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Chapter 2 solutions

Accounting Information Systems (The University of the South Pacific)

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Chapter 2

Section 2.1
2. Describe the differences between data, information, knowledge, and wisdom.

Data

o Raw or unorganized facts and figures.

o Unprocessed data.
o Central component of any information

Information

o Is data that has been processed and put into context so that they have meaning.

Knowledge

o Adds understanding to information.

Wisdom

o Is a collection of values, moral codes and prior experiences that form an evaluated
understanding?

ISs process data into meaningful information that produces corporate knowledge and ultimately creates
wisdom that fuels corporate strategy.

3. Define TPS and give an example

o Processing of day to day transactions.

o Transactions are either internal transactions or external transactions
Internal transactions- originate or occur within the organization e.g payroll, purchases.
External transactions- originate outside the organization e.g customers, suppliers, regulators

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Section 2.2
2. How is the IT infrastructure different from the IT architecture?

o IT infrastructure is an inventory of the physical IT devices that an organization owns.

o IT architecture guides the process of planning or policies that governance the use of information

3. What is the purpose of an EA?

o Enterprise architecture reviews all the information systems across all departments in an
organization to develop a strategy to organize and integrate the organization’s IT Infrastructures
o Looks after the going concern IT structures.

4.What are the business benefits of EA?

o EA helps to maintain sustainability

o Solves two critical challenges: where are we going; how do we get there?
o Aligns IT capabilities with business strategy
o Adds value to organization
o Less risk of buying and cuts unnecessary expenses.
o Determines competitiveness

Section 2.3
1. What is information management?
o The use of IT tools and methods to collect, process, consolidate, store, and secure data
from sources that are often fragmented and inconsistent

6. Explain the purpose of master data management

o Synchronizes critical data from disparate systems into one master file

o Creates high-quality trustworthy data:

• Running the business with transactional or operational use

• Improving the business with analytic use

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Section 2.4
2. What is the difference between on-premises data centers and cloud computing?
o On-premises data center also refers to a physical facility that houses large numbers of
network servers used for the storage of data.
o Cloud computing uses the Internet and private networks to access, share, and deliver
computing resources e.g drop box.

5. How can cloud computing solve the problems of managing software licenses?

o Cloud services agreement

o Reduces the time consuming factor

8. Explain three issues that need to be addressed when moving to cloud computing services?

o Research about the vendor ( cost vs benefit )

o Beware of legal issues (terms and conditions)
o Consider backup to a cloud

Section 2.5
4. How might companies risk violating regulation or compliance requirements with cloud services?

o It services should review data is confidential and on-premises

o Company should involve legal advisors if needed
o Invasion of privacy.

6. Describe the different types of virtualization

o Storage virtualization is the pooling of physical storage from multiple network storage
devices into a single storage device.
o Server virtualization consolidates multiple physical servers into virtual servers that run on a
single physical server.
o Desktop virtualization is software technology that separates desktop environment and
application software from the physical machine.
o Application virtualization is the practice of running software from a remote server rather
than on the user’s computer.
o Network virtualization combines the available resources in a network by splitting the
network load into manageable parts.
o Hard virtualization is the use of software to emulate hardware or a total computer
environment other than the one the software is running in. (most popular and the major
type of virualization)

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7. What is load balancing and why is it important?

o Load balancing helps to handle the demand for requests to site which is being accessed by
millions of people at the same time.
o It helps to distribute the load across a cluster of physical servers to ensure maximum
performance of all running virtual machines.(VMs)

Critical thinking questions

3. If business data are scattered throughout the enterprise and not

5. Why do managers and workers still struggle to find information that they need to make decisions or
take actions despite advances in digital technology? That is, what causes data deficiencies?

o Lost or bypassed data, due to flaws in the data collection process

o Poorly designed interfaces

o Nonstandardized data formats, impeding efficient analysis

10. Why is it important for data to be standardized? Give an example of standardized data

o Enables better decision making ( outdated data or inaccurate data can be misleading)
o

Case 2.2
o Data chaos often runs uncontrolled in service organizations such as health services, where each
line of department has implemented its own IT app
o Improperly managed applications can generate terabytes of irrelevant data, causing the hospital
to drown in such data.
o This data chaos can lead to medical errors
o In the effort to manage massive amounts of data, there is a risk of losing relevant information.
o By 2015, 96% of health-care organizations had adopted electronic health records HER which had
the consequence of faulty data and the system not being as accurate as expected.
o More than 25million people have been affected by health-care system data breaches.
o Most data breaches involved lost or stolen data on laptops and removable drives.

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o Breaches are expensive and destroy trust.

o Data governance programs verify that data input into EHR are accurate and complete.
o Vanderbilt University Medical Center was an early adopter of EHR and data governance in 2009
o VUMC count 1.6m clinic visits each year and has achieved Health-care Information and
Management System Society stage 6 out of the 7 hospital EHR adoption. 7 th stage is fully
paperless environment
o This means all clinical data are part of an electronic medical record and can be shared.

6. List and explain the cost of data failure

o loss of business due to failure in proper decision making
o Patient safety errors, wrong prescriptions or medical treatment given to patience if medical
history on database or servers is incorrect.
o Delays in receiving payments due to billing codes data are not available.

1. Data silos

2. it will cause dirty data i.e data is inconsistent, unstructured

3. dirty data, data breach(unauthorized access to data)

4. reduce or eliminate dirty data, and prevent data breaches

5. authorized access only

7. good for research purposes, for future use.

o Types of network (6) e.g lan wan etc

o Chpt 2 pg32 figure2.6 pg36 table 2.2
o Data silos- data can only be accessed by one department

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