Topic 1 Questions
1) What’s the difference between data and information? Give an example. (Romney)
- Data are facts collected and stored, facts that are produced from events, places, and
people. data in itself, is merely just truth and it does not cause action. Information on the
other hand is data that has been processed and organized, in such a way that the data,
after providing context and relevance, will cause an action that is important in decision
making. For example, a purchasing agent receiving a report, showing that the current
inventory level has reached a reorder point is prompted to make an order. Current
inventory levels are data, but because it prompted the purchasing agent to order, the
data becomes information.
2) Describe the three levels of data hierarchy. Give example for each. [ARF]
- Attribute - the most elemental piece of useful data, representing a single
characteristic of an entity (I.e. Customer account number, customer address, or credit
limit).
- Record - A complete set of attributes for a single instance or occurrence within an
entity class (I.e. Accounts receivable record for one specific customer)
- File - A complete set of records of an identical class (I.e. entire AR File, or Inventory
File or an AP File)
3) Describe the five characteristics that make information useful and meaningful?
(Hall) [RTACS]
- Relevance - the information must serve a purpose
- Timeliness - related with relevance, the information must not be too old to serve its
purpose
- Accuracy - information must be void of errors as information are important in decision
making
- Completeness - the information must not leave stones unturned, using every
essential data to present a clear message
- Summarization - the data must be able to cater details (of summarization) to
corresponding users. Highly detailed information is for lower-level management while
highly summarized information is for top management.
4) What are the 14 characteristics that make information useful and meaningful?
(Romney)
- Access Restrictions
- Accurate
- Available
- Reputable
- Relevant
- Complete
- Concise
- Consistent
- Current
- Objective
- Timely
- Usable
- Understandable
- Verifiable
[A.A.A.][R.R.][C.C.C.C.][OT][UUV]
5) How does information flow within the Organization?
Horizontal flow: supports the day to day operations and coordination across different
department
Vertical flow: Distributes information downwards from senior management to junior
managers and operations personnel and it also flows upwards.
Horizontal flow - supports operations-level tasks with highly detailed information
about many business transactions affecting the firm.
Vertical flow - distributes information downward from senior managers to junior
managers and operations personnel in the form of instructions, quotas, and budgets.
Summarized information pertaining to operations and other activities flows
upward to managers at all levels.
6) Describe the organizational structure in terms of information.
Top management is responsible for planning and setting organizational objectives.
Middle management - Responsible for short term planning and coordinating activities
to achieve organizational objectives.
Operations management/personnel - responsible for day-to-day operations.
7) Who are the user groups in the flow of information? Give the type of information
each needs.
- Information users are categorized as External users and Internal users. External
users like Creditors, stockholders, government agencies or authorities,
require highly aggregated or summarized financial statements.
Internal users like managers from all organization levels and personnel need
highly detailed information tailored to their specific needs.
8) What is a system? (Hall) Give the two types of system with examples.
- According to Hall, a system is a group of two or more interrelated
subsystems that serves a common purpose. And the two types of
subsystems are (1) Natural systems and (2) Artificial (Man-made)
systems. Natural systems are those systems that occur naturally, for
example in plants, we have photosynthesis, whose purpose is to turn
sunlight into food. Artificial systems are those made by man, so we have
traffic light systems whose goal is to manage the flow of vehicles on the
road.
9) Describe the 4 elements of a system.[Mc,R,Ss,P]
(1)Multiple components - a system must consist of more than one part.
(2)Relatedness - all parts must serve a common objective.
(3)System vs subsystem - when we focus on the analysis of a subsystem, it
is a system in itself.
(4)Purpose - a system must serve at least one purpose.
10) What is the difference between system decomposition & subsystem
interdependency?
System decomposition - it is the DECOMPOSITION of the system of its consisting
subsystems. Dividing a complex system into smaller subsystems for analysis, allowing
us to see the relationships between a hierarchy.
System interdependency - interdependency means that the overall success of a
system depends on the effectiveness of the functioning and relationship between the
subsystems, creating a harmonious process and interactions. A vital subsystem may fail
and it can bring down a whole system.
11) What is a system according to Romney? Explain the goals involved in this
definition.
- According to Romney - a system is a set of detailed methods, procedures,
and routines that carry out specific activities, perform a duty or solve one
or more problems.
- Goal congruence - this occurs when a subsystem successfully achieves
its goals and contributes the overall system
- Goal conflict - this occurs when a subsystem achieves its goal but in the
expense of another subsystem or inconsistent with another subsystem.
12) What is an information system according to Romney? Describe the components
of the information system and give examples for each.
- According to Romney, an information system is defined as the combination of the
people and technologies in an organization to collect, record, store, and process
data to produce the information needed for decision making. [CRSPd]
- The components are:
(1)People (users)
(2)Procedures and instructions (methods of collection data)
(3)Data (data about the inventories)
(4)Software (Accounting software)2
(5)Information technology infrastructure (which is the IT
department, and the components involved like computers,
peripherals and networks.
(6)Internal controls and security measures (Anti-Virus software)
[P][P][D] [S][I][IC]
13) What are the three fundamental information system objectives common to all
systems?
1) To support the stewardship function of management
2) To support management decision making
3) To support the firm’s day-to-day operations.
14) Describe the two acquisition methods used in the information system. Discuss
each method.
- Purchasing commercial software: which is buying systems already made and
is ready to be customized for the specific needs of a business or an industry. This
includes Turnkey systems and vendor-supported systems.
- In-house development, which developing your own system with in-house
activities