EIS Chapter 3 Charts

EIS Quick Bites by Prof.
Om Trivedi
CA Intermediate – Group II (New Course)
Chapter 3 Unit I: Information System Components
Data Information Process System
• Collection of raw facts • Data that have been BP is a sequence of co- A group of mutually
and figures. processed so that ordinated activities to related, cooperating
• Consists of numbers, they are transforms input into elements working
words, or images, meaningful. output which creates towards reaching a
particularly as • Organized data that some value to the common goal by taking
measurements or has been arranged customer as well as the inputs and producing
observations of a set of for better organization. outputs in organized
variables. comprehension, transformation processes.
understanding
and/or retrieval.
Information System: It refers to a system that collects, stores, analyses, processes and distributes information
in the enterprise for decision-making, co-ordination and control. It can be manual as well as computer-based
information system (CIS).
Information Technology: It refers to the applications of Computer systems – Hardware and Software,
Telecommunications and Networks, DBMS and Other Information Processing Technologies to collect, store,
transmit and manipulate data for processing of information in the enterprise.
Data Vs. Information

Data Information
• Data is raw facts and figures. • Information is facts or figures ready for
communication or use.
• Data is unorganized. • Information is meaningful and recorded by

human intellect.
Components of IS Key: (PHD IN Sw.) Why IS? Key: (OBC2)

1. People Resources (Specialists and End Users) 1. Operational excellence
2. Hardware (Machine and Media) 2. Better decision-making
3. Data (DBMS) 3. Competitive advantage
4. Information Products 4. Customer-supplier intimacy
5. Network (Devices, Media, Software and Protocols)
6. Software (Programs and Procedures)
Prof. Om Trivedi, IIMC Alumnus, EIS-SM External Subject Expert at BOS, Faculty of LVC of BOS, NIRC & WIRC of ICAI
EIS Quick Bites by Prof. Om Trivedi
LAYERS IN INFORMATION SYSTEMS
HARDWARE
PROCESSING DEVICES
Memory Unit
Primary Secondary Virtual

Memory Memory Memory
Internal External
RAM ROM CMOS
Memory Memory
CPU CU ALU Registers
• CPU is the processor • Computer’s • Carries out Internal memory within

that computes and resources are mathematical CPU, which are very fast
processes data and managed by CU. operations. and very small.
delivers the results • It is the logical • Arithmetic: Addition,
based on the hub of the subtraction, Types of Registers:
instructions that are fed computer. multiplication, division, a) Accumulators (AR)
etc. b) Data Registers (DR)
to the PC. • CPU’s
c) Instruction Registers
• Every CPU has two instructions for • Logical: Comparisons, (IR)
d) Memory Registers
basic parts, the Control carrying out such as, whether one
(MR)
Unit and the commands are number is equal to, e) Index Registers
Arithmetic Logic Unit. built into CU.
greater than, or less

than another number.
Cache Memory (Pronounced as ‘Cash’)
• There is a huge speed difference between Registers and Primary Memory.

• To bridge these speed differences, we have cache memory.
• Cache is a smaller, faster memory, which stores copies of the data from the most frequently used main
memory locations so that Processor/Registers can access it more rapidly than main memory.
PRIMARY MEMORY
1. Read Only Memory (ROM):
• It is only readable memory.
• The data written on it cannot be modified.
• The instructions required during booting of a system are retrieved from ROM.
2. Random Access Memory (RAM):
• RAM is temporary and is erased when computer is switched off.
• RAM is read/write type of memory, and thus, can be written by user.
VIRTUAL MEMORY
• VM is not a separate device; but an imaginary memory area
• Supported by operating systems in conjunction with the hardware.
• If a computer, that lacks RAM, needs to run a program or operation, Windows uses virtual memory to
compensate.
• Virtual memory combines computer’s RAM with temporary space on the hard disk.
• When RAM runs low, virtual memory moves data from RAM to a space called a paging file.
• Moving data to and from the paging file frees up RAM to complete its work.
• Virtual memory is an allocation of hard disk space to help RAM.
SOFTWARE
System Software Application Software
A computer software designed to operate the computer hardware and to Application software has been
provide and maintain a platform for running any application software. created to perform a specific task
for a user.
Functions of OS Key: (PUsH MTNL File)

