Accounting Information Systems:

Essential Concepts and Applications

Fourth Edition by Wilkinson, Cerullo, Raval,
and Wong-On-Wing

Chapter 4: Data Management

Slides Authored by Somnath Bhattacharya, Ph.D.

Florida Atlantic University
Data
Data may be defined broadly
to include two interrelated components:
Data Models that provide structure to data
File Orientation
Data-base Orientation
Data values
A firms data resource involves four major
functions:
Record & Repository Creation
Repository Maintenance through additions and
updates
Data Retrieval
Data Archival and Removal
Entities
An Entity is an object, person, or event about which a
firm wants to collect and maintain data
Characteristics of Entities are Attributes
Each attribute stored in the system is a Data Element
There is usually a one-to-one correspondence between attributes
and data elements
A broadly defined attribute may have several specific attributes
and therefore data elements. e.g., Shipping Address
Street Address
City
State
Zip Code
Country
 Data Models
Data-base
Files Data bases
-

File Data-sets (or

Record Tables)
Data Element Record
Data Element

Figure 4-1
Data Elements
Every recorded attribute of an entity is a data
element
Field Length: This is the number of contiguous
positions required to store a data element
Data Type:
Character
Numeric
Date
Raw
Data Value
Some Specifics

Field 1 Field 2 Field 3

{
File
Field 1 Field 2 Field 3 Records

Field 1 Field 2 Field 3

File Classifications (Master
Files)
Master files: These contain (semi) permanent
data (records) pertaining to entities (people,
places, and things). Accounting related examples
include:
General and Subsidiary ledgers
General ledger master file
Customer/Accounts Receivable master file
Vendor/Accounts Payable master file
Inventory master file
Employee/Payroll master file
Open WIP master file
Standard cost master file
File Classification
(Transaction Files - I)
Transaction files: These contain records
pertaining to events currently being
processed, such as sales, receipts of goods,
etc.
Transaction files capture detailed transaction
data. They are counterparts to general and
special journals in manual systems
Transaction data are periodically posted to
related master file(s) and are then either
purged or archived
File Classification
(Transaction Files - II)
Accounting related transaction files include:
General/Special journal file (General ledger)
Sales/Cash receipts file (Accounts receivable)
Receiving/Purchases file, Cash disbursements
file (Inventory, Accounts payable)
Inventory issuance file/shipment file/sales
file/adjustments file (Inventory)
Payroll/Cash disbursements (Payroll)
Other File Classifications - I
Reference files: These contain tables or lists of data needed
for making calculations or for checking the accuracy of
input data. e.g., product price tables, customer lists, etc.
History files: These are also called archive files since they
contain records pertaining to completed transactions such
as past sales
Open files: These record incomplete transactions. Whereas
transaction files are purged or archived at the end of a
given period, open files remain indefinitely open. Only
individual records from Open files get purged as the
transaction actually occurs or does not. e.g., Open sales
order file Sales transaction file
Other File Classifications - II

Report files: These are derived from records

within master or transaction files. e.g., data
may be periodically extracted from the
Accounts Receivable master file to construct
an aging schedule
Backup file: This is a copy of a current file
generated so that the original file can be
recreated from it
Suspense file: This is a collection of those
records of a transaction file that appear to
contain erroneous or questionable data
Record-Key
Record keys: These are data elements within
records that serve as sort keys. e.g., customer-
account number
Two types of keys often used in master and
transaction file records are a primary key and one
or more secondary keys
A Primary key (also called a record key) is the attribute
that uniquely identifies a specific record. They are
usually of numeric or alphanumeric modes, e.g.,
customer number
A Secondary key is an attribute other than the primary
key and represents an alternative way to sort or access
records in a file, e.g., customer last name
Flags

