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Summary Information Systems and Data Analytics
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INFORMATION SYSTEMS AND DATAANALYTICS 2024-2025
Table of contents
Lecture 1 – Introduction..................................................................................2
Chapter 1 – accounting as information............................................................................2
Lecture 2 – Risk and control............................................................................7
Chapter 2 – risk and risk assessments.............................................................................7
Chapter 3 – risk management and internal control..........................................................9
Lecture 3 – Software and data.......................................................................15
Lecture notes................................................................................................................ 15
Chapter 4 – software and systems.................................................................................16
Chapter 5 – data storage and analysis..........................................................................21
Lecture 4 – Business processes – purchases...................................................24
Lecture notes................................................................................................................ 24
Chapter 8 – documenting systems and processes.........................................................26
Chapter 10 – purchasing and payment processes.........................................................30
Lecture 5 – Business processes – conversion and sales...................................44
Lecture notes................................................................................................................ 44
Chapter 11 – conversion process...................................................................................45
Chapter 12 – marketing, sales, and collections.............................................................54
Lecture 6 – data analytics.............................................................................65
Lecture notes................................................................................................................ 65
Chapter 17 – data analytics...........................................................................................66
Chapter 18 – data visualization.....................................................................................73
Lecture 7 – Wrap-up.....................................................................................77
*For KNIME workshops/lectures look at the slides, the lecture notes of 1 & 2 are
incorporated in the chapter paragraphs
,LECTURE 1 – INTRODUCTION
Accountants should understand the business and the business process. They check the
quality of the information. Assurance: checking something but not promising that it is a
100 percent okay. Auditing does make the promise of being a 100 percent okay.
CHAPTER 1 – ACCOUNTING AS INFORMATION
Accounting is the language of businesses. Accounting measures and communicates the
financial outcomes of a company’s business strategy for three crucial categories of
business activities: operating, investing, and financing. It requires knowledge of economic
contexts. And consists of a mix of rigid black-and-white rules (e.g., generally accepted
accounting principles (GAAP)) and many shades of gray. Accounting provides a source of
useful information for decision-making and helps support a prosperous society. It serves
the public interest, and it consists of several sub-fields: financial accounting, auditing &
assurance, taxation, and managerial accounting.
An information system (IS) consists of interrelated components including physical
hardware like monitors and laptops, the software that users interact with, databases used
for storage, and networks that send data and information throughout the system. An
information system also includes the people who use and maintain it. With an information
system we can 1) capture raw and unorganized data, which is the input, 2) process and
store that data, which is the action, and 3) report information in formats that are useful to
users, which is the output. Data consists of facts or statistics about a person or an object,
like a transaction. Data is different from information.
An accounting information system (AIS) performs the same data collection,
transformation, and reporting as all other information systems, but it is specific
accounting and financial data. It captures data created by business events (or activities)
that involve an exchange of economic resources.
Output AIS: accounting reports used by investors, tax authorities, creditors, and other
stakeholders.
A business event is a single business activity in a business process. For example: sell
goods to customer or purchase equipment. It always includes a verb and a noun that is
the object of the verb. So, sell (verb) goods (noun) to customer, and purchase (verb)
equipment (noun). Accounting events give rise to accounting transactions because
they involve an exchange of economic resources. So, a non-accounting event is ‘take
customer order’. Non-accounting events are recorded in the IS of the company, but only
accounting events are recorded in the AIS of a company. Although the AIS is focused on
financial data and information, it can be integrated with the broad IS to support more
complex reporting, which expands beyond financial reports.
The purpose of a business is to make a profit and generate enough cash flow to continue
operating, while performing a morally acceptable activity. A business model includes
identifying the customer base, products, operation plans, and source of revenue and
financing.
Examples of business models:
- Retailer business model where the product is sold to other businesses.
- Direct-to-consumers business model involves selling directly to customers (the
same as retailer business model^).
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, - Franchise business model allows individuals to purchase and run a franchise of a
popular fast-food chain.
- Subscription business model involves charging a monthly subscription fee for
unlimited access to a service or product.
- Freemium business model involves offering free services but charging a fee to
access upgraded features.
- Peer-to-peer business model connect individuals with one another (Airbnb).
Business models are achieved through well-designed business processes. A business
process is a group of related business events designed to accomplish the strategic
objectives of the business. In its simplest form, a basic business model consists of three
primary types of business processes:
- Acquisition and payment processes
- Conversion processes
- Marketing, sales, and collections processes
Different types of business events combined will create a business process. The business
process “sell cookies to online customers” involves the following business events:
- Take customer order: customers order cookies on the mobile app
- Collect customer payment: customers pay via the mobile app
- Deliver goods to customer: local delivery drivers deliver directly to the customer’s
location.
The transaction-based AIS recorded only accounting transactions.
These systems were limited in that they ignored nonfinancial data
and the relationships between business events and business
processes. Financial accounting transactions are the business
events that result in economic exchanges of resources. Not all
business events result in economic exchanges of resources. Many
business processes include informational events which involve the
exchange or creation of information. A transaction-based AIS
captures only accounting business events, while a process-based
information system captures all the data of interest generated in a
business process.
A comparison between transaction-based vs. process
An acquisitions and payments process includes three business
events: 1) order raw materials from vendor, 2) receive raw materials from vendor, and 3)
pay vendor. What data should the business collect for “order raw materials from vendor”?
The data could include date of order, vendor name, product ID, order quantity, price, and
promised delivery date.
Common resources include financing (cash is central to a business), property, plant,
equipment, employees, inventory, and other goods and services.
A manufacturing company must:
- Hire employees to work on the manufacturing line (no exchange of economic
resources; the transaction-based AIS does not capture this event).
- Purchase the equipment needed to manufacture its products.
- Purchase raw materials to transform into its final product.
What can the process-based system support? For example, employee terminations may
not result in accounting transactions, but accounting professionals can use this data to
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, calculate monthly employee turnover – the percentage of employees leaving the
company each month – to analyze risk in each of the company’s plants. High turnover can
create opportunities for fraud, reduce a plant’s productivity, and result in high costs
related to hiring and training new employees.
The conversion process in two perspectives:
Other data which can be captured around the conversion process is design product, test
product, plan production, schedule production, assemble product, package product,
supply chain miles, water usage, carbon footprint, product recycling rate, energy
consumption, and waste reduction rate.
The marketing, sales, and collections processes in two perspectives:
Additional data captured in a process-based information system:
- Conversion rate from first contact with potential customers to their becoming
customers
- Online search engine rankings
- Online click-through rate
- Online engagement level
- Social media posts
The relationship between management and AIS:
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