1. Performing hardware functions
2. User Interfaces
3. Hardware Independence
4. Memory Management
5. Task Management
6. Networking Capability
7. Logical access security
8. File management
DATABASE MANAGEMENT SYSTEM (DBMS)

Database Database System DBMS Objectives of DBMS
• A collection of Computer Based Record- • A set of computer 1. To know its
interrelated data Keeping System. programs that information needs.
stored together to controls the creation, 2. To acquiring that
serve multiple maintenance, and information.
applications. utilization of the 3. To organize the
• Data is stored in such databases of an acquired information
a way that it is organization. in a meaningful way.
independent of the • A System software 4. To assure
programs which use that provides facility information quality.
the data. to create and maintain 5. To provide software
a well-organized tools so that users in
database. the enterprise can
• Example: SQL, access the information
Oracle, DB2, etc. they require.
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Database Management Systems

(DBMS)

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Database
● A collection of interrelated data stored together to serve
multiple applications.
● Data is stored in such a way that it is independent of the

programs which use the data.
Database System
 Computer Based Record-Keeping System.

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Database Management System
● A set of computer programs that controls the

creation, maintenance, and utilization of the
databases of an organization.
● A System software that provides facility to create

and maintain a well organized database.
● An Application Software Accesses data from DBMS.

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ER Diagram

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Database Models/Data Structure
Database Models Hierarchical
Network
Relational
Object
Oriented
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Advantages of Database
● Permitting data Sharing
● Integrity can be maintained
● Minimizing Data Redundancy
● Program and file Consistency
● Achieving program/data Independence
● Faster Application development
● Improved Security
● User-friendly
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Disadvantages of Database
● Cost
● Security

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Big Data
● Big data is
○ high-volume and
○ high-velocity and/or
○ high-variety information assets
● that demand
○ cost-effective
○ innovative
● forms of information processing that enable enhanced
insight, decision-making, and process automation.
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Benefits of Big Data Processing

● Intelligence
● Access to social data
● Early identification of risk
● Improved customer service
● Better operational efficiency

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Data Warehouse
● E- Extract data from one or more of the organization’s
databases.
● T- Transform it into a standard format.
● L- Load it into the data warehouse for storage and
analysis.

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Criteria to Structure Data Warehouse
● Uses non-operational data
● Data is time-variant
● Data is standardized
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Approaches to Structure Data Warehouse
● Bottom-Up Approach
● Top-Bottom Approach

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Benefits of Data Warehouse
● Clear Understanding of Data Sets
● Truth Finding
● Consistency in Data
● Trend Analysis

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Data Mining

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Data Mining
• Data mining is a major use of data warehouse
databases and the static data they contain.
• The data in a data warehouse are analyzed to
reveal hidden patterns and trends in historical
business activity.
19
Steps in Data Mining

● Data Integration
● Data Selection
● Data Cleaning
● Data Transformation
● Data Mining Techniques
● Pattern Evaluation and Knowledge Presentation
● Decisions / Use of Discovered Knowledge

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Hierarchical DBM Network DBM Relational DBM Object Oriented DBM

• Records are logically • It views all records in A relational database is • Object-oriented has its
organized into a sets. structured into a series of origins in Object
hierarchy of • Each set is composed two-dimensional tables. oriented
relationships. of an owner record programming
• In an inverted tree and one or more languages. (C++,
pattern. member records. Ruby, Python, etc.)
• Records in the • A logical data • An object typically has
hierarchy are called structure that allows two components; state
nodes. many-to-many (value) and behaviour
• Each node is related to relationships among (operations).
the others in a parent- data records. • Object oriented
child relationship. • It allows entry into a databases provide a
• Implements one-to- database at multiple Unique Object
one and one-to-many points, because any Identifier (OID) for

relationships. data element or each object.
• The top parent record record can be related

in the hierarchy is to many other data
called the root record. elements.
Advantages of DBMS Key: (SIR has CIA’s Disadvantages of DBMS

Security Data for Us.
1. Permits Data Sharing 1. Cost
2. Maintains Integrity 2. Security
3. Minimizing data Redundancy
4. Program and file Consistency
5. Achieving program/data Independence
6. Faster Application Development
7. Improved security
8. User-friendly
Big Data Data Warehouse (DW) Data Mining Knowledge Discovery

