Data Hierarchy
➔ It is a way of organizing data in a structured manner so it can be easily
accessed, managed and updated.

➔ A series of ordered groupings in a system, beginning with the smallest

unit to the largest:

(1) Bit - The smallest unit of data in a computer, representing either 0

or 1

(2) Byte - A collection of 8 bits, which can represent a single character

or number in a computer system.

(3) Field - A specific piece of data within a record, such as a name,

address, or phone number.

(4) Record - Collection of related fields, such as all the fields that make
up a single customer’s information.

(5) Table - Collection of records that have a similar structure, such as a

table of customers or a table of orders.

(6) Database - A collection of tables that are related to each other in

some way, such as a database of customer information or a
database of sales data.
I. Database Models
➢ It is a method for organizing databases on the logical level, the level of the
schema and subschemas.

○ The main concern in such a model is how to represent relationships

among database records.

(1) Hierarchical database

➔ Represents data as a hierarchical tree structure.
◆ Tree-like structure, with a single root, to which
all the other data is linked.

◆ Hierarchy starts from the Root data, and expands like

a tree, adding child nodes to the parent nodes.

◆ In this model, a child node will only have a single

parent node.

➔ Data is organized into a tree-like structure with a

one-to-many relationship between two different types of
data

(2) Network database

➔ An extension of hierarchical model

➔ Represents data as record types.

◆ In this model, data is organized more like a graph,
and allowed to have more than one parent node

◆ Data is more related as more relationships are

established in this database model. Hence, accessing
the data is also easier and fast.

➔ This model also represents a limited type of one to many

relationship called a set type

(3) Object-oriented database

➔ Data is stored in the form of objects.

(4) Relational database

 ➔ Represents data as relations, or tables.
◆ In this model, data is organized in two-dimensional
tables and the relationship is maintained by storing a
common field.

(5) Cloud database

➔ A collection of organized or unorganized data that is housed
on a private, public, or hybrid cloud computing platform is
known as a cloud database.

◆ Cloud database models come in two flavors:

traditional and database as a service (DBaaS).

(6) Data Warehouse

➔ It is a sort of database created especially for quick query and
analysis.

➔ It is a central repository for data.

(7) Distributed database

➔ It is made up of two or more files that are spread across
multiple locations.

◆ The database could be dispersed across many

networks, housed in one physical place, or kept on
several computers.

(8) Graph Database

➔ Data is stored in a graph database using entities and their
relationships.

(9) NoSQL database

➔ Data is stored as documents.
◆ It supports an unstructured style of storing data.

◆ It provides a flexible schema.

 ◆ It does provide features like indexing, relationships
between data, etc.

➔ The support for data querying is limited in the NoSQL

database model.

** Highlighted models are the common database model

References:

● https://www.accountingedu.org/accounting-information-systems/
● https://www.analytixlabs.co.in/blog/difference-between-data-and-information/
● https://eng.libretexts.org/Bookshelves/Computer_Science/Programming_and_
Computation_Fundamentals/
● https://sis.binus.ac.id/2023/08/16/why-are-databases-important-for-accountin
g-information-systems/
● https://www.geeksforgeeks.org/what-is-database/
● https://curiousdesire.com/reasons-why-database-is-important/
● https://ecampusontario.pressbooks.pub/informationsystemscdn/chapter/5-5-da
ta-hierarchy/
● https://databasetown.com/hierarchy-of-data-in-a-database/
● https://www.studytonight.com/dbms/database-model.php
● https://opentextbc.ca/dbdesign01/chapter/chapter-4-types-of-database-models/
● https://www.learntek.org/blog/types-of-databases/
● https://www.umsl.edu/~joshik/msis480/chapt06.htm