Lecture 3- The Information System: an Accountant’s Prospective :Today we will talk about systems. What is System, Elements of system, Characteristics of a System, An Artificial System’s Example and start our discussion about the Information System Framework.
Information system ,e commerce and accounting information system case study solutions course is being taught in many university at undergraduate level to BBA.BCOM. MCOM, MIT, and many other classes.
Similarly In this category we will provide you best handouts of AIS course , AIS and E commerce from best recommend books like James Hall.
Moreover Handouts will be the best source of preparation and learning.
What is system
System is very broader term which may refer any natural or artificial system. System do not mean any computer, programming or electrical device like entity. Natural system may be system of electrons, the solar system and system of galaxies. Artificial systems are man-made systems either in the form of machines , social systems and IS.
A System is a set of two or more interrelated and dependent components that interact to each other to achieve a goal. These components may be referred as a subsystem that performs a specific function important to and supportive part of the larger system.
Components/Characteristics of a system
- Multiple Components: A system must consist of more than one components or subsystems. For example a college system has many departments and subsystems.
- Relatedness: There must be a common objective/purpose to relate these sub systems and components. All these components must function independently but towards achieving a common goal. Any component which is not contributing in achieving the common goal, it must not be the part of system.
- System vs Subsystem : There must be clear distinction between system and subsystem. For us the terms are interchangeable, A system may be called subsystem when it will be viewed as the part of some larger system.
- Purpose : Every system must have at least one well defined objective to achieve.
System Decomposition
System Decomposition is the process of dividing the system into smaller subsystem parts. It provides us a convenient way of representing, viewing, and understanding a system. It defines and presents the relationships among subsystems. By decomposing a system, we can present the overall system as a hierarchy and view the relationships between subordinate and higher-level subsystems. Each subordinate subsystem performs one or more specific functions.
Figure 1 shows an automobile decomposed into four primary subsystems: the fuel subsystem, the propulsion subsystem, the electrical subsystem, and the braking subsystem. Moreover Each contributes in a unique way to the system’s objective, conveyance. However These second-level subsystems are decomposed fur-ther into two or more subordinate subsystems at a third level. Each third-level subsystem performs a task in direct support of its second-level system.
Figure 1: An Artificial System Example
Subsystem Inter-dependency
A system must be able to achieve its goal; it must depend on the effective functioning and pleasant interaction of its subsystems. However if a vital subsystem fails it will result in the failure of overall system. For example a PUMP System in the automobile system example. Moreover A non vital subsystem failure doesn’t result in the failure of overall system as failure Radio will not affect common goal.
Similarly like automobile designers, information system designers need to identify critical sub-systems, foresee the risk of their failure, and design cost-effective control procedures to alleviate that risk.
Information System Framework
Here is definition:
- The information system is the set of formal procedures by which data are collected, processed into information, and distributed to users.
- A combination of hardware, software, infrastructure and trained personnel organized to facilitate planning, control, coordination, and decision making in an organization.
Figure 2: Information system of a hypothetical manufacturing firm
Moreover Figure 2 shows the information system of a hypothetical manufacturing firm. However There might many AIS framework be found in literature. Here we can see that it is decomposed into two broad classes of systems: the (AIS) and the management information system (MIS). Moreover this framework could be used to define the position, domain and distinction of AIS from MIS. In most organizations MIS and AIS might be integrated to perform operations. An IS centers on Transactions.
A transaction as an event that affects or is of interest to the organization and is processed by its information system as a unit of work.
Similarly there are two types of Transactions Financial and non-financial Transactions.
- A financial transaction is an economic event that affects the assets and equities of the organization, is reflected in its accounts, and is measured in monetary terms. Moreover It must be recorded correctly .
- Non financial transactions are events that do not involve any economic value. For example, adding a new supplier of raw materials to the list of valid suppliers. However It has no legal obligation to process it correctly.
Transaction and I S
There are many functions of AIS. Similarly The functions offered by accounting information system are now available in many accounting information system software. Moreover You can use accounting information system software to accomplish or to complete your different accounting information system projects.
Recommended Books/resources by theITeducation.com :
- Accounting information system by James Hall
- http://www.slideshare.net/HabibUllahQamar/lecture-3-the-information-system-by-an-accountants-prospective2-ais-an-overview
