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`Provides internal management with
special--purpose financial reports and
special
information needed for decision making
such as budgets, variance reports, cost-
cost-
volume--profit analysis and responsibility
volume
reports.
 a

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¦he elements of the general model are:

`Ônd Users
`Data Sources
`Data Collection
`Data processing
`Database management
`Information generation and
`Feedback
¦





 Ô

Ônd users fall into two general groups
groups:: external and internal.
internal.
Ôxternal users include
include::
`Creditors
`Stockholders
`Potential investors
`Regulatory agencies
`¦ax authorizes
`Suppliers
`Customers
Internal users include
include::
`Management at every level of the organization, as well as operations personnel

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Data sources are financial transactions that enter the information system from internal and
external sources
sources..
Ôxternal financial transactions are the most common source of data for most organizations.
organizations.
Ô.g., sale of goods and services, purchase of inventory, receipt of cash, and disbursement of cash (including
payroll)..
payroll)
Internal financial transactions involve the exchange or movement of resources within the organization.
organization.
Ô.g., movement of raw materials into work-
work-in
in--process (WIP), application of labor and overhead to WIP,
transfer of WIP into finished goods inventory, and depreciation of equipment.
equipment.


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Functions for transforming data into information according to the
general AIS model:
model:
1. Data Collection
2. Data Processing
3. Data Management
4. Information Generation


 -  


 
`Is the first operational stage in the information system.
system.
`¦he objective is to ensure that event data entering the system are valid,
complete and free from material errors.
errors.
`¦he most important stage
`¦wo rules govern the design of data collection procedures:
procedures: relevance
and efficiency
efficiency..

 
 

 
D 

`ånce collected, data usually require

processing to produce information.
information.
Ôxample
Merging Classifying
¦ranscribing
Calculating Sorting
Batching
Summarizing
Comparing

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`¦he organization͛s database is its
physical repository for financial and
nonfinancial data.
data.
`It can be a filing cabinet or a computer
disk..
disk
Storing
Retrieving
Deleting 
 [ 
  

`¦he organization͛s database is its
physical repository for financial and
nonfinancial data.
data.
`It can be a filing cabinet or a computer
disk..
disk
Storing
Retrieving
Deleting
-

  



 
 

Regardless of physical form or technology, useful information has the following
characteristics::
characteristics
Relevance:: serves a purpose
Relevance
¦imeliness:: no older than the time period of the action it supports
¦imeliness
Accuracy:: free from material errors
Accuracy
Completeness:: all information essential to a decision or task is present
Completeness
Summarization:: aggregated in accordance with the user͛s needs
Summarization

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`Is a form of output that is sent back to the system as a
source data
data..
`It may be internal or external and is used to initiate or
alter a process.
process.
Ôxample::
Ôxample
An inventory status report signals the inventory control
clerk that items of inventory have fallen to, or below,
their minimum allowable levels.
levels.
Internal feedback from this information will initiate the
inventory ordering process to replenish the inventories.
inventories.
Ôxternal feedback about the level of uncollected
customers accounts can be used to adjust the
organization͛s credit-
credit-granting loan policies -D
  
 
 


    


¦he goal of an information system is to support
1. the stewardship function of management
Stewardship refers to management͛s responsibility to properly
manage the resources of the firm
2. management decision making
3. the firm͛s day
day--to
to--day operations

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