he rnstitute of chartered Accountonts of Bonglodesh (rcAB)

course Name: lnformation Technology (lr) Session: June,2o18-August, 2018

Professional Stage: (Certificate Level -1't Batch) Section: A
course Teacher: Abdulla-Al-Mahmud FcA, FcMA, Fcs, MBA, LL.e Lecture Synopsis-01

Chopter: Inf ormotion within Orgonizotion

# Topic: Inforrnation:

Data:
Data is the owest level of knowledge and unprocessed
instructions and it can be in any form, usable or not. lt
does not bri

lnformation:
lnformation is datq that has been processed into a form that is meaningful to the recipient and is of real or
perceived vElilEli-current or progressive decision. lt is the structured format of data and is more sensible
to
hunran operator.
Data -,' Data transformation + lnformation

Value of lnformation:
lnformation is valuable when it is
+. Reliable-lt must be accurate;
readability-etc.;

oad; and
the receiver.

# Topic: The Difference between Data and lnformation:

It often seems that computers must understand human langyage because human being understands the
information they produce. However, computers cannot understaird inything. A computer appears to understand
information only because it operates at such phenomenal speeds, groupino its individual on/off switches into
atterns that become meglnglq_Llq ug_Ihe basic difference between data and information are as follows:
lnform ation
Data $ raw, uflanalyzed facts, figures Useful knowledge derived from the
and events. information.
Data consists of the raw numbers that lnformation depicts the precise, structural
computers orga nize to produce and organized presentation of data
information. indicating, summarizing the posrtion of a
_pbe!el!enon,
Data relates to fact event and Information is the processed data in such a
transaction. lt is unprocessed way as to be meaningful to the person who
in struction. receives it. lt is anyth ing that is
com mu nicated.
Data is material. I nfo rm ati on s g ath e ri n g_Al!_rn4_%qa-t"
i qi!.-
Data is used for producing information. lnformation is used for deGion ffi*n,
calculatinq or exchanqinq rdeas and plans.
Data is raw materials wh ich is lnformation is data that has been
unprocessed for data processing. lt is processed, it can be useful for the person
normally entered by rnput devices into receiving since it brings meaning. lt can be
computer and it can be in any form, understand by human and normally convey
usable or not. lt does bring meaning; by output device to people.
some of them are even in com puter
lanq uaqe.
F Topic: Whv lnformation is i Kev Re

lm portance of lnformation :
lnformation is the most valuable resources in an organization lt is collected on any amount of different items
and used by managers to make strategic decisions concerning the organization. The basic importances of
information are:
Page 1 of 6
 +ra.
lnformation technology is fundamental to the success of any business,
.*.\ I
The information that is collected and/or assembled in any business is as valuable a resource as capital
or people,
'+ra
lnformation may cover:
r/. r Market trends;
v' t Buying preferences;
l' r Customer profiles.
It may be processed, summarized, and analyzed by computers before being used by manager as the
basis for decision-making;
lnformation must produce:
v r' Accurate;
v r Complete;

lnformation Svstem:
syste nin1ti91..9l pe-gp_lg_|rgqrya.re,__q-o-ltlv*Aler_c__o-Ulllgllcetion
'iii- _n_etwor(and
that Zn'o-dls'seminai6f iiiiijimation ,n- oiganizefion -ln--bihei- way
em is gjpg p-p_q-plS tq- cp!19.!t, o1gq11i1q 1nd.gse_ i1!oi13ti91

lmpact of lnformation Svstem in Orqanization and Business Firm:

lnformation systems have great impact in economics of an organization. lt is the interactive tools deeply
involved in decision rnaking of large organization. The major impact of information system is as follows:
= /b ' Meeting global challenges;
:) '. Capturing opportunities in the marketplace;
+ Supporting corporate strategy;
'b ' Linking department whose functions are different;
1\r ' Enhancing worl<er productivity;
-r. . lncreasing the quality of goods and services.
Relationship between Orqanization and lnformation Svstems:
lnformation systems and Organization have a q!g,s-g a1{ ggmple4 19latigngh1p, Both influence each other by
many mediating factors including the organization's structure, standard operating procedures, politics, culture,
surrounding environment and management decision.