Big data is high-volume DW is a small database Data mining is a major Knowledge Discovery in
and high-velocity and/or extracted from the larger use of data warehouse Databases systems also
high-variety information database. databases and the static assist us establish, contact,
assets that demand cost- Extract data from one or data they contain. and communicate with
effective, innovative more of the The data in a data experts (knowledgeable
forms of information organization’s databases warehouse are analyzed people) on various
processing that enable and load it into the data to reveal hidden patterns subjects, surrounded by
enhanced insight, warehouse for storage and trends in historical our organization, or
decision-making, and and analysis. business activity. perhaps even outside.
process automation.
Criteria to Create DW DW Design Approaches Benefits of DW Key: (CTC Trend)

A. Uses non-operational data A. Bottom-Up Approach A. Consistency in Data
B. Data is time-variant B. Top-Down Approach B. Truth Finding
C. Data is standardized C. Clear Understanding of Databases
D. Trend Analysis
Nov
2018
NETWORKING AND COMMUNICATION SYSTEMS

Computer Network Types of Networks Network Principles Benefits of Networks
Key: (R2BC)
A network is a set of 1. Connection Oriented 1. Routing A. Distributed nature of

devices (also known as networks 2. Resilience information
nodes, terminals or 2. Connectionless 3. Bandwidth B. Resource Sharing
stations) interconnected Networks C. Computational
4. Contention
by a communication link. Power
D. User communication
E. Reliability
F. Shared Databases
G. Remote Access
H. Fault Tolerance
I. Internet and Security
THE BUSINESS VALUE OF TELECOMMUNICATIONS Key: (GST Cost)

Overcome Geographical Overcome Structural Overcome Time Overcome Cost
Barriers Barriers Barriers Barriers
Chapter 3 Unit II
Information Systems Controls and Auditing (ISCA)
Audit
• Audit is a systematic and independent examination of FI of an Entity.
• To express an opinion on the FS.
• And to ascertain that –
o How far the FS
o As well as Non-financial disclosures
• Present a TRUE AND FAIR VIEW of an Entity.
Audit in IT Manual Tools and Importance Risk of IT in

Environment Audit Techniques of of IT in
Audit in CIS CIS Audit
CIS Audit
Environment
- Computerised - Manual Env. Approaches: 1. Processes 1. Unauthoris
Env. - Manual Large ed Access
- Black Box
- IT enabled compilation Volume of 2. False Sense
- White Box
compilation process of BOA Data of Security
CAAT:
process of BOA and Docs. 2. Security is 3. Privilege
- BI Tools
and Docs. - Manual improved Violations
- ACL
- Automated Processes 3. Monitoring 4. Process
- IDEA
Processes - Manual the becomes
- SAS
(BPMS/ERP/TP Reporting Performan wrong
- SPSS
S/CBS/Tally, - Auditors don’t ce 5. Malware
- Lindo, etc.
etc.) require 4. Analysis is 6. Manual
Concurrent
- Automated IT/IS/BPMS enhanced Interventio
Audit Tools:
Reporting and CAAT (DA) n
- Snapshots
- Auditors require Knowledge. 5. Reduced
- ITF
IT/IS/BPMS Risk and
- SCARF
Knowledge. better
- CIS
- Tools: CAAT Controls
- Audit
6. Timeliness
Hooks.
and CIAT
Objectives of Controls
Causes of the Exposure to Critical controls lacking in a CIS
Potential Loss Environment
1. Errors or omissions 1. Lack of management’s understanding of
2. Improper authorizations IS risks
3. Improper accountability 2. Lack of IT staff’s knowledge of IS risks
4. Inefficient activity 3. Weak general controls and IS controls
4. Complexity of implementation of controls
Controls
• Policies, procedures, practices and organization structure
• Designed to provide reasonable assurance that business objectives are achieved and
• Undesired events are prevented or detected and corrected.
IS’s Controls
Controls Based on Objectives of Control
Preventive Detective Corrective Compensatory
Prevent errors, Detect errors, Correct errors, Alternative control
omissions, omissions or omissions, or that is put in place
malicious acts or malicious acts incidents once to satisfy the
security incidents that occur and they have been requirement for a
from occurring. report the detected. security measure
occurrence. that is deemed too
Example: Example: Example: difficult or
• Access Control • Monitoring • Removing impractical to
• IPS, Firewall, • Review unauthorized implement at the
Anti-virus • Cash count users present time.
• SOD • Anti-virus • Disaster recovery Example:
• Documentation • Bank • Back-up • Data Centre
• Training Reconciliation Procedure • Biometric
• Authorization • Internal Audit • BCP Installation
• Validation • IDS • Resolving queries • SOD
• Passwords • Budgeted Vs. • Correcting • Log Storage –
Actual Expenses Entries Extra Hard-disk
• MOC Space to store
Logs
• Encryption
Information System Auditing

