Accouting and information system:

Part -A

1.(a) what is an accounting information system? discuss the concept of a system and the issues
of goal conflict and goal congruence.

Answer :An accounting information system (AIS) is a system that collects, stores, processes,
and communicates financial and accounting data within an organization. It is designed to
provide accurate and timely financial information to support decision-making, financial reporting,
and internal control processes.
Overall, an accounting information system plays a crucial role in managing financial information,
supporting decision-making, and ensuring compliance with accounting standards and
regulations.

A system can be defined as a set of interrelated components working together towards a

common goal. It can be a physical or abstract entity that has inputs, processes, outputs, and
feedback loops. Systems can be found in various domains, such as organizations, ecosystems,
or even the human body.

Goal conflict arises when the objectives of different components within a system are
incompatible or contradictory. This conflict can occur at different levels, such as between
individuals, departments, or even between different systems. For example, in an organization,
the sales department may have a goal of maximizing revenue, while the production department
may prioritize cost reduction. This conflict can lead to inefficiencies, lack of coordination, and
suboptimal outcomes for the overall system.

Goal congruence, on the other hand, refers to the alignment of objectives across different
components within a system. When there is goal congruence, the objectives of different parts of
the system are harmonious and supportive of the overall system's goals. This alignment
promotes cooperation, coordination, and synergy, leading to improved performance and
outcomes.

Achieving goal congruence can be challenging due to several factors. Firstly, different
components within a system may have their own unique goals and priorities, which may not
necessarily align with the overall system's objectives. Secondly, there may be limited resources
available, and different components may compete for these resources, leading to conflicts.
Additionally, there may be differences in values, perspectives, and interests among individuals
or groups within the system, further complicating the achievement of goal congruence.

To address goal conflict and promote goal congruence, it is essential to establish effective
communication channels, encourage collaboration, and foster a shared understanding of the
system's objectives. This can be achieved through clear goal setting, regular feedback
mechanisms, and creating a culture of cooperation and teamwork. Additionally, the system's
design and structure should be aligned with the desired goals to minimize conflicts and promote
congruence.

In conclusion, the concept of a system involves interrelated components working together

towards a common goal. Goal conflict and goal congruence are two important aspects of
systems. Goal conflict arises when the objectives of different components within a system are
incompatible, while goal congruence refers to the alignment of objectives across different
components. Achieving goal congruence requires effective communication, collaboration, and a
shared understanding of the system's objectives.

(b)Is AIS important topic to study? discuss

Answer : Yes, AIS (Accounting Information Systems) is an important topic to study. AIS refers to
the use of technology and information systems to collect, store, process, and report accounting
and financial data. Here are a few reasons why studying AIS is crucial:

1. Efficiency and accuracy: AIS helps automate various accounting processes, reducing manual
errors and improving the efficiency of financial operations. It enables faster data entry,
processing, and reporting, leading to more accurate and timely financial information.

2. Decision-making: AIS provides managers and decision-makers with real-time financial data
and reports, enabling them to make informed decisions. It helps in analyzing financial trends,
forecasting, budgeting, and evaluating the financial performance of an organization.

3. Internal controls: AIS plays a vital role in establishing and maintaining internal controls within
an organization. It helps in ensuring the accuracy, completeness, and reliability of financial data,
preventing fraud, and safeguarding assets.

4. Compliance: AIS assists in complying with various accounting and financial reporting
standards, regulations, and laws. It helps in generating financial statements, tax filings, and
other required reports accurately and in a timely manner.

5. Career opportunities: With the increasing reliance on technology in accounting and finance,
knowledge of AIS is highly valued by employers. Studying AIS can open up various career
opportunities in accounting, auditing, financial management, consulting, and information
systems.

In summary, studying AIS is important as it enhances efficiency, accuracy, decision-making,

internal controls, compliance, and career prospects in the field of accounting and finance.

2.(a) Differences betweeen E-commerce and E- business.

Answer : S.No.E-COMMERCEE-BUSINESS01.E-Commerce refers to the performing online
commercial activities, transactions over internet.E-Business refers to performing all type of
business activities through internet.02.E-Commerce is a narrow concept and it is considered as
a subset of E-Business.E-Business is a broad concept and it is considered as a superset of E-
Commerce.03.Commercial transactions are carried out in e-commerce.Business transactions
are carried out in e-business.04.In e-commerce transactions are limited.In e-business
transactions are not limited.05.It includes activities like buying and selling product, making
monetary transactions etc over internet.It includes activities like procurement of raw
materials/goods, customer education, supply activities buying and selling product, making
monetary transactions etc over internet.06.It usually requires the use of only a website.It
requires the use of multiple websites, CRMs, ERPs that connect different business
processes.07.It involves mandatory use of internet.It involves the use of internet, intranet or
extranet.08.E-commerce is more appropriate in Business to Customer (B2C) context.E-
business is more appropriate in Business to Business (B2B) context.09.E-Commerce covers
outward/external business process.E-Business covers internal as well as external business
process/activities.

