Page 49 - Accounting Information Systems

20 PART I Overview of Accounting Information Systems

resources. For example, accounting monitors and records the movement of raw materials into production
and the sale of finished goods to customers. Accounting authorizes purchases of raw materials and the
disbursement of cash payments to vendors and employees. Accounting supports these functions with in-
formation but does not actively participate in the physical activities.

THE INFORMATION TECHNOLOGY FUNCTION
Returning to Figure 1-8, the final area to be discussed is the IT function. Like accounting, the IT function
is associated with the information resource. Its activities can be organized in a number of different ways.
One extreme structure is the centralized data processing approach; at the other extreme is the distributed
data processing approach. Most organizational structures fall somewhere between these extremes and
embody elements of both.

Centralized Data Processing
Under the centralized data processing model, all data processing is performed by one or more large com-
puters housed at a central site that serve users throughout the organization. Figure 1-9 illustrates this
approach in which IT activities are consolidated and managed as a shared organization resource. End
users compete for these resources on the basis of need. The IT function is usually treated as a cost center
whose operating costs are charged back to the end users. Figure 1-10 shows the IT areas of operation in
more detail. These include database administration, data processing, and systems development and main-
tenance. The key functions of each of these areas are described next.

DATABASE ADMINISTRATION. Centrally organized companies maintain their data resources in a
central location that is shared by all end users. In this shared data arrangement, a special independent
group—database administration—headed by the database administrator is responsible for the security and
integrity of the database. We explore the database concept and the role of the database administrator in
Chapter 9.

FI GU RE
1-9 CENTRALIZED DATA PROCESSING APPROACH

Marketing

Finance

IT Services
Production

Data
Distribution

Information
Accounting
Cost Chargeback