Information Technology

and Networks

Haryono, MCom, Akt.

FE UGM

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 Importance of IT and Computer
Networks to Accountants

 To use, evaluate, and develop a modern AIS,

accountants must be familiar with IT
 Computers enable accountants to perform their
duties more quickly, accurately, and
consistently than by manual methods
 Software such as electronic spreadsheets aid
accountants in analyzing financial statements
and in developing budgets

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 IT Components of Interest to
Accountants
 Devices for data entry
 Data Processing
 Data Communication
 Output devices
 DataBases
 Data Modeling concepts
 Evaluation of internal controls in AIS
 Variety of software packages
 Computer Networks
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 Networks & Accountants

 Because they transmit data and information,

networks are an integral part of AIS
 Networks are vulnerable to high level risk thus
requiring special controls and security measures
– Need to prevent loss of accounting records &
information
– Need to ensure accuracy of data
 Networks may be used to consolidate data into
financial information

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Gains from IT for Accountants

 Faster processing of transactions and other data

 Greater accuracy in computations of and
comparisons with data
 Lower cost of processing each transaction
 More timely preparation of reports and outputs
 More concise storage of data, with greater
accessibility when needed
 Wider range of choices for entering data and
providing outputs
 Higher productivity for employees and managers,
who learn to use computers effectively
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 Task Matching to Computers
 Manual
 Exceptional/infrequent
transactions
 Setting objectives and policy-
making judgments
 Supervising employees
 Social communications
 Making complex strategic
decisions
 Computerized
 Collecting and processing large
volumes of routine transactions
 Monitoring and controlling
continuous processes
 Storing large quantities of data
and information
 Answering specific inquiries
based on stored data
 Preparing complex analyses and
extensive reports
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 Types of Network Architectures
 Wide-Area Networks
– Formed among computers and inter-
connected devices that are geographically
distant from one another
 Local-Area Networks
– A type of distributed network created when
two or more linked computers are grouped
within a limited geographical area

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 Centralized WANs - 1

 Concentrates all application processing at one geographical

location
 Consists essentially of one central mainframe computer and
one or more physically remote terminals
 Typically all hardware, software, and data processing
personnel are located at corporate headquarters
 Advantages include:
– the concentrated computing power of a large processor
– low operating costs per transaction leading to economies of scale
– can facilitate the use of a database approach
– facilitate better security provisions
– allow for greater standardization and professional planning and
control of information-related activities
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 Centralized WANs - 2
 Best suited for:
– Firms with centralized organizational structures
– Firms with homogeneous operations
– Firms with low processing activity at remote sites
 Examples include
– Banks with many ATMs and branches
– Merchandizing chains
– Motels
– Airlines
 Drawbacks include
– Inflexibility
– Expensive and complicated software needed
– Vulnerable to disasters as a result of complete dependence on
central computer
– Not user-friendly
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 Distributed WANs - 1

 This links fully functional computers in

different geographical locations.
 Each remote site processes its own
applications. However, users may not have
easy access to centralized data or be able to
transmit data and information rapidly.
 Computers may be interconnected by data
communications hardware and software to
other remote sites and to a central computer
facility to form an “enterprise-wide” network.

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 Distributed WANs - 2

 Distributed databases are useful when:

– Large volumes of data need to be processed at remote locations
– Managers and employees need very fast access to data on a
frequent basis

 Databases may be distributed by replication or

partition
– Replication: Copies of files from the main data base are stored
at remote locations
– Partition: Segments of files are allocated to various locations
within the network
 This avoids data redundancy, but increases the complexity of
transmitting data throughout the network
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 Benefits of Distributed WANs
 Can be responsive to diverse needs of users
 Enable network facilities to be used efficiently since
processing jobs can be routed to unused computer
systems in the network
 Are robust against individual computer failures
 Flexible and adaptable to change
 Best suited for firms with:
– Decentralized organizational structures
– Diverse operations or user groups
– Clustered functions at various locations
– Multiple products
– Manufacturing operations
– A variety of services
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Drawbacks of Distributed WANs
 Difficulty in maintaining adequate control and
security
– Each distributed processing location needs its own set
of controls and security measures
 Managers may sacrifice control and security for
greater productivity
 Difficulty and cost of coordinating the relatively
independent and sometimes incompatible
computer systems
– Added costs for multiple computers, other system
components, and communication services

