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By J. Hall

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The Value of Information The value of information to a user is determined by its reliability. We saw earlier that the purpose of information is to lead the user to a desired action. For this to happen, information must possess certain attributes—relevance, accuracy, completeness, summarization, and timeliness. When these attributes are consistently present, information has reliability and provides value to the user. Unreliable information has no value. At best, it is a waste of resources; at worst, it can lead to dysfunctional decisions.

Business Function. Functional segmentation divides the organization into areas of specialized responsibility based on tasks. The functional areas are determined according to the flow of primary resources through the firm. Examples of business function segments are marketing, production, finance, and accounting. 2 Enterprise resource planning (ERP) systems such as Oracle and SAP are examples of this approach to systems implementation. ERP systems are discussed later in this chapter. SAP and Oracle are discussed in more detail in Chapter 11.

The TPS consists of three transaction cycles: the revenue cycle, the expenditure cycle, and the conversion cycle. Each cycle captures and processes different types of financial transactions. Chapter 2 provides an overview of transaction processing. Chapters 4, 5, 6, and 7 examine in detail the revenue, expenditure, and conversion cycles. General Ledger/Financial Reporting Systems The general ledger system (GLS) and the financial reporting system (FRS) are two closely related subsystems. However, because of their operational interdependency, they are generally viewed as a single integrated system—the GL/FRS.

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Accounting Information Systems by J. Hall


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