# Topic: Attributes of lnformation:

Attributes of lnformation :
The irnportant attributes of useful and effective information are as follows:
--V ' Availability-lt is one of the most important property of information. lnformation must be available when
/ need otherwise it is useless. Data is organized in the form of facts and figures in Oiiabase anO-file so
that various information can create as per specific purposes and need ;

=,.1 '
Purpose-lnformation {IV-g-t llgyg p-u1pggeg at the time when it is transmitted to the person and/or
machine, otherwise is noimii Oita. fne bas ic purpose of information is to inform, evaluate, persuade
" and organize;
r Mode and format;
Decay-Value of information usually decays with time and usage and for these reasons it must be
refreshed from time to time. Example Score sheet of live cricket match;
I
Rate-The rate of transmission of information may be represented by the time required to understand a
particular situation. For machines the rate may be based on the number of bits of information per
character per unit of time;
Frequency;
I
Coinpleteness;
rl
Reliability-lnformation must be reliable from all side i.e. authenticity, correctness and technically for
using for decision making ;

Cost benefit analysis;

Validity-it measures the closeness of the information to be purpose which purports to serve.
'r Quality;
Tra ns pa re n cy;
. Value of information.

Page2ofG
 Topic: What is an Orqanization:

,,r
+Orqanization:
Organization i orking together in a structu inated fashio1 to achieve a set of
*g94s. The go fn=ii$6-,;"ry;ffnowf"Oit n oi vaiiJus
i6-cJt ctraitties, sociat
satisfaction etc. Based on proflt earning organization can be categorized in two types:
v" t Profit oriented (private sector);
s". Not for profit (charity/public sector).
lm portance of Orqanization :

Organizations enable people to be more productive. The major importance of organization is as follows:
v' .. Overcome people's individual limitations, whether physical or intellectual;
o,," Enable people to specialize in what they do best;
v' ' Save time, because people can work together or do two aspects of a different task at the same time;
9' i Accumulate and share knowledge;
w'r - Enable people to pool their expertise,
Enable synergy: the combined output of two or more individuals working together exceeds their
individual output.

Characteristics of Orqanization:
Organization is a social arrangement that pursues collective goals, controls its own performance and has a
boundary separating from its environment. The basic characteristics of organization are:
s'"-i Social arrangement;
v") Controlled performance;
v- r'_ Collective goal,
V'r Boundary.
Social Arrangement: lndividuals gathered together for a purpose.
Controlled Performance: Performance is monitored against the goals and adjusted if necessary to ensure the t

goals and adjusted if necessary to ensure the goals are accomplished.

Collective Goals: The organization has goals over and above the goals of the people within it.
Boundary: The organization is distinct from its environment.

How do Orqanization Differ:

Organlzations differ in many ways. Some of the factors of difference are:
-, i, Ownership,
v. Control;
rr'' - Activity;
Profit or non-profit orientation;
v-. Size;
w''i Legal status;
\z'r. Sources of finance,
v r Technology. I

#
t-
Topic. lfrformation Svstems at Different Levels of Manaqement:

lnformation Svstems in Different Organizational Levels:

Three main categories of information systems serve different organizational levels: operational-level systems,
management-level systems and strategic-level systems.

+:
( managers by keeping track of the activit es and transactions of the
receipts, cash deposits, payroll, cred low of materials in factory etc. The
ems at this level is to answer routine nd to track the flow of transactions

Management-level Systems:
These serve the monitoring, controlling, decision-making and administrative activities of the middle managers. lt
ensures that all the things of the organization are working well. Management-level systems typically provide
periodic reports rather than instant information on operations. Some management-level systems support non-
routine decision making. They tend to focus on less-structured decisions for which information requirements are
not always clear.

