1.

Accounting Information System- Specialized subset of information systems

that processes financial transactions.

2. System- Group of two or more interrelated components or subsystems that

serve a common purpose.

3. Sarbanes-Oxley Act of 2002- Most significant federal securities law, with

provisions designed to deal with specific problems relating to capital markets,

corporate governance, and the auditing profession.

4. Financial Transaction- Economic event that affects the assets and equities of

the organization, is measured in financial terms, and is reflected in the accounts

of the firm.

5. Non-Financial Transaction- Events that do not meet the narrow definition of a

financial transaction.

6. Data- Facts, which may or may not be processed (edited, summarized, or

refined) and which have no direct effect on the user.

7. Information- Facts that cause the user to take an action that he or she otherwise

could not, or would not, have taken.

8. Transaction Processing System- Activity composed of three major subsystems

—the revenue cycle, the expenditure cycle, and the conversion cycle.

9. General Ledger/Financial Reporting System- System that produces traditional

financial statements, such as income statements, balance sheets, statements of

cash flows, tax returns, and other reports required by law.

10. Management Reporting System- System that provides the internal financial

information needed to manage a business.

11. Management Information System- System that processes nonfinancial

transactions not normally processed by traditional accounting information

systems.

12. Data Sources- Financial transactions that enter the information system from

both internal and external sources.

13. End Users- Users for whom the system is built.

14. Data Collection- First operational stage in the information system.

15. Data Processing- Group that manages the computer resources used to perform

the day-to-day processing of transactions.

16. Database- Physical repository for financial data.

17. Data Attribute- The most elemental piece of potentially useful data in the

database.

18. Record- is a complete set of attributes for a single occurrence within an entity

class.

19. Files- is a complete set of records of an identical class. For example, all the AR

records of the organization constitute the AR file.

20. Database Management- Special software system that is programmed to know

which data elements each user is authorized to access.

21. Information Generation- Process of compiling, arranging, formatting, and

presenting information to users.

22. Feedback- Form of output that is sent back to the system as a source of data.

Feedback may be internal or external and is used to initiate or alter a process.

23. System Development Life Cycle- Software development process.

24. Turnkey Systems- Completely finished and tested systems that are ready for

implementation.

25. Backbone Systems- Basic system structure on which to build.

26. Vendor-Support Systems- Custom systems that organizations purchase from

commercial vendors.

27. 8 Functional Areas of a Firm- Materials management; Production; Marketing;

Distribution; Personnel; Finance; Accounting; IT Services.

28. Centralized Data Processing Model- Model under which all data processing is

performed by one or more large computers, housed at a central site, that serve

users throughout the organization.

29. Database Administration- responsible for managing the database resource.

30. Data Processing- Group that manages the computer resources used to perform

the day-to-day processing of transactions.

31. System Development and Maintenance- The information needs of users are

met by two related functions: systems development and systems maintenance.

The former group is responsible for analyzing user needs and for designing new

systems to satisfy those needs. the systems maintenance group assumes

responsibility for keeping it current with user needs.

32. Distributed Data Processing- Reorganizing the IT function into small

information processing units (IPUs) that are distributed to end users and placed

under their control.

33. Manual Process Model- is the oldest and most traditional form of accounting

systems. Manual systems constitute the physical events, resources, and

personnel that characterize many business processes.

34. Flat-File Model- Environment in which individual data files are not related to

other files.

35. Database Model- Symbolic model of the structure of, and the associations

between, an organization’s data entities.

36. REA Model- Alternative accounting framework for modeling an organization’s

critical resources, events, and agents, and the relationships between them.

37. Enterprise Resource Planning Model- System assembled of prefabricated

software components.