Data are facts, which may or may not be processed and have no effect on the

users
Information is often defined simply as processed data and is meaningful and
useful to users.
System is a group of two or more interrelated components or subsystem that
serve a common purpose.
Information system is the set of formal procedures by which data are collected,
processed into information and distributed to the users
Management Information System may be defined as the means by which
information is provide to decision maker to allow them to make and implement the
necessary decisions to optimize the interrelationship of the available resources to
most effectively reach the organizations goal. It encompasses all data entering the
organization, all processing activities within the organization and all the information
that is or should be used by persons in the organization.
(PPT MIS)
Value added.
1. Managers are able to search, probe and find answer to non-recurring
questions that are not normally available in the report
2. They are given time to comprehend the scope of the problem for which they
are responsible
An MIS must be both effective and efficient.
Relevance ability to define and support necessary action by appropriate
persons
Accuracy information must be free from material errors
Completeness no piece of information essential to a decision or task should
be missing
Timeliness the age of information is a critical factor in determining its
usefulness. Information must be no older that the time of the action it
supports.
Conciseness summarizes only those items of information that are needed
Flexibility adaptable to changing conditions and needs
Economy benefits equal or exceed cost
Guidelines (PPT) in designing an efficient MIS, the ff guidelines must be followed
MIS deve (PPT)
Business info
Business information is not homogeneous. Different kinds of information are
required by various users. In order to handle effectively the information that
is entering, circulating, being generated and leaving business, it is necessary
to organize logical subsystems for handling data.

 There are 3 primary management information subsystem in a typical

business organization and a varying and indefinite number of secondary
subsystems
Primary MI Subsystem is one that effects the entire structure of an organization
Logistics Info System is concerned with the physical flow of inventories
and resources within and through the organization. This will generally be
the most adaptable to automation of all the management information
system
Financial Info System is concerned with the flow of financial resources
through the organization. Most financial systems are adaptable to
automation because of the characteristics of the data.
Personnel info system is concerned with the flow of information about
the people who work for the organization.
Secondary MI Subsystem is one that is confined to a single functional part of an
organization.
Research and Development information subsystem is concerned with
product development and research thrust of the organization
Strategic planning and policy making subsystem are concerned with vast
array of types and sources of information.
In many cases, accurate cost and financial information are required to support
decisions. An effective management information system will therefore provide an
organization with potential sources of improved efficiency in the use of the firms
resources, cost reduction, improved effectiveness, competitive advantage and
enhanced profitability.
Chapter 29
AIS is a subsystem of the financial information system, refer to the orderly
arrangement of procedures, personnel, records, equipment, and devices utilized for
a logical and orderly gathering, processing and reporting of financial and other
information essential to the efficient conduct and evaluation of the activities of a
business enterprise.
PPT (AIS)
Management consultants may also be asked by clients to evaluate the efficiency
and effectiveness of an existing accounting information system.
Essential elements
Procedures set of interrelated activities involving the originating, processing
and reporting of financial and other data

 Statement of accounting policies and standards

Records and reports necessary to gather, process, store, and transmit
financial and other information
Bookkeeping system or pro-forma accounting entries including
computational requirements
Personnel directly involved in the accounting work
Equipment and devices used in the system to expedite the work, provide
controls and minimize if not totally prevent fraud and errors.
Characteristics
1. The system should suit the business firms organizational structure and
policies
2. The system should be able to provide timely, pertinent, accurate and
effective reports needed by the management and other parties
3. The system should provide adequate controls to ensure the reliability and
accuracy of financial data, safeguard the assets and minimize errors and
fraud
4. The system should be design to facilitate the tracing of data processing steps
from the financial statements and reports to the source document
5. The system should consider the capabilities as well as the limitations of the
personnel who will be responsible for its implementation
6. The system should be simple yet workable, efficient and sufficiently flexible
to permit changes and modifications.