Page 3 of 6
=) Strategic-level Systems:
' lt helps senior management tackle and address strategic issues and long{erm trends, both in the firm and in
the external environrnent. Their principal concern is matching changes in the external environment with existing
organizational capability.

+
Tvpes of information
lnformation can be divided into two different types:
=r. 1) lnternal information
= ?2) External information

lnternal lnformation:
lnformation that has been generated from the operations of the organization at various functional areas. The
internal information gets processed and summarized from junior to top most level of management.

External information:
The external information is collected from the external environment of the business organization. External
information is considered to affect the organizational performance from outside the organization.

=)r According to a User's Request:

, 1) Passive information system;
2) lnteractive information system.

Passive lnformation System :

Passive information systems are systems that will answer queries based on the data that is held within them,
but the data is not altered. A simple example would be an electronic encyclopedia where queries can be used
to search for data and much valuable information can be learned, but the user is not allowed to alter the data.

lnteractive information system ;

An interactive system is one that data can be entered for processing which may alter the contents of the
database. An example would be the school secretary updating the attendance record of a pupil in the pupil file.

Knowledqe-based Svstem:
A knowledge-based system is a system where all the expert human knowledge covering a particular topic is
brought together and made available to the user through a computer system which uses the facts in its
knowledge base by applying rules that may sensible be applied to the knowledge.

Tvpes of Knowledqe-based Systems:

There are three different types of knowledge-based system and they are:
. Diagnostic;
. Advice giving;
. Decision rnaking.

Diagnostic: The user interface gives a series of questions, each of which has a limited number of possible
answers, each one of which leads to another question. Gradually, the amount of data in the knowledge base is
reduced until there is only a small amount of relevant data which must provide the answer to the query.

Advice giving: An advice giving system is one that follows some process being done and then offers advice on
how to proceed if sornething needs to be done or goes wrong.

Decision making: A decision making knowledge-based system is precisely that a systern which understands
what is happening in a system and has been given enough rules to be able to make and carry out decisions
without further intervention.

Knowledge Management:
The set of processes developed in an orgdnization to create, gather, maintain and disseminate the firnr's
knowledge. Knowledge rranagement is in this sense, an enabler of organ izational learn ing. Knowledge
managernent increases the ability of the organization to learn fronr the environment and to incorporate
knowledge into its buslness process.

Page 4 of 6
 Financial

Financial Reportinq Svstem:

Financial reporting involves all the procedures necessary to ensure that financial (and
operational) performance
of a department is clearly & effectively reported on to ftre relevant authorities. A primary objective
of any
financial accounting system is to provide accurate financial statements on a timely basis.

Functions of Financial Reportinq Specialists:

' Undertaking the monthry closure of accounts and producing reports;
' Compiling quarterly reports on departmental performance;
' Undertaking the annual closure of accounts and producing year-end reports;
' contributing to the production of the department's overall innual ,eport.

Financial Reportinq:
A primary objective of any financial accounting system is to provide accurate financial statements on a timely
basis. A frequent complaint is that a product won't produce the kind of financial reports a company
wants. yet,
considering the importance of financial reporting, users typically fail to fully consider financial
reporting
capabilities when evaluating products.
when it comes to financial reporting, many accounting software products incorporate two third-party products-
FRx and Crystal Reports
.into their packages rather tt an develop their own. And in recent years those two
products have become industry standards. when evaluating software, it should ask whether it works with FRx
or if it doesn't whether the built-in module exhibits comparab'le features. Here are some of
the key capabilities of
FRx:
' Produces financial statements with up to 256 columns;
' Links financial data from either a general ledger or other products such as a spreadsheet
or database
application;
' creates calculations such as expenses divided by units produced,
' Produces provisional financial statements-that is as all un-posted transactions have been posted;
' Views reports on screen and easily drills down from flnancial summary information into account
and
transaction details;
'. Sends e-mail reports direcfly to remote users from the report preview screen;
Exports and imports report to and from spreadsheets;
' Handles complex calculations such as conditional if-then statements;
' Provides a drag-and-drop utility in the reporting tree so users can see the financial effect of
restructuring;
' Creates virtual roll-up structures for reporting a different levels that is by store, city, state, territory
or
country;
' Prepares and distributes presentation quality reports using customized fonts, Color's and other
formatting options;
'. Compares revenue and expense figures for different departments by creating side-by-side
reports;
Operates in a client-server environment.