Systematic and Independent Examination of the controls within an entity’s Information
technology infrastructure. (To ensure CIAT for T&F View)
Objectives of ISA Need for ISA

✓ Assets Safeguarding ✓ Same as E-Commerce Control
✓ Data Integrity MAY Objectives (Chapter 5)
✓ System Effectiveness 2018
✓ System Efficiency
Information System Audit and Audit Evidence

SA 230 Why audit evidences Inherent Limitations of
Documentation are needed? ISA
Audit ✓ Means of controlling ✓ Nature of Financial Reporting
Documentation current audit work. ✓ Nature of Audit Procedures
refers to the: ✓ Evidence of audit ✓ Audit to be conducted within a reasonable
✓ Record of audit work performed. period of time and at a reasonable cost
procedures ✓ Schedules supporting ✓ Fraud involving senior management or
performed, or additional item in collusion
✓ Relevant audit the accounts. ✓ The existence and completeness of
evidence ✓ Information about related party relationships and
obtained, the business being transactions.
✓ Conclusions the audited, including the ✓ Non-compliance with laws and
auditor reached recent history. regulations
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ISCA
IN FO RM A TIO N SYSTE M
C ON TR OL S A ND AUD ITI NG
1
Auditor

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SA 200 SA 210
Conduct of Audit as per SA Terms of Engagement
Planning Documentation Reporting

SA 210 SA 230 SA 700
 Audit Subject  Acquire Data  Draft Report
 Audit Objectives  Test Data  Issue Report
 Scopes SA 315-330-320-450  Follow-up
 Pre-conditions  Issue Discovery
 Acceptable SA 500
 Preparation  Validate it
 Internal Control  Document Results
 Co-operation
3
Types of Audit
Manual CIS Environment

Audit Audit

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Approaches of Audit
Black-Box White-Box
Audit Audit

5
Importance of IT in CIS Audit

Processes Large Volume of Data MC
Security is Improved
Monitoring The Performance

Process
Analysis is Enhanced (DA) becomes
SMART
Reduced Risk and Better Controls
Timeliness and CIAT

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Risks of using IT in CIS Audit

Unauthorized Access MC
False Sense of Security
Privilege Violations
USP
Processes become wrong of
PM-2
Malware
Manual Intervention
7
Controls
• Policies, procedures, practices and
organization structure
• Designed to provide reasonable
assurance that business objectives are
achieved and
• Undesired events are prevented or
detected and corrected.
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Controls
Based on Imp. Based on Obj. Based on FAS Based on IS Res.
 Manual  Preventive  Configuration  Environmental

 Automated  Detective Level  Physical
 Semi-  Corrective  Master Level Access
automated  Compensatory/  Transaction  Logical
Perfective Level Access

9
Controls
Based on Audit Functions
Managerial Control Application Control

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Controls
Manual Automated Semi-Automated

 Controls run  Controls run  Controls run by/
by/measured, by/measured, measured,
compared, compared, compared,
computed and computed and computed and
corrected by the corrected by the corrected by the
human efforts or machine or some combination of
manual other computing human and
intervention. technology. machine or some
computing
technology
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Controls
Preventive Detective Corrective Compensatory

 Designed to  Designed to  Designed to  A mechanism
prevent an detect errors, correct errors, that is put in
error, omission omissions or omissions, or place to satisfy
or malicious act malicious acts incidents once the requirement
occurring. that occur and they have been for a security
report the detected. measure that is
occurrence. deemed too
difficult or
impractical to
implement at the
present time.
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E NV I R ONM E NTAL
CONTROLS
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Physical Access Controls

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Technical Exposure

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Asynchronous Attack

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Logical Access Violators

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Logical Access Controls
Mobile Computing App. Sw. Access Control
OS Access Control User’s Responsibility
Nw. Access Control Users Access Mgt.

