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Chapter 1

AFM341 Chapter 1: AIS Overview

Accounting & Financial Management
Course Code
Alec Cram

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Chapter 1 - Accounting Information Systems: An Overview
System - two or more interrelated components that interact to achieve a goal, often composed of
subsystems that support the larger system
Goal conflict - when a subsystem's goals are inconsistent with the goals of another subsystem or
the system as a whole
Goal congruence - when a subsystem achieves its goals while contributing to the organization's
overall goal
o Larger the organization and the more complicated the system, the more difficult it is to
achieve goal congruence
Data - facts that are collected, recorded, stored, and processed by an information system (activity
that took place, resources and people involved)
Information - data that have been organized and processed to provide meaning and improve
decision making
Information overload - exceeding the amount of information a hum mind can absorb and process,
resulting in a decline in decision-making quality and an increase in the cost of providing
Information technology (IT) - the computers and other electronic devices used to store, retrieve,
transmit and manipulate data
o Helps decision makers filter and condense information
Value of information - the benefit provided by information less the cost of producing it
o Benefits: reduced uncertainty, improved decisions, improved ability to plan and schedule
o Costs: time and resources spent to produce and distribute the information
Information Needs and Business Processes
Business process - a set of related, coordinated, and structured activities and tasks, performed by
a person, a computer, or a machine, that help accomplish a specific organizational goal
Must decide:
o What decisions need to be made
o What information is needed to make the decision
o How to gather and process the data needed to produce the information
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