EJ".unt. Cou"r"d b ,
The elements cover by the financial reporting systems is:
' Rating ratios-Ratio is a relationship between two numbers of the same kind (e.g., objects, persons,
students, spoonfuls, units of whatever identical dimension), usually ,'j to b'; or a:b,
sometimes expressed arlthmetically as a dimensionless quotient of the "*pr".r"d"as
two that explicifly indicates how
many times the first number contains the second. Financial reporting is built-in ratio reporting.
' Graphics-Graphics are visual presentations on some surface, Examples aie graphsl
diagrams,
numbers, symbols, geometric designs or other images. Graphics often combine text,thiough
the"se the
financial position for certain area of an organization can be presented.
' Pivot tablets-ln data processing, a pivot table is a data summarization tool found in
data visualization
programs such as spreadsheets or business intelligence software. Among
other functions, a pivot-table
can automatically sort, count, total or give the average of the data storedln one table
or spreadsheet. lt
displays the results in a second table (called a "pivo[table") showing the summarized
data. pivot tables
are also useful for quickly creating un-weighted cross tabulations. the user sets up and
changes the
summary's structure by dragging and dropping fields graphically. This "rotation,' or pivoting
of the
summary table gives the concept its name. lt is one of the most powerful analytical tools;
' Event triggered reporting (Alarms);
' lnternationalfinancialreportingstandards;
. Objectives of financial statements;
Qualitative character of financial statements-lt includes understandability, reliability, comparability,
relevance, true and fair view/fair presentation.;
Elements of financial statements.

Page 5 of 6
 ^' 4-;

Securitv Policv of Financial Reportinq Svstems:

Finance and Administration (or designee) must document and maintain a list of all critical Financial Reporting
Systems along with other owners of the systems.
System owners are responsible for ensuring the following minimum standards:
. Access control;
. Segregation of duties;
' Review procedures;
. Audit reports for externally hosted vendor systems;
. Compliance.
Technical owners are responsible fof ensuring the following minimum standards:
. Antivirus controls;
. Auditing & review;
' Authentication and user identification;
'. Backup & recovery;
lncident response,
. Password;
. Physical security;
'. Security updates & patches
Segregation of duties;
. System warning banners.

Definition:
Business Owner: The business owner is the business executive or leader who is accountable for the primary
business functions performed by the Critical Financial Reporting system. This role will usually be a director level
or higher role within the institution.

System Owner: The system owner is the functional unit leader who is responsible for the critical financial
reporting system and its proper functioning. This role is responsible for ensuring that the critical financial
reporting system meets the business needs of the institution, including complying with relevant instltutional
policies. The systern owner is also responsible for determining appropriate roles and permissions for users of
the system and for ensuring appropriate use of the system. This role will usually be a director or manager level
position within the functional unit responsible for the business functions performed by the system.

Technical Owner: The technical owner is the individual who is responsible for ensuring that the technical
information technology components of the critical financial reporting system are properly implemented and
managed effectively. lnformation technology components may include operating systems, servers, applications,
databases, networks, etc. This role is usually a manager or director level lT staff member within either the
functional unit or central lT.

System Administrator: The system administrator is the individual responsible for the proper operational
configuration, management and functioning of one or more information technology components of the critical
financial reporting system such as an operating system, server, database, etc. This role is usually a staff level
lT position within either the functional unit or central lT.

The End

Page 6 of 6