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• 1 The Information System: An Accountant's Perspective

• 1.1 The information Environment

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• What are the business operations?

  The activities consist of the product oriented work of the organization, such as manufacturing, sales and distribution.

• How does information flow within the organization?

  Horizontally, vertically and exchanges between the organization and users in the external environment.

• What is the horizontal information flow?

  Horizontal flows support operations=level tasks with highly detailed information about the many business transactions affecting the firm. 

• What is the vertical information flow?

  The vertical flow distributes information downward from senior managers to junior managers and operations personnel in the form of instructions, quotas, and budgets. In addition, summarized information pertaining to operations and other activities flows upward to managers at all levels. 

• What is the external environment information flow?

  This represents exchanges between the organization and external users, i.e. trading partners and stakeholders.

  Exchanges with trading partners include customer sales and billing information, purchase information for suppliers and inventory receipts information. Stakeholders are entities outside (or inside) the organization with a direct of indirect interest in the firm.

• What are the criteria of a system?

  It has to have multiple components, relatedness and purpose.

• What is of particular importance to the study of information systems?

  System decomposition and subsystem interdependency

• What is system decomposition?

  Decomposition is the process of dividing the system into smaller subsystem parts. By composing a system, we can present the overall system as a hierarchy and view the relationships between subordinate and higher-level subsystems.

• What is subsystem interdependency?

  A system's ability to achieve its goal depends on the effective functioning and harmonious interaction of its subsystems. If a vital subsystem fails or becomes defective and can no longer meet its specific objective, the overall system will fail to meet its objective.

• In which two broad classes of systems are informations systems decomposed?

  Accounting information systems and management information systems