CHAPTER 1 THE INFORMATION SYSTEM: AN ACCOUNTANT’S PERSPECTIVE REVIEW QUESTIONS 1. Operational, operations management, middle management, and top management. Horizontal flows support operation-level tasks. The information is highly detailed about the day-to-day operations. Vertical flows distribute summarized information to managers at all levels, and this information flows upward. Instructions, quotas, and budgets also flow downward. 2. Natural systems stem from the atom, while artificial systems are put together by humans. 3. Multiple components, relatedness, subsystems, purpose, and interdependency. 4. System decomposition is the process of dividing the system into smaller subsystem parts, while interdependency is the interaction between the subsystems. They are related by the degree and nature of the interaction between the subsystems. If a vital subsystem fails, the entire system will most likely fail. 5. Data are facts that are collected in a “raw” form and made meaningful through processes such as sorting, aggregating, classifying, mathematically manipulating, and summarizing. The meaningful data is considered to be information. 6. AISs process financial transactions and certain nonfinancial transactions that directly affect the processing financial transactions. The external financial reporting documents of AIS are subject to legal and professional standards. Consequently, management and accountants have greater legal responsibility for AIS applications than for MIS applications. The MIS processes nonfinancial transactions that are outside the scope of the AIS. MIS applications expand the information set provided to such areas as production, sales, marketing, and inventory management. MIS often draws from and builds on data from the AIS. 7. Revenue cycle, expenditure cycle, and conversion cycle. 8. Reports used by management, which the company is not obligated by law, regulation, or contract to provide. These are often used for internal problemsolving issues rather than by external constituents. 9. Relevance, accuracy, completeness, summarization, and timeliness. 10. Relevance and efficiency. 11. Data attribute (field), record, file, and database. 12. Storage, retrieval, and deletion.