2(b)what is EDI technology?

Answer: EDI stands for Electronic Data Interchange. It is a technology that allows the exchange
of structured business documents between different computer systems in a standardized
electronic format. EDI enables the automated and seamless transfer of data, such as purchase
orders, invoices, shipping notices, and other business documents, between trading partners. It
eliminates the need for manual data entry, reduces errors, improves efficiency, and enhances
communication and collaboration between businesses. EDI technology typically involves the
use of specific EDI standards, such as ANSI X12 or EDIFACT, and requires the use of EDI
software or services to facilitate the exchange of data.

3. whats is business ethics? Discuss the features of business ethics.

Answer: Business ethics refers to the moral principles and values that guide the behavior and
decision-making processes within an organization. It involves considering the impact of
business actions on various stakeholders, including employees, customers, suppliers,
shareholders, and the wider society. Business ethics aims to promote fairness, integrity,
transparency, and responsibility in all business activities.

The features of business ethics can be summarized as follows:

1. Moral principles: Business ethics is based on a set of moral principles that guide the behavior
of individuals and organizations. These principles often include honesty, fairness, respect,
trustworthiness, and accountability.

2. Stakeholder orientation: Business ethics recognizes the importance of considering the

interests and well-being of all stakeholders. It involves making decisions that balance the needs
of various stakeholders, rather than solely focusing on maximizing profits for shareholders.

3. Compliance with laws and regulations: Ethical behavior in business requires compliance with
all applicable laws and regulations. Organizations must ensure that their actions are legal and
do not violate any ethical standards set by society.
4. Transparency and accountability: Business ethics emphasizes the importance of
transparency in all business dealings. Organizations should be open and honest in their
communication, and individuals should be held accountable for their actions and decisions.

5. Social responsibility: Business ethics recognizes the responsibility of organizations to

contribute positively to society. This includes considering the environmental impact of business
operations, promoting diversity and inclusion, and engaging in philanthropic activities.

6. Ethical leadership: Ethical behavior starts at the top, with leaders setting the tone for the
organization. Ethical leaders act as role models, promoting and enforcing ethical standards
within the organization.

7. Ethical decision-making: Business ethics involves making decisions that are morally right and
just. This requires considering the potential consequences of actions, evaluating alternative
courses of action, and choosing the option that aligns with ethical principles.

8. Long-term perspective: Business ethics emphasizes the importance of long-term

sustainability and success. Organizations should not prioritize short-term gains at the expense
of long-term ethical considerations.

9. Continuous improvement: Business ethics is an ongoing process that requires continuous

improvement. Organizations should regularly review and update their ethical standards, policies,
and practices to adapt to changing societal expectations.
In summary, business ethics encompasses a set of moral principles and values that guide the
behavior and decision-making processes within organizations. It emphasizes stakeholder
orientation, compliance with laws, transparency, social responsibility, ethical leadership, and
continuous improvement.

4.(a) Define computer fraud. Give three examples of computer fraud.

Answer : Computer fraud refers to the intentional act of deceiving or manipulating computer
systems or networks for personal gain or to cause harm. It involves the use of technology to
commit fraudulent activities, often resulting in financial loss, data theft, or unauthorized access.
Three examples of computer fraud are:
1. Phishing: This involves sending deceptive emails or messages that appear to be from a
legitimate source, such as a bank or an online service provider. The aim is to trick recipients into
revealing sensitive information like passwords, credit card details, or social security numbers.
The fraudsters then use this information for identity theft or financial fraud.
2. Ransomware: This is a type of malicious software that encrypts a victim's files or locks them
out of their computer system until a ransom is paid. The fraudsters typically demand payment in
cryptocurrency, making it difficult to trace. Ransomware attacks can cause significant financial
losses and disrupt business operations.
3.. Insider fraud: This occurs when an individual with authorized access to computer systems or
networks misuses their privileges for personal gain. For example, an employee might
manipulate financial records, steal sensitive data, or exploit vulnerabilities in the system to
commit fraud. Insider fraud can be challenging to detect as the perpetrator has legitimate
access to the organization's resources.

4.(b) Define data processing cycle with diagram.

Answer : The data processing cycle, also known as the information processing cycle, is a series
of steps that data goes through to be processed and converted into useful information. It
consists of four main stages: input, processing, output, and storage. Here is a diagram
illustrating the data processing cycle:

1. Input: In this stage, data is collected and entered into the system. It can come from various
sources such as sensors, keyboards, scanners, or other devices. The input data is then
converted into a digital format that the computer can understand.

2. Processing: Once the data is inputted, it undergoes various operations and transformations to
produce meaningful information. This stage involves tasks such as sorting, filtering, calculating,
analyzing, and summarizing the data. Algorithms and software programs are used to process
the data according to the desired objectives.

3. Output: After the processing stage, the resulting information is presented to the user or sent
to another system for further use. The output can take different forms, including reports, graphs,
charts, visualizations, or even actions triggered by the processed data. It is important to ensure
that the output is accurate, relevant, and easily understandable by the intended audience.

4. Storage: In this final stage, the processed data and the resulting information are stored for
future use. It can be saved in databases, files, or other storage mediums. The stored data can
be retrieved and used for future processing or analysis, providing a valuable resource for
decision-making and future reference.

Overall, the data processing cycle is a continuous and iterative process, where data is
constantly being inputted, processed, outputted, and stored. This cycle enables organizations
and individuals to convert raw data into meaningful information, leading to better decision-
making, improved efficiency, and enhanced understanding of various phenomena.

Part- B
5(a) What is the role of Accounting information system in value chain?
Answer: The role of an Accounting Information System (AIS) in the value chain is to provide
accurate and timely financial information that supports decision-making and enhances the
overall efficiency and effectiveness of the value chain activities.
1. Inbound Logistics: AIS helps in tracking and managing the procurement process, including
recording and monitoring the receipt of raw materials, inventory management, and supplier
payments. It ensures that the right materials are available at the right time and at the right cost.
2. Operations: AIS provides information on production costs, labor costs, and overhead
expenses. It helps in monitoring and controlling the production process, optimizing resource
allocation, and identifying areas for cost reduction and process improvement.
3. Outbound Logistics: AIS tracks and records the movement of finished goods, manages
inventory levels, and facilitates order fulfillment and delivery. It provides information on sales,
customer orders, and distribution costs, enabling efficient order processing and timely delivery.
4. Marketing and Sales: AIS supports marketing and sales activities by providing information on
customer profitability, sales revenue, and marketing expenses. It helps in analyzing customer
behavior, identifying market trends, and evaluating the effectiveness of marketing campaigns.
5. Service: AIS assists in managing customer service activities by tracking and recording
service requests, monitoring service costs, and evaluating customer satisfaction. It helps in
identifying areas for service improvement and ensuring timely and effective resolution of
customer issues.
6. Firm Infrastructure: AIS plays a crucial role in managing the financial aspects of the
organization, including budgeting, financial reporting, and internal controls. It provides
information for strategic planning, performance evaluation, and decision-making at the
organizational level.
Overall, AIS integrates financial information across the value chain, enabling better coordination
and control of activities, improving decision-making, and enhancing the overall value creation
process.

5(b) Briefly explain E- business model with suitable example.

Answer:An e-business model refers to the strategy and structure that a company uses to
conduct its business activities online. It outlines how the company generates revenue, delivers
value to customers, and manages its operations in the digital realm.
One example of an e-business model is the online marketplace model, which is used by
companies like Amazon and eBay. These platforms connect buyers and sellers, allowing them
to conduct transactions online. The marketplace earns revenue by charging fees or
commissions on each transaction. They provide value to customers by offering a wide range of
products, competitive prices, and convenient shopping experiences. The operations of the
marketplace include managing the website, ensuring secure transactions, and providing
customer support.

6.(a) Discuss the control objectives for information and related technology, framework and the
committee of sponsoring organisation framework that are used to develop internal control
system.
Answer : The Control Objectives for Information and Related Technology (COBIT) framework
and the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
framework are two widely used frameworks for developing internal control systems.

1. COBIT framework:
- COBIT is a comprehensive framework that provides a set of control objectives for effective IT
governance and management. It helps organizations align their IT activities with business
objectives and ensure the reliable and secure use of information.
- The control objectives in COBIT are categorized into five domains: Evaluate, Direct, Monitor,
Acquire and Implement, and Deliver and Support. These domains cover various aspects of IT
governance, such as strategic alignment, risk management, resource management, and
performance measurement.
- The COBIT framework helps organizations establish control objectives that are specific,
measurable, achievable, relevant, and time-bound (SMART). It also provides guidance on how
to design and implement controls to achieve these objectives.