19
User Access Management
Privilege management
MC
User Password Mgt.
User’s
User’s Access Review Privilege
@
User Registration PAR

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User Responsibilities
Password use
Unattended User Equipment

21
User Access Management

Nw Connection and Routing Ctrl. MC
Policy on use of Nw. Services
Segregation of Networks
Security of Network Services Nw. connection and
routing Policy for 2
Enforced path SONs is enforced by
Calling back
Call Back Devices Firewall and
Encryption
Firewall and Encryption
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04-11-2020
Operating System Access Control

Automated terminal User Identification and
identification Authentication
Terminal log-in procedures PMS
Access Token Use of system utilities
Access Control List Terminal Time Out
Discretionary Access Duress alarm to

Ctrl. safeguard users
23
Application and Monitoring System Access Control
Information Access Restriction
Event Logging
Monitor System Use
Clock Synchronization
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Controls
Based on Audit Functions
Managerial Control Application Control

 Controls over the managerial  Controls in-built in the
functions that must be performed to application software ensure
ensure the development, accurate and reliable
implementation, operation and processing.
maintenance of information  Application controls ensure that
systems in a planned and controlled all transactions are authorized,
manner in an organization. complete and accurate.

25
Managerial Control
Top Mgt. Ctrl. Quality Assurance Mgt. Ctrl.
IS Mgt. Data Resources Mgt. Ctrl.
Prog. Dev. Mgt. Ctrl. Operations Mgt. Ctrl.
System Dev. Mgt. Ctrl. Security Mgt. Ctrl.

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Application Controls
Boundary Computing Process Control
Input Control Output Control
Communication Control Database Control

27
Managerial Control

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04-11-2020
Top Mgt. and IS Mgt. Control

 IT policies, procedures and standards
 Top-Bottom Communication of Controls
 Major Functions:
• Planning
• Strategic Plan (LT)
• Operational Plan (ST)
• Steering Committee
• Review Committee
• Organizing
• Leading
• Controlling
29
System Development Mgt. Control

 Technical Design Activities
 Internal Auditor’s Participation
 Program Testing
 System Authorization Activities
 User Test and Acceptance Procedures
 User Specification Activities

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Program Development Mgt. Control

 Planning
 Design
 Coding
 Testing
 Operations
 Maintenance
31
Quality Assurance Mgt. Control

 Quality of IS/BPMS/ERP
 No Defects
 Less Error
 Less Maintenance
 Updated
 ISO-3100
 License/Legal Feasibility
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Data Resources Mgt. Control

 Data Definition Ctrl.
 Update Ctrl.
 Access Ctrl.
 Quality Ctrl. – CIAT
 Concurrency Ctrl.
 Back-up Ctrl. - Data repository system
 Data Administrator’s Logs
33
Operations Mgt. Control

 Computer Operations
 Nw. Operations
 Data Entry Operations
 Production Control
 File Library
 Program Library
 Help-Desk/Tech Support
 Capacity Planning
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Security Mgt. Control
 Safeguarding of Assets
 Environmental Controls
 Physical Access Controls
 Logical Access Controls

35
Application Control

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Boundary Control
 Access Controls
 Biometric Devices
 Cryptographic Controls
 Digital Signature
 PIN
 Plastic Card

37
Input Control
Source
Data Coding Batch Validation
Document
Controls Controls Controls
Control
Valid MC
Batch
and Source
Data Code

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04-11-2020
Source Document Control
 Use pre-numbered source documents
 Use source documents in sequence
 Periodically audit of source documents

39
Data Coding Control
Transcription Transposition
Error Error
 Addition Error  Single

ASCI09186 - ASCI091866 ASCI09116 - ASCI09161
 Truncation Error  Double
ASCI09186 - ASCI0918 ASCI09116 - ASCI01961
 Substitution Error
ASCI09186 - ASCI09166
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Batch Control
• Invoices
• Bank Statements
Physical • Payroll Transactions Logical
Controls Controls
Types of Errors in Batch Control

 Grand Total
 Hash Total
 Document Count
41

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04-11-2020
Validation Control
Field Record File

Interrogation Interrogation Interrogation
 Code Check  Valid Sign  Security of Data File

