Saturday, April 7, 2012

Unit 2: The role of information technology

Information technology (IT) is used extensively for collecting, analyzing and communicating data and management information. This chapter explains the role of IT and the main IT elements in a management information system. Much of the content of this chapter may well be familiar to you already.

Later chapters will describe spreadsheets and spreadsheet software in some detail. Spreadsheets are used extensively by accountants to analyse and provide management information.

Role of information technology
Data processing model: input ---> processing (storage) ---> output

Advantages of computers:
- speed
- accuracy
- volume and complexity
- access to information

Capturing and processing cost and management accounting data
Stages of data input:
- stage 1 - origination of data
- stage 2 - transcription of data
- stage 3 - data input

The ideal methods of data collection and input are those which minimize the following:
- the time needed to record the original data, and transmit, prepare and input the data to the computer
- costs
- errors

Keyboard: a basic keyboard includes the following:
- ordinary typing keys
- a numeric key pad
- cursor control keys
- function keys

The VDU (Visual Display Unit):
A VDU or monitor displays text and graphics and serves a number of purposes:
- it allows the operator to carry out a visual check on what he or she has keyed in
- it helps the operator to input data by providing 'forms' on the screen for filling in
- it displays output such as answers to file inquiries
- it gives massages to the operator

Graphical User Interfaces (GUI) have become the principal means by which humans communicate with machines. Features include the following:
- windows
- icons
- mouse
- pull-down menu
- dialogue boxes, buttons, sliders, check boxes...etc.

Automatic input devices
- save time
- save money
- reduces errors
1. Magnetic Ink Character recognition (MICR) involves the recognition by a machine of special formatted characters printed in magnetic ink.
2. Optical Mark Reading (OMR) involves the marking of a pre-printed form with a ballpoint pen typed line or cross in an appropriate box.
3. A scanner is a device that can read text or illustrations printed on paper and translate the information into a form the computer can use.
4. Bar Codes are groups of marks which indicate specific codes or values. In large retail store, Electronic Point of Sale (EPOS) device is attached with bar code readers. This enables the provision of immediate sales and stock level information.
5. EFTPOS system (Electronic Funds Transfer at the Point of Sale): an EFTPOS terminal is used with a customers credit card or debit card to pay for goods or services.

Card reading devices:
1. Magnetic Stripe Card: contains machine-sensible data on a thin stripe of magnetic recording tape stuck to the back of the card.
2. Smart Card: is a plastic card in which is embedded a microprocessor chip. It would typically contain a memory and a processing capability.

Touch Screen: is a display screen that enables users to make selections by touching areas of the screen.

Storing cost and management accounting data
Data can be stored on:
- disks: internal hard disk, zip disk
- tape storage
- CD-ROM (Compact Disc - Read Only Memory)
- DVD (Digital Versatile Disc)
- Memory stick or Pen drive

Outputting cost and management accounting data
Data is usually output via printers or a VDU.

The choice of output medium
Choosing a suitable output medium depends on a number of factors:
- is a hard copy of the output required?
- the volume of information produced
- the speed at which output is required
- the suitability of the output medium to the application-the purpose for which the output is needed
- cost

Management information systems
A management information system is the hardware and software used to drive a database system which provides useful information for management.

A management information system (MIS) is defined as a collective term for the hardware and software used to drive a database system with the outputs, both to screen and print, being designed to provide easily assimilated information for management.

Essential characteristics of management information system:
1. the functions of individuals and their areas of responsibility in achieving company objectives should be defined.
2. areas of control within the company (eg cost centers, investment centers) should also be clearly defined.
3. information required for an area of control should flow to the manager who is responsible for it.

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