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 LANs

 A LAN may be connected to other LANs

and/or WANs via hardware devices known
as gateways or bridges
 At the heart of a LAN is the workstation
– Dumb workstation
– Intelligent workstation

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 Peer-to-Peer LANs

– In smaller LANs, every workstation

functions as both a client and a server
– This allows all users to share data and files on all
workstations
– Compared to a server network, peer-to-peer
networks are less costly, easier to install
– Number expected to significantly increase in the near
future

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 Server Networks

 May interconnect hundreds of workstations

 More difficult to manage than peer-to-peer networks
 Provide greater security than peer-to-peer networks
 At least one workstation is dedicated to performing
specific server tasks
 Examples include:
– Servers
– Database servers
– Print servers
– Communications servers
– Transaction processing servers
 Large server networks often contain multiple servers
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 The Network Operating
System
 In peer-to-peer networks, the Network Operating
Software (NOS) is installed in each user workstation
 In a server network, most of the NOS is installed in the
file server and a portion also resides in each workstation
 To run centralized LAN applications, the NOS installed in
the file server interacts with the NOS and the local
operating system installed in the workstation.
 In a peer-to-peer network, a client NOS initiates a
request to another client NOS, which also functions as a
server, to load the requested files and/or programs into
RAM

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Client/Server Networks

 This model splits data processing between

a user workstation (client) and one or
more servers
 Majority of servers are dedicated database
servers, thereby enabling client to share
data and files, conduct database searches,
and update the database
 One of the fastest growing segments of IT
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Client/Server Networks
Functions of the Computer Systems

Mainframe
Large Servers

Client Systems Servers

• Functions: • Functions: • Functions: Central
Provide user Shared database control,
interface, perform computation, security, directory
some/most application management,
processing on an control, heavy-duty
application. distributed processing.
databases.
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 Network Topologies

 The STAR and RING topologies apply to

both distributed WANs and LANs
 The BUS topology applies only to LANs
 All three found in client/server networks
 All three may be combined to form hybrid
configurations

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The STAR Configuration

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The RING Configuration

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The BUS Configuration

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 Enterprise-wide Processing and
Data Systems

 Enterprise-wide on-line transaction processing

systems collect and process mission-critical
accounting and operational applications
 Enterprise Resource Planning Systems (ERP) such as
SAP R/3 overcome the limitations of legacy
applications
 Firms typically develop two types of On-line Analytical
Processing (OLAP) systems that supplement ERP
– Firms can create a data mart or data warehouse
to generate predefined reports for executives and
other managers
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 Data Marts and Data
Warehouses

 Both Data Marts and Data Warehouses organize and

store copies of “informational” or decision support
data
 A Data Mart stores copies of decision support data
in a data base for a portion of a company
 A Data Warehouse stores copies of decision support
data in an integrated data base for an entire
enterprise
 Both have “drill down” and “data mining” features

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 Specialized Inter-organizational
Systems/Networks
 Point-of-Sale Systems/Networks
 Electronic Funds Transfer (EFT) Systems
 Electronic Data Interchange (EDI) Systems
– Value Added Networks (VANs)
 The Internet (TCP/IP)
– The World Wide Web (WWW)
 Intranets
 Extranets
 Electronic Commerce
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Peranan e-Business in Business
The Internet Suppliers and Other Extranets
Business Partners Company
Boundary
Supply chain management:
Procurement, Distribution, and Logistics

Intranets
Engineering and Manufacturing Accounting and
Research and Production Finance

Intranets
Customer relationship management:
Marketing Sales Customer Service

Extranets Consumers and

Business Customers
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SUPPLY-CHAIN MANAGEMENT

ORDER PLANNING &

CUSTOMERS PROCESSING FORECASTING SUPPLIERS

PROCUREMENT
ACCOUNTING INTRANET

PRODUCTION

LOGISTICS
SHIPPING INVENTORY DISTRIBUTORS
SERVICES

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