 Arithmetic Check  Reasonableness  Logging
 Limit Check Check  Authorization of File
 Cross Check  Sequence Check  Version Usage
 Digit Check  Ext. and Int. Labelling
 Picture Check
43
Process Control
 Processor Control
 Real Memory Control
 Virtual Memory Control
 Data Processing Control
 Run to Run Total
 Field Check
 Reasonableness Check
 Edit Check
 Exception report
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Communication Control
 Physical Components Control
 Line Error Control
 Channel Access Control
 Link Control
 Internetworking Control
 Flow Control
 Topology Control
45
Output Control
 Storage and logging of Sensitive and
Critical forms
 Printing Control
 Logging of Output Program execution
 Report Distribution and Collection Control
 Retention Control

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Database Control
Update Report
Control Control
 Sequence Check between Master and  Standing Data
Non-master  Print Run to Run Control
 Ensure All records are Processed Totals
 Process Transactions in the correct  Print Suspense Account
order. Entries
 Maintain a Suspense Account  Recovery Control
47
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✓ Future events or conditions that may

cause an entity to cease to continue as a
going concern
Audit Trail
• Step-by-step record by which accounting data can be traced to their source.
• Logs that can be designed to record activity at the system, application, and user level
Types Objectives
1. Detecting Unauthorized
Access (Detective)
2. Personal Accountability
(Preventive)
3. Restructuring Events
(Corrective)
Concurrent Audit
Definition Tools
Real-time auditing to provide continuous 1. Snapshot
assurance about the quality of the data that is 2. ITF – Integrated Test Facility
3. SCARF – System Control Audit Review File
continuous auditing, through:
4. CIS – Continuous and Intermittent
1. Embedded Modules Simulation
2. Special Audit Records 5. Audit Hooks
ITF
SCARF
CIS

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EIS Quick Bites by Prof.

Chapter 3 Unit I: Information System Components

Data Information Process System

Data Vs. Information

• Data is unorganized. • Information is meaningful and recorded by

Components of IS Key: (PHD IN Sw.) Why IS? Key: (OBC2)

LAYERS IN INFORMATION SYSTEMS

Primary Secondary Virtual

CPU CU ALU Registers

• CPU is the processor • Computer’s • Carries out Internal memory within

greater than, or less

Cache Memory (Pronounced as ‘Cash’)

• There is a huge speed difference between Registers and Primary Memory.

Functions of OS Key: (PUsH MTNL File)

DATABASE MANAGEMENT SYSTEM (DBMS)

Easy – Interesting – Scoring

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Database Management Systems

www.eissmpendrive.in Help Desk: 9953922272

● Data is stored in such a way that it is independent of the

www.eissmpendrive.in Help Desk: 9953922272

www.eissmpendrive.in Help Desk: 9953922272

Database Management System

● A set of computer programs that controls the

● A System software that provides facility to create

● An Application Software Accesses data from DBMS.

www.eissmpendrive.in Help Desk: 9953922272

www.eissmpendrive.in Help Desk: 9953922272

Database Models/Data Structure

Database Models Hierarchical

www.eissmpendrive.in Help Desk: 9953922272

Benefits of Big Data Processing

● Access to social data

● Early identification of risk

● Improved customer service

● Better operational efficiency

● E- Extract data from one or more of the organization’s

● T- Transform it into a standard format.

● L- Load it into the data warehouse for storage and

www.eissmpendrive.in Help Desk: 9953922272

Criteria to Structure Data Warehouse

● Uses non-operational data

Approaches to Structure Data Warehouse

www.eissmpendrive.in Help Desk: 9953922272

www.eissmpendrive.in Help Desk: 9953922272

www.eissmpendrive.in Help Desk: 9953922272

Benefits of Data Warehouse

● Clear Understanding of Data Sets

www.eissmpendrive.in Help Desk: 9953922272

www.eissmpendrive.in Help Desk: 9953922272

databases and the static data they contain.

• The data in a data warehouse are analyzed to

reveal hidden patterns and trends in historical

Steps in Data Mining

www.eissmpendrive.in Help Desk: 9953922272

Hierarchical DBM Network DBM Relational DBM Object Oriented DBM

• Records in the • A logical data • An object typically has

hierarchy are called structure that allows two components; state

nodes. many-to-many (value) and behaviour

• Each node is related to relationships among (operations).

the others in a parent- data records. • Object oriented

child relationship. • It allows entry into a databases provide a