CAE 020 – Intro.

to
Accounting
Information
System
CHAPTER 1 – INTRODUCTION TO INFORMATION SYSTEM
BY: ROMAN B. VILLONES, MIT
Learning Objectives
• To differentiate the Data and Information
• To describe what is Information System
• To identify what are the Types of Information System
• To identify what are the Global Challenges in Information System
Data and Information
Data and Information
Data is a raw fact and can take the form of a number or statement such as a date or a
measurement. It is necessary for businesses to put in place procedures to ensure data are
recorded. Data is represented with the help of characters such as alphabets (A-Z, a-z), digits (0-
9) or special characters (+,-,/,*,<,>,= etc.).
Data and Information
Information is that it is data that have been processed so that they are meaningful (Oz and
Jones, 2008). This requires a process that is used to produce information which involves
collecting data and then subjecting them to a transformation process in order to create
information.
Data and Information
The Characteristics of valuable Information
◦ Accessible - Information should be easily accessible by authorized users so they can obtain it
in the right format and at the right time to meet their needs.
◦ Accurate - Accurate information is error free. In some cases, inaccurate information is
generated be because inaccurate data it fed into the transformation process.
◦ Complete - Complete information contains all the important facts.
◦ Economical - Information should also be relatively economical to produce. Decision makers
must always balance the value of information with the cost of producing it.
◦ Flexible - Flexible information can be used for a variety purposes. For example, information
on how much inventory is on hand for a particular part can be used by sales representative in
closing a sale.
Data and Information
The Characteristics of valuable Information
◦ Relevant - Relevant information is important to the decision maker. Information showing that
lumber prices might drop might not be relevant to a computer chip manufacturer.
◦ Reliable - Reliable information can be trusted by users.
◦ Secure - Information should be secure from access by unauthorized users.
◦ Simple - Information should be simple, not overly complex. Sophisticated and detailed
information might not be needed.
◦ Timely - Timely information is delivered when it is needed.
◦ Verifiable - This means that you can check it to make sure it is correct, perhaps by checking
many sources for the same information
Data and Information
Data Processing Cycle - is the re-structuring or re-ordering of data by people or machine to
increase their usefulness and add values for a particular purpose. Data processing consists of the
following basic steps - input, processing, and output. These three steps constitute the data
processing cycle.
Data and Information
◦ Input - In information systems, input is the activity of gathering and capturing raw data.
◦ Processing - Processing means converting or transforming data into useful outputs.
Processing can involve making calculations, comparing data and taking alternative actions,
and storing data for future use
◦ Output - Output involves producing useful information, usually in the form of documents and
reports.
What is an Information System?
An organized combination of people, hardware, software, communication networks, data and
procedures that stores, retrieves, transforms, and disseminate information in an organization.
What is an Information System?
◦ Hardware – computer equipment used to perform input, processing, storage, and output
activities
◦ Software – computer programs that govern the operation of the computer
◦ Database – organized collection of facts and information, typically consisting of two or more
related data files
◦ Telecommunication, networks, and the internet - consisting of thousands of interconnected
networks, all freely exchanging information
◦ Web – Network of links on the internet to documents containing text, graphics, video, and
sound
What is an Information System?
◦ Intranet – Internal network that allows people within an organization to exchange
information and work on projects
◦ Extranet – It is a network that allows selected outsiders, such as business partners and
customers, to access authorized resources of a company's intranet.
◦ People – the essential element in most computer-based information systems
◦ Procedures – include strategies, policies, methods, and rules for using a Computer-Based
Information System
What is an Information System?
Reasons why information system is needed:
◦ Growing size of the organization and the number of competitors
◦ Growing ability of computers to process large amount of data with great speed
◦ Dramatic increase in volumes of data generated
◦ Advances in communication technologies to permit faster data transmission
◦ Increase in pace of business transactions
◦ Much more sophisticated technology today
Types of Information System
◦ Transaction Processing System (TPS)
◦ Management Information System (MIS)
◦ Decision Support System (DSS)
◦ Office Automation Systems (OAS)
◦ Expert System (ES)
Types of Information System
Transaction Processing Systems (TPS) - Process large amount of data for routine business
activities or transactions. Very important for the organization since they gather all the input
necessary for other types of information systems

ATM Card Terminal

Types of Information System
Management Information Systems (MIS) - Provide a standard reports for managers about
transaction data. Work on the purposeful interaction between people and computers. Supports
a broader range of organizational tasks to include not only TPS but also decision analysis and
decision making. Managers, usually in a report format

Inventory Report

Management Report
Types of Information System
Decision Support Systems (DSS) - Designed to help organizational decision makers identify and
choose between options or decisions. Provides an interactive environment in which decision
makers can quickly manipulate data and models of business operations. Depend on a database
as a source of data

Logistic
Financial Analysis
Types of Information System
Office Automation Systems (OAS) - Support general office work for handling and managing
documents and facilitating communication. Aspects include word processing, spreadsheets,
desktop publishing, electronic scheduling, and communication through voice mail, email, and
video conferencing

Word Processing
Videoconferencing
Types of Information System
Expert Systems (ES) - Perform a task that would otherwise be performed by a human expert.
Designed to take the place of human expert, while others are designed to aid them. Are part of
a general category of computer applications known as Artificial Intelligence (AI)

Medical Diagnostic Artificial Intelligence

Global Challenges in Information
System
◦ Cultural and language challenges
◦ Time and distance challenges
◦ Infrastructure challenges
◦ Currency challenges
◦ Product and service challenges
◦ Technology transfer issues
◦ State, regional, and national laws
◦ Trade agreements
Learning Outcomes
• Are you able to differentiate the Data and Information?
• Are you able to describe what is Information System?
• Are you able too identify what are the Types of Information System?
• Are you able to identify what are the Global Challenges in Information System?
Questions?