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Lecture 3- The Information System: an Accountant’s Prospective

Part 2Habib Ullah Qamar

Govt. college of Commerce Gujranwala

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Information levels Information Flow Stakeholders Information is a vital asset of an

organization.

Review of Last Lecture

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What is System Elements of system Characteristics of a System An Artificial System’s Example Information System Framework

Today’s Topic

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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.

What is system

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Multiple Components : A system must consists of more than one components or subsystems.

Relatedness: All these components must be related to each other to serve a common objective.

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.

Characteristics of a System

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An Artificial System Example

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Decomposition is the process of dividing the system into smaller subsystem parts.

convenient way of representing, viewing, and understanding

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 .

System Decomposition

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effective functioning and harmonious interaction of its subsystems

Vital subsystem fails results in the overall system will failure. (PUMP System)

Non Vital subsystem failure don’t result in the failure of overall system. (Radio)

Subsystem Interdependency

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The information system is the set of formal procedures by which data are collected, processed into information, and distributed to users. or

A combination of hardware, software, infrastructure and trained personnel organized to facilitate planning, control, coordination, and decision making in an organization.

Information System Framework

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Information system of a hypothetical manufacturing firm

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In Previous Figure we saw two broad categories of information systems to emerge into An Information System.

AIS and MIS This framework could be used to define the

position, domain and distinction of AIS from MIS

AIS vs MIS

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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

There are two types of Transactions Financial and non-financial

AIS vs MIS

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Transaction and AN IS

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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.

It must be recorded correctly

Nonfinancial 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.

It has no legal obligation to process it correctly.

Financial vs Non Financial Transaction

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We start with review of Information We define system and its characteristics We discussed a framework for an IS AIS and MIS are identified on the basis of

Transactions.

What we learn today

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Thank you , take careSee you again in sha ALLAH