Flags that are symbols or characters

used for control purposes, e.g., end-
of-batch flag.
Flags are not visible to the end-user.
It is a system-managed field that is
transparent to the user.
Logical View Versus Physical
Storage of Records - I
File structure pertains either to logical file
structures or to physical file structures
The logical file structure defines the users
perspective of a file. For example, each logical
record in a computerized customer master file
pertains to a particular customer
Data contained in logical records must necessarily
be physically mapped onto storage media
File organization refers to the methods by which
data in logical records are stored on physical
storage media
Logical View Versus Physical
Storage of Records - II
Files stored on physical media are seen as a
collection of physical records
Sometimes there may be a one-to-one
correspondence between logical and physical
records (unusual)
Sometimes a logical record may occupy more
than one physical record - typically on magnetic
disks
Sometimes two or more logical records may
occupy one physical record - typically on
magnetic tape
Design Considerations for
Records & Files - I
Managing files and records requires
the answering of questions such as:
How should the records be structured
What type of file organization and
access method (e.g., sequential,
indexed sequential, random) should be
used
How long should records be retained
Design Considerations for
Records & Files - II
The answers to the above questions
also depend in part on the requirements
of the application being designed
These requirements, in turn, are affected
by issues such as:
storage requirements
efficiency in file maintenance
accessibility of stored data
Establishing Record
Structures - I
The structure of a record is defined by its:
content
arrangement
modes of data fields
lengths of data fields
keys
Generally the primary keys are placed to
occupy the first fields of the records
Generally balance amounts or amounts of
transactions are placed in the last fields
Establishing Record
Structures - II
Transaction records are usually arranged
somewhat in accordance with the placement of
the elements on the source documents (e.g.,
sales invoices)
The modes and lengths of the fields depend on
the nature of data placed therein, while the
keys are expressed as codes
An important design issue is the extent to
which records should be consolidated. This
issue is especially important in relational
database normalizations and table designs
 File-Oriented Approach
to Data Storage

In the file-oriented approach to data

storage computer applications
maintain their own set of files
This traditional approach focuses
on individual applications,
each of which have a
limited number of users,
who view the data as
being owned by them
Deficiencies of the File-
Oriented Approach
Files and data elements used in more than one application
must be duplicated, which results in data redundancy
As a result of redundancy, the characteristics of data
elements and their values are likely to be inconsistent
Outputs usually consist of preprogrammed reports instead
of ad-hoc queries provided upon request. This results in
inaccessibility of data
Changes to current file-oriented applications cannot be
made easily, nor can new developments be quickly
realized, which results in inflexibility
It is difficult to represent complex objects using file
processing systems.
The Database Approach
to Data Storage
A database is a set of computer files that
minimizes data redundancy and is accessed by one
or more application programs for data processing
The database approach to data storage applies
whenever a database is established to serve two
or more applications, organizational units, or types
of users
A database management system (DBMS) is a
computer program that enables users to create,
modify, and utilize database information efficiently
Documenting Data in Data-
Base Systems

The Conceptual Data Model is the

logical grouping of data on entities
Two common Conceptual Data
Modeling techniques are:
The Data Dictionary
Entity-Relationship Diagrams
Data Dictionary
A data dictionary is a computer file that maintains
descriptive information about the items in a
database
Each computer record of the data dictionary
contains information about a single data item used
in an AIS
Examples of information that might be stored in a
data dictionary are source document(s) used to create
the data item, programs that update the data item
and classification information about the items length
and data type
Data Modeling Via the Entity-
Relationship Diagram - I
The Entity-Relationship Model is a high level
conceptual data model that specifies the
data base structure independent of any
specific DBMS (hierarchical, network,
relational, object-oriented)
It is only after completing the E-R model that
a particular DBMS is selected. Then the high
level model is mapped into schemas using
the DDL provided by a given DBMS
Entity-Relationship Diagram - II

In order to arrive at a specific E-R model, one must select the entities
first, and then define the relationship between them (cardinalities:
one-to-one, one-to-many, many-to-many)
Rectangle=Entity
Diamond=Relationship
Line=Links:
attribute to entity
entity to relationship
attribute to relationship
Sometimes we use ellipses to represent specific attributes of
entities, e.g., customer_#, student_last_name, etc.
To go from the ER model to a specific conceptual data model
(hierarchical, network, relational, object-oriented), we typically
assign attributes to the entities and relationships so as to obtain
fully specified pointers (hierarchical & network), and normalized
tables (relational)
Advantages of the
Database Approach
Efficient use of computerized storage space
Each subsystem has access to the others
information
All application programs utilize the same
computer file, thereby simplifying
operations
Fewer backup files for security purposes
Relieves some users from data-gathering
responsibilities in situations where these
users previously gathered their own
data
Disadvantages of the
Database Approach
Databases can be expensive to implement
because of hardware and software costs.
Additional software, storage, and network
resources must be used
A DBMS can only run in certain operating
environments,which makes some unsuitable
for certain alternate
hardware/operating system configurations
Because it is radically different from the file-
oriented approach, the database approach may
cause initial inertia, or complications and
resistance
Data-Flow Diagrams

A data-flow diagram shows the

physical and logical flows of data
through a transaction processing system
without regard to the time period when
each occurs
Physical devices that transform data are
not used in the logical diagrams
Because of the simplified focus, only
four symbols are needed
 Symbols used in Data Flow
Diagrams
A square represents an external data source or
data destination. The latter is also called a sink
A circle (or bubble) indicates an entity or a process
that changes or transforms data
A bubble can either be an internal entity in a physical DFD or a
process in a logical DFD
An open-ended rectangle or a set of parallel lines
represents a store or repository of data
The file may represent a view or a portion of a larger entity-wide
data base
A line with an arrow indicates the
direction of the flow of data
 Physical DFDs

A Physical DFD documents the physical

structure of an existing system. It answers
questions such as Where an entity works,
How an entity works, the work is done by Whom,
etc.
Given the very physical focus of a
physical DFD, it changes whenever the entities,
technology used to implement the system, etc.
changes
Physical DFDs have no lower levels
This limitation makes physical DFDs
cumbersome to work with, and usually of
limited value
Logical DFDs - I
Logical Data flow diagrams are
usually drawn in levels that include
increasing amounts of detail
A top level (or high-level) DFD that provides
an overall picture of an application or
system is called a context diagram
A context diagram is then decomposed,
or broken down, into successively lower
levels of detail
Logical DFDs - II

Logical Data flow diagrams

document the processes in an existing
or proposed system (What tasks)
Because the logic of a system changes
infrequently, relative to its physical nature,
a logical DFD will remain relatively
constant over time
Logical Data flow diagrams typically have
levels below the level-0 diagram
The Hierarchy of Data-
Flow Diagrams
T h e H ie r a r c h y o f D a t a F lo w D ia g r a m s

C o n t e x t D ia g r a m

P h y s ic a l D F D L e v e l- 0 lo g ic a l D F D
N o lo w e r le v e ls L o w e r le v e ls p o s s ib le

L e v e l 1 d ia g r a m ( s )

L e v e l 2 d ia g r a m s ( s ) , e t c .
 A Context Diagram

Process bubble
Customer Relevant Environment
comprised of External
Payment Cash Entities
Receipts }Boundary (border between a
system and its environment)
Process

Dataflows Deposit
(Interfaces) Bank
This is a flow connecting a system
with its environment
A Physical DFD
1. Bubbles are labeled
with nouns
2. Data flows & files have
Sales physical descriptions
Customer Cash Clerk Order &
register
1.0 tape Cashier
Form 66W 2.0
Verified
Sales Book- register tape Deposit slip
information & cash
Keeper
3.0
Blue sales book
Bank
 A Logical DFD
1) Bubbles are labeled with
verbs that describe the activity
taking place
1.0 2) Data flows & files have logical
Customer Payment Receive Receipts & descriptions
receipts summary
Payment
Verified receipts
Sales record
2.0
Compare 3.0
Cash & Prepare
Tape Deposit

Sales data 4.0 Verified receipts Deposit

Record summary
Sales Journal Sale Bank
 Accounting Information Systems:
Essential Concepts and Applications
Fourth Edition by Wilkinson, Cerullo,
Raval, and Wong-On-Wing

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