2. COSO framework:
- The COSO framework is a widely recognized internal control framework that focuses on
enterprise risk management (ERM). It provides a structured approach to identify, assess, and
manage risks that could impact an organization's ability to achieve its objectives.
- The COSO framework consists of five interrelated components: Control Environment, Risk
Assessment, Control Activities, Information and Communication, and Monitoring Activities.
These components work together to establish an effective internal control system.
- The control objectives in the COSO framework are designed to address risks related to
financial reporting, operations, compliance, and safeguarding of assets. They help organizations
ensure the reliability of financial statements, prevent fraud, and comply with laws and
regulations.
- The COSO framework emphasizes the importance of management's commitment to internal
control, the assessment of risks, the design and implementation of control activities, the
communication of information, and the ongoing monitoring of controls.

Both the COBIT and COSO frameworks provide organizations with a structured approach to
develop internal control systems. They help organizations identify control objectives, design and
implement controls, and monitor the effectiveness of these controls. By following these
frameworks, organizations can enhance the reliability, security, and effectiveness of their IT and
internal control systems.

6(b) Discuss the guidelines for a better coding system. Explain why this guidelines are important
and what would happen if they are not met.
answer: Creating and adhering to guidelines for a better coding system is crucial for
maintaining high-quality, maintainable, and scalable software. Such guidelines ensure
consistency across the codebase, improve collaboration among developers, reduce
bugs, and enhance the overall development process. Here are some essential
guidelines and their importance:

1.Consistent Code Formatting: Consistency in code formatting helps in easier code

readability. When all team members follow the same coding style (indentation, spacing,
naming conventions, etc.), it becomes easier to understand, review, and maintain code.
If this guideline is not followed, code can become difficult to read and may lead to
confusion, errors, and extra time spent during code reviews.

2.Meaningful Variable and Function Names: Using descriptive and meaningful names
for variables and functions improves code readability and maintainability. It helps other
developers understand the purpose and usage of code elements quickly. If this
guideline is not met, code readability suffers, leading to misunderstandings, increased
debugging efforts, and reduced productivity.

3.Modular and Reusable Code: Dividing code into smaller, modular components
promotes code reusability and maintainability. Reusable code reduces duplication,
improves consistency, and allows for faster development. Neglecting this guideline
results in code duplication, larger code files, and increased difficulty in making changes
without affecting other parts of the system.

4.Commenting and Documentation:

Properly documenting code, including comments for complex sections or functions,
ensures that other developers can understand the code's intent and implementation.
This is especially important when sharing code among team members or working on
open-source projects. Without adequate comments and documentation, understanding
the code can become a significant challenge, leading to mistakes and wasted time.

5.Version Control: Utilizing version control systems like Git is crucial for collaborative
coding. It enables tracking changes, reverting to previous versions, and managing code
collaboration among team members. Not adhering to version control practices can lead
to conflicting changes, code loss, and difficulty in maintaining a stable codebase.

6.Error Handling: Properly handling errors and exceptions is essential for robust code.
This ensures that the software gracefully handles unexpected scenarios and provides
meaningful error messages to users. Failing to implement adequate error handling can
lead to unexpected crashes, security vulnerabilities, and a negative user experience.

7.Testing and Quality Assurance: Writing unit tests and performing thorough quality
assurance (QA) processes help identify and fix bugs early in the development cycle.
This ensures that the software works as expected and maintains its stability over time.
Without adequate testing and QA, bugs can go unnoticed, leading to unreliable software
and potential customer dissatisfaction.

8.Security Considerations:
Coding guidelines should include best practices for secure coding to minimize the risk of
vulnerabilities and potential breaches. Ignoring security practices can result in security
loopholes and may lead to data breaches or unauthorized access to sensitive
information.

9.Performance Optimization: Encourage writing efficient code and optimizing

performance when needed. Following performance guidelines ensures that the software
performs well under various conditions. Neglecting performance considerations may
lead to sluggish and resource-intensive applications.

In summary, adhering to coding guidelines is essential for maintaining a healthy and

efficient codebase. Failure to meet these guidelines can lead to code that is hard to

read, maintain, and debug. Additionally, it can cause inefficiencies, introduce bugs, and

impact the overall productivity and reliability of the software. Embracing coding best

practices fosters a collaborative environment and helps deliver high-quality software

that meets user requirements and withstands the test of time.