CHAPTER 1 – AIS and the Accountant

Accounting Information System – collection of data and process procedures that creates needed
information for its users.
Data – raw facts about events
Information – useful or meaningful data
Audit trail – the path that data follows as they flow through an AIS.
Information overload – too much information, too much trivial information, overwhelm the users, and
causing relevant information to be lost or overlooked
Enterprise resource planning (ERP) system – software packages that integrate their information
subsystems into one application.
Predictive analytics – include a variety of methodologies that managers might use to analyze current and
past data to help predict future events.
Knowledge workers – fewer workers actually make products while more of them produce, analyze,
manipulate, and distribute information about business activities.
E-business – conducting business over the Internet or dedicated proprietary networks.
E-commerce - a subset of e=business which refers mostly to buying and selling on the Internet.
Cloud computing – is a way of business applications over the Internet
Sustainability reporting – focuses on nonfinancial performance measures that might impact on
organization’s income, value or future performance.
Forensic accounting – combines the skills of investigation, accounting, and auditing to find and collect
pieces of information that collectively provide evidence that criminal activity is in progress or has happened.
Financial accounting information system – objective is to provide relevant information to individuals and
groups outside an organization’s boundaries.
REA accounting – the idea of also storing important nonfinancial information about resources, events, and
agents in databases precisely because they are relevant to the decision-making process of their users.
Interactive data – are data that can be reused and carried seamlessly among a variety of applications or
reports.
Balanced scorecard – measures business performance in four categories: financial performance, customer
knowledge, internal business processes, learning and growth
CHAPTER 2 – Information Technology and AIS

Peripheral Equipment – surround the computer and help it process data.

Source document – starting point for collecting accounting data in many AISs
Optical character recognition – uses optical, rather than magnetic, readers to interpret the data found on
source documents
Turnaround documents – documents that are initially prepared by a company, then sent to individuals, and
finally returned to the organization for further data processing.
Primary memory – store data and program instructions temporarily for immediate processing and execution.
Computer record – collection of information about one file entity.
Data communication – refers to transmitting data to and from different locations.
Client/server computing – an alternative technology to mainframe and/or hierarchical networks.
Wireless communications (Wi-Fi or wireless fidelity) – means transmitting voice-grade signals or digital
data over wireless communication channels.
Computer software – serve as a base, or platform, upon which two types of computer software typically
residue: operating systems and application software
Operating system – set of software programs that helps a computer, file server, or network run itself and
also the application programs designed for it.
Utility programs – come with operating systems that help users perform tasks such as copying files,
converting files from one format to another, compressing files, performing system diagnostics and building
disk directories.
Virtual storage – disk memory that a computer system uses to augment its limited primary storage.
Virus – destructive program that, when active, damages or destroys computer files or programs.
Application software – refers to computer programs that help end users such as accountants perform the
tasks specific to their jobs or relevant to their personal needs.
Chapter 3 – Data Modeling
Database – is a large collection of organized data that can be accessed by multiple users and used by many
different computer applications.
Data – first level in the data hierarchy.
Record – stores all the information about one entity.
Master files – typically store permanent information.
Transaction files – typically store transient information.
Primary key – is the data field in each record that uniquely distinguishes one record from another in a
database table.
Metadata – data about data.
Transaction controls – ensure that database system performs each transaction accurately and completely.
Data modeling – design the database
Business events – do not affect financial statements but can affect important aspects of an organization.
Entities- objects of interest that are contained in a database.
Cardinality – describes how entities are related
Normalization – methodology for ensuring that attributes are stored in the most appropriate tables and that
the design of the database promotes accurate and non-redundant storage of data.
Chapter 4 – Organizing and Manipulating the Data in Databases

Input masks – limit users to particular types of data in specific formats.

Default value – third control over the accuracy of data entry
Dynaset – dynamic subset of a database that you create with queries.
Data Manipulation language (DML) – help you create such dynaset.
Data mining – which means using a set of data analyses and statistical tools to detect relationships, patterns,
or trends among stored data.
Data warehouse – large, common body of information

Chapter 5 – Database Forms and Reports

Form – custom-designed screen for entering records or displaying existing records.
Bound controls – are textboxes, drop-down boxes, and similar controls that depend on the underlying data
and therefore change from record to record.
Unbound controls – labels, pictures, and similar items that are consistent from record to record in a form
and do not display underlying database information.
Subform – is a form within a form that displays data related to the information in the main form.
Control break – technical term for the point at which a group changes from one type to the next in a report.
Chapter 6 – Documenting AIS
Documentation – includes the flowcharts, narratives, and other written communications that describe the
inputs, processing, and outputs of an AIS.
9 reasons why documentation is important to AIS:
1. Depicting how the system works.
2. Training users.
3. Designing new systems.
4. Controlling system development and maintenance costs.
5. Standardizing communications with others.
6. Auditing AISs.
7. Documenting business processes.
8. Complying with the Sarbanes-Oxley Act.
9. Establishing accountability.
Data flow diagrams – a tool for analyzing an existing system or as a planning aid for creating a new system.
Decomposition – the task of creating detail
Document flowchart – traces the physical flow of documents through an organization.
System flowcharts – concentrate on the computerized data flows of AISs.
Business process – is a natural group of business activities that create value for an organization.
Process maps – document business processes in easy-to-follow diagrams.
Structured programming – techniques that create large programs in a hierarchical fashion, that is, from top
to down
Program flowcharts – outline the processing logic of computer programs as well as the order in which the
processing takes place.
Decision table – table of conditions and processing tasks that indicates what action to take for each
possibility.
End-user computing – refers to the ability of non-IT employees to create computer applications of their
own.
Chapter 7 – AIS and Business Processes: Part 1

Numeric codes – codes that use numbers only

Alphanumeric codes – codes that use numbers and letters
Mnemonic codes- help the user remember what they represent.
Sequence code – a sequential set of numbers used to identify customer accounts, employee payroll checks,
customer sales invoices,
Block codes – are sequential codes in which a specific blocks of numbers are reserved for particular uses.
Group code – combining two or more subcodes, often used as product codes in sales catalogs
Exception report – list of exceptional conditions
Business process – collection of activities and work flows in an organization that creates value.
Customer relationship managements (CRM) software – gather, maintain, and use customer data to
provide customer service and enhance customer loyalty.

Chapter 8 – AIS and Business Processes: Part 2

Human resource (HR) management activity – includes the personnel function, which is responsible for
hiring or laying off employees.
Job costing information system – keeps track of specific costs with each product or group of products
called a job.
Process costing information system – averages to calculate the costs associated with goods in process and
finished goods produced.
Financing process – describes how a company acquires and uses financial resources such as cash, other
liquid assets, and investments.
Electronic funds transfer – eliminate paper documents and instead transfer funds electronically.
Business process reengineering – redesigning business processes that are no longer efficient or effective.