NOTE: These notes are prepared exclusively for the benefit of the students in the Department of Accounting & Law at the State University of New York at Albany. They are not to be used by others without the permission of J. Gangolly.

We build systems like the Wright brothers built airplanes-- build the whole thing, push it off a cliff, let it crash, and start over again.

R.M.Graham

If builders built buildings the same way that programmers wrote programs, the first woodpecker would destroy civilisation.

Gerald Weinberg

• Introduction
• What is a system?
• Different views of a system
  • A contextual view
  • A control view
• Attributes of complex systems
• Some basic concepts & strategies in the study of systems.
• References

We shall study the characteristics of a system, its attributes and some basic concepts and strategies for studying them. Our philosophy is that an accounting information system is merely a kind of an information system which in turn is a kind of a system. Therefore, the study of basic principles of systems in general and, information systems in particular, is important for a thorough understanding of accounting information systems. Our approach to the study of accounting information systems, as will become clear, is an engineering one, where one proceeds through a methodical path of specification, design, construction, testing & evaluation, operation and maintenance. A well engineered system is easy to understand, build, maintain, and upgrade.

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We will first define a system, define an information system and, finally define an accounting information system. It should be obvious that all information systems are systems but not all systems are information systems. A vending machine, for example, is a system that is not an information system. Similarly, all accounting information systems are information systems, but the reverse is not always the case. Human resource information systems, production scheduling systems, strategic planning systems are examples of information systems that are not accounting information systems.

What is a system?

A system is a set of inter-dependent components (some of which may be systems in their own right) which collectively accomplish certain objectives.

• Component
• Inter-dependency
• objectives (functions)

What is an information system:

An information system differs from other kinds of systems in that its objective is to monitor/document the operations of some other system, which we can call a target system. An information system can not exist without such a target system. For example, production activities would be the target system for a production scheduling system, human resources in the business operations would be the target system of a human resource information system, and so on. It is important to recognise that within a vending machine there is a component/sub-system that can be considered an information system. In some sense, every reactive system will have a subsystem that can be considered an information system whose objective is to monitor and control such a reactive system.

What is an accounting information system?

Being an information system, an accounting information system must have a target system. It should be obvious that the target system must be business operations in a narrow sense. Other non-accounting aspects of business operations are covered by information systems such as Human Resources Information System, Management Information System, Production Planning/Scheduling System, Strategic Planning System, and so on. The target system for an accounting system has to do with the aspects of business operations that have to do with accountability for the assets/liabilities of the enterprise, the determination of the results of operations that ultimately leads to the computation of comprehensive income, and the financial reporting aspects of business operations.

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Different views of a system:

A Contextual view:

Any system operates by interacting with its environment. The contextual view describes graphically the interaction of the system with the various entities in its environment. The interactions consