MODULE I

INFORMATION
TECHNOLOGY (IT),
ACCOUNTING
INFORMATION SYSTEM
(AIS) AND ENTERPRISE
RESOURCE PLANNING
(ERP) SYSTEM

Module Author
JUDE CAPONPON, CPA, MBA, CTT

Accountancy Department
College of Accountancy
De La Salle University – Manila
Acquiring New Knowledge
Introduction to Information Technology

Definition
An Information Technology (IT) system is one that processes, stores, and transfers
information. Information can take many different forms including words, numbers, pictures,
sound, or video. These can all be represented in an IT system using nothing more complicated
than the binary digits one and zero. When information is stored and processed like this, it is often
referred to as data. An IT system could use computers, the telecommunications network, and
other programmable electronic devices. In fact, because of the importance of communications in
IT, the term ICT (Information and Communications Technology) is often used in preference to
IT.

Computer Hardware and Software

A computer is a system that manipulates data according to a set of instructions. Three elements
are required for a computer to perform useful tasks: hardware, software, and the
computer's user.

 The devices and components that make up a computer system are called hardware. Many
parts are contained within the computer's case. Other parts are connected to the computer
and are referred to as peripheral devices. Most peripherals allow information to be
entered (input) and retrieved (output).
 The instructions that a computer follows come from software (computer programs). A
basic software environment is established by the computer's Operating System (OS).
Software applications, such as word processors, spreadsheet programs, and payroll
programs, can be installed within the OS to extend the range of things that the computer
can be used to do. Having different software applications means that the same hardware
can be put to a variety of uses.
 Software provides an interface for the user to control the computer system. The user
creates data files by inputting information and selecting commands from the interface.

Basics of Computing and Processing

A good way to understand the functions of the different components of the PC is to think of them
working as interfaces. Input and output hardware devices, such as a mouse and a monitor,
provide an interface between the user and the computer; the operating system provides an
interface between hardware components and software applications. In general terms, this works
as follows:

 When a user selects a command (perhaps using a mouse to click an icon on the
application toolbar), the software application receives the command and, using the
 functions of the operating system, converts it into a series of instructions, which are
stored in system memory, commonly referred to as Random Access Memory (RAM).
Similarly, when a user types using the keyboard or scans a picture, the input is converted
to digital data and stored in memory.
 The Central Processing Unit (CPU) retrieves each instruction or data file from memory
and processes it.
 The CPU then writes the result back to memory and directs other components to perform
actions. For example, it may instruct the display subsystem to update the image shown to
the user or the storage subsystem to save data to a disk.
 All instructions and data processed by a computer are ultimately represented as strings of
1s and 0s. These 1s and 0s are represented as on or off states in the transistors that make
up CPU and RAM components. A CPU can process billions of these binary instructions
per second, which gives it the illusion of being able to "think".

Input, Output, Processing, Storage

These four functions represent most of the ways that data moves through a computer system:

 Input—the computer receives data entered by the user through peripheral devices, such
as mice, keyboards, scanners, cameras, and microphones.
 Processing—the data is written to memory and manipulated by the CPU, acting on
instructions from the operating system and applications software.
 Output—the processed data is shown or played to the user through an output device,
such as a monitor or loudspeaker system.
 Storage—the data may be written to different types of storage devices, such as hard disks
or optical discs, because data stored in most types of system memory is only preserved
while the computer is powered on.

Additionally, most computers are configured in networks, allowing them to exchange data. You
can think of networking as a special class of input and output, but it is probably more helpful to
conceive of it as a separate function.

Personal Computers
There are many different types of computers. Some of the first types of mainframe computers
created in the 1960s and 1970s are unrecognizable from the sorts of desktop and laptop
computers you may be familiar with. The term "Personal Computer" is generally understood to
apply to versions of the IBM PC, developed in 1981. The IBM PC was based on a
microprocessor or Central Processing Unit (CPU) designed by Intel. This is also called the x86
architecture or platform. This type of computer was fundamentally different from mainframes, as
it was operated directly by the end user.

While technologies and performance have completely transformed what we know as PCs from
the boxes available in 1981, most workstations and laptop personal computers designed for
home and office use are still based on the IBM PC design and x86 platform. As this PC platform
matured, it came to be associated with use of Microsoft's Windows operating system software.
Hardware and software development for PCs is often (but not exclusively) undertaken with
Windows compatibility in mind.

In the last couple of decades, however, personal computers have become available as much
smaller, more portable devices, such as tablets and smartphones. These devices can use
different hardware platforms and operating systems. This has been coupled with the growth of
the Internet as a global data communications network. As the miniaturization of electronics
continues, many "ordinary" appliances and systems are being designed with processing and
communications capabilities, creating an Internet of Things (IoT).

Desktop and Workstation Computers

A workstation type of PC is housed in a case that can sit on or under a desk. Consequently, they
are often referred to as desktop PCs or just as desktops. A desktop computer can be used
independently by a single user to run powerful software applications with many functions. It can
also be used as a network client to access shared resources.

Personal Computer System

Some of a PC's components are attached to a motherboard contained within the computer's
case. However, a desktop PC also requires the use of peripheral devices, connected to the
motherboard via ports aligned to holes in the case. Some peripheral devices, such as a mouse and
keyboard for input and a monitor for output, are essential. Others, such as speakers and
microphone or a printer, are optional.
The advantage of desktops is that the basic design can be modified with higher or lower specified
components and optional features, making a particular model better suited to different tasks. A
workstation-class computer with higher specification components, such as CPU and system
memory, will cost more but be able to process data faster. The computer's performance is largely
determined by the following factors:

 The speed of the CPU determines the basic speed of the computer.
 More system memory makes it possible to run more applications simultaneously and
process large amounts of data more quickly.
 The capacity of the main storage drive determines how much data can be stored on the
computer when it is switched off.
 Optional components extend the range of things the computer can do (for example, a
sound card makes it possible to play audio while a webcam allows sound and video
recording).
 The quality of peripherals such as the display, mouse, and keyboard make the computer
more comfortable to use (this is referred to as ergonomics).

Desktop PCs can also be purchased as "all-in-one" units. All-in-one means that the computer
components (except the keyboard and mouse) are contained within the monitor case.

Servers
A server is any computer providing services to other computers, but usually the term server
implies a powerful computer that supports a number of users simultaneously in a
computer network. Most servers use the same type of components as a desktop. The main
difference is that the components are more powerful and more reliable, and consequently more
expensive. If a desktop PC stops working, a single user may be unable to do their job; if a server
computer stops working, tens or even hundreds of users may not be able to do their jobs.
Consequently, servers need to be very reliable. This is achieved by specifying high quality
components, and also by using extra copies of components for redundancy. This makes a server
system fault tolerant.

Server systems are also usually designed to be easy to expand and upgrade with additional or
improved components. Very often, server computers use a special type of case designed to fit
into a steel rack shelving system.

Laptops
A laptop computer is one that integrates the display, system components, and input/output
devices within a single, portable case (or chassis).
 Features of a Laptop Computer

The main features distinguishing laptops from desktop PCs are:

 Size and weight—laptops weigh between 1 and 4 kg (2–9 lbs).

 Display type—laptops use flat-panel display technologies to provide lightweight,
slimline screens that are built into the case. Laptop screen sizes come in the ranges 11–
14", 15–16", and 17"+.
 Input devices—the main input devices are integrated into the case, such as a built-in
keyboard, a touchpad instead of mouse, and/or a touchscreen.
 Power source—portable computers can be run from internal battery packs as well as
from building power.
 Components—laptops often use different system components (CPU, RAM, and
graphics) that are smaller, lighter, and draw less power than desktop versions.
 Networking—portable computers typically use wireless radio technologies to connect to
networks rather than cabled connections.

Small laptops can also be described as notebooks and subnotebooks, while bigger models are
often called "desktop replacements." The term Ultrabook is used for laptops meeting a particular
Intel specification for performance, size/weight, and battery life. There are also hybrid laptops
that can be used like a tablet as well as like a traditional laptop.

PC Laptops and Vendors

Most companies producing PCs and laptops are referred to as Original Equipment
Manufacturers (OEM). This is because rather than making each component that goes into a PC,
they source components such as CPUs and RAM modules from manufacturers, and put them
together as a branded PC system.
While there are many vendors serving local and special interest markets, global PC
manufacturing is dominated by Dell, Hewlett-Packard (HP)/Compaq, Lenovo (previously IBM's
PC division), Acer, and Huawei. Samsung, Toshiba, and Asus are also strong in the laptop and
hybrid markets. Another personal computer vendor, Apple, ships Macintosh computers with a
different operating system (Apple Mac OS). Legacy systems utilize different hardware
architecture than that of the IBM PC-compatible vendors. There are also chrome books, which
are laptops built to run Chrome OS and interface primarily with Google's web apps.

The market for server computers is dominated by Dell, HP Enterprise (HPE), and Lenovo.

Smartphones and Tablets

A smartphone is a device with roughly the same functionality as a personal computer that can
be held in one hand. Previous handheld computers, known as Personal Digital Assistants (PDA),
and earlier types of mobile phones with some software functionality (feature phones), were
hampered by clumsy user interfaces. Modern smartphones use touchscreen displays, making
them much easier to operate. Most smartphones have a screen size between 4.5" and 5.7".

Smartphone

Prior to the Apple iPad, tablet PCs were usually laptops with touchscreens. The iPad defined a
new form factor; smaller than a laptop and with no keyboard. Tablet screens tend to be sized
between 7‖ and 10‖.

Many Windows mobile devices adopt a hybrid approach where a laptop can be converted into a
tablet by flipping the screen. Microsoft's Surface Pro tablet is available with a detachable
keyboard, which can also function as a cover for the screen. Other vendors are also producing
"two-in-one" devices that can function as both a laptop and a tablet.
The main smartphone and tablet vendors are Apple and Samsung. Other vendors include LG,
HTC, Huawei, Motorola/Lenovo, Microsoft, Nokia, Sony, and Amazon.

Internet of Things (IoT) Devices

Aside from devices easily recognizable as "computers," your home and office are quite likely
populated by other consumer electronics devices connected to each other and to the Internet.
The Internet of Things (IoT) refers to a world in which many different types of things are
embedded with processing and networking functionality. Processing and networking
functionality can be provisioned by very small chips, so the "things" can range from motor
vehicles and washing machines to clothing and birthday cards.

Home Automation
Pretty much anything from a clock to an alarm system or a refrigerator can be controlled over the
Internet by home automation software, if the appliance or device is "smart." Often, sitting at the
heart of this automation, is a smart hub to which other devices connect. Smart hubs are usually
controlled using voice recognition systems and smartphone apps. Some of the major vendors
include Amazon (Alexa voice recognition), Samsung (S Voice or Bixby), Apple (Siri), and
Logitech (working with either Alexa or Google Assistant), but there are many others.

One of the critical points in building a "smart" or "digital" home or office solution is ensuring
compatibility between the networking or communications standards supported by the hub and the
appliances. Most devices support ordinary Wi-Fi standards-based wireless networking, but some
may require connectivity standards designed for low power use, such as Z-Wave, ZigBee, or
Bluetooth LE.

Some of the specific home automation product categories include:

 Thermostats—monitor and adjust your home or office Heating, Ventilation, and Air
Conditioning (HVAC) controls from an app installed on your phone.
 Security systems—monitor and control alarms, locks, lighting, and videophone entry
systems remotely.
 IP cameras—often used for security, these devices connect to Internet Protocol (IP)-
based networks such as the Internet and support direct upload and sync to cloud storage
for remote monitoring.
 Home appliances—check the contents of your refrigerator from your smartphone while
out shopping or start the washing machine cycle so that it has finished just as you get
back to your house.
 Streaming media—play content stored on a storage device through any smart speaker or
TV connected to the home network.
Modern Cars and Drones
Modern motor vehicles use a substantial amount of electronics. As well as computer systems to
control the vehicle's engine and brakes, there may be embedded systems for in-vehicle
entertainment and for navigation (sat-nav) using Global Positioning Systems (GPS) to identify
the vehicle's precise location. Some vehicles are now also fitted with a "black box," or event data
recorder, that can log the car's telemetry (acceleration, braking, and position).

There are also sophisticated systems to control the vehicle on behalf of the driver, including
automatic collision detection and avoidance, and parking assist. Companies are experimenting
with fully-automated self-driving or autonomous vehicles.

Another rapidly developing sector is that of Unmanned Aerial Vehicles (UAV). This sector
ranges from full-size fixed wing aircraft to much smaller multi-rotor hover drones.

Medical Devices
Medical devices represent another class of devices where use of electronics to remotely monitor
and configure the appliance is expanding rapidly. It is important to recognize that use of these
devices is not confined to hospitals and clinics but includes portable devices such as cardiac
monitors/defibrillators and insulin pumps. These allow doctors and nurses to remotely monitor a
patient and potentially to adjust dosage levels or other settings without the patient having to visit
the care provider.

Gaming Consoles
A gaming console contains many of the same components as a workstation. Gaming consoles
have powerful CPUs and graphics processors, plus Ethernet and Wi-Fi for wired and wireless
home networking and Internet connectivity. Web cameras and microphones are also available as
peripherals. The main difference to a workstation is that a console is designed to be operated by a
gaming pad rather than a keyboard and mouse, though these are often also available as options.
A gaming console would use an HD (High Definition) TV for a display.
The market for consoles is dominated by Sony (PlayStation), Microsoft (Xbox), and Nintendo
(Wii and Switch).

There are also handheld game consoles, such as Nintendo's 3DS and Switch, and Sony's Vita.
These come with Wi-Fi to connect to the Internet or to other consoles.
LESSON 2 OVERVIEW OF ACCOUNTING INFORMATION SYSTEM AND
ENTERPRISE RESOURCE PLANNING (ERP)

Objectives
1. Demonstrate the connection between Information Technology and Accounting
2. Demonstrate the concepts of Accounting and Systems used in processing accounting
information

Introduction
An Accounting Information System (AIS) is a structure that a business uses to collect, store,
manage, process, retrieve, and report its financial data so it can be used by accountants,
consultants, business analysts, managers, chief financial officers (CFOs), auditors, regulators,
and tax agencies.

Specially trained accountants work in-depth with AIS to ensure the highest level of accuracy in a
company's financial transactions and record-keeping, as well as make financial data easily
available to those who legitimately need access to it—all while keeping data intact and secure.

Activating Prior Knowledge

Information Technology plays an integral role in every industry, helping companies improve
business processes, achieve cost efficiencies, drive revenue growth and maintain a competitive
advantage in the marketplace. With the introduction of computers, the business world was
changed forever. Using computers and software, businesses use information technology to
ensure their departments run smoothly. They use information technology in a number of different
departments including human resources, finance, manufacturing, and security.

For further recall on the basic topic of the Accounting Information System, watch the video link
attached for your viewing and understanding.

https://www.youtube.com/watch?v=z26LieCUVOo

These questions will help you understand the basic concepts and principles of Accounting
Information System (AIS) and it is being used by different business units and departments in
processing their financial and non-financial transactions.
Acquiring New Knowledge
Introduction to Information System
An Information System is a collection of hardware, software, data, people, and procedures
designed to support data-intensive applications and generate information that supports the day-
to-day, short-range, and long-range activities of users in an organization.

Types of Information Systems

Accounting Information System

The Accounting Information System consists of the records and methods used to initiate,
identify, analyze, classify, and record the organization’s transactions and to account for the
related assets and liabilities. The quality of information is that the accounting information system
generates impacts management’s ability to take actions and make decisions in connection with
the organization’s operations and to prepare reliable financial statements. An effective
accounting information system will:

- Identify and record all valid financial transactions

- Provide timely information about transactions in sufficient detail to permit proper
classification and financial reporting
- Accurately measure the financial value of transactions so their effects can be recorded in
financial statements
- Accurately record transactions in the time period in which they occurred

Enterprise Resource Planning

Enterprise Resource Planning (ERP) is business management software that allows an
organization to use a system of integrated applications to manage the business. It aims to serve as
a backbone for your whole business. ERP software integrates all facets of an operation, including
product planning, development, manufacturing processes, sales and marketing.
Advantages of Implementing an ERP Software
1. Drive standardization across the enterprise resulting in greater operational efficiencies
2. Enables greater focus on strategic activities
3. Potential for rapid deployment of technology
4. Shared IT development costs
5. Simplify IT technical footprint

Challenges in Implementing an ERP Software

1. Organizational change impact
2. Perception of setbacks
3. Discipline to maximize ERP software investment
4. Different implementation approach (solution driven vs requirements driven)

Business Benefits in Implementing an ERP Software

1. Time Saved
2. 24/7/365 Availability
3. Simplified IT Infrastructure
4. Reduced Fax Costs
5. FULL ERP Integration
6. Up and Running in Few Days

SAP Business One

- SAP Business One is a business management solution designed for small and midsize
businesses
- SAP Business One gives you instant access to real-time information through one single
system. The application is divided into a number of modules, each covering a different
business function.
- SAP Business One has a user-friendly interface that serves as your central ERP access
point, with standard interfaces to internal and external data sources, handheld computers,
and other analysis tools.

SAP Business One: A True ERP System

- SAP Business One represents a new breed of business software that is specifically
designed to meet today’s small and mid-size business needs and challenges. It completely
removes the needs and problems associated with having disconnected business processes
or systems.
- It integrates and streamlines all business functions across sales, marketing, customers,
financials and operations, all in a single system so your business operates like a seamless
one.
- It stores all critical business information in one database so you can instantly access
without having to get information from different systems that often don’t agree with each
other
- It provides built-in customer relationship management (CRM) tools that are fully
integrated to the back office operations to help you better manage sales and customer
services
- It’s also a flexible system that can be easily customized and tailor to your own business
and industry needs.
- SAP designed and built the product from the ground up, specifically for the small and
mid-size businesses so the users can leverage the best experiences without dealing with
complexities.

SAP Business One: Technology

- SAP Business One is based on a two-tier client/server architecture. The server runs a
database server as a central repository (Microsoft SQL Server). Most of the application
resides on the client (―fat client‖). This means that processing is carried out locally and is
largely independent of server performance.
- SAP offers a Software Development Kit (SDK) for SAP Business One. You can use this
KIT to add your own functions programmed in Visual Basic (VB), C/C++, and Java. The
SDK runs either on the server on the client depending on its purpose. An integration
platform (Bli) provides an interface to integrate SAP Business One to a larger company’s
system landscape.
- SAP Business One is shipped with a Service Manager and services for sending e-mails,
faxes, and SMS from SAP Business One (mail service) and creating regular database
backups (backup service). The Remote Support Platform (RSP) is an automated tool that
allows end-to-end support by proactively monitoring the health status and integrity of the
databases and sending results to SAP support.
- SAP Business One provides general functions that cover all business areas, as well as
certain innovative enhancements, such as Customer Relationship Management (CRM),
contact management, and user-defined values.
- Country versions are constantly being developed to fulfill country-specific requirements.
- The user interface has already been translated into most major languages, and users can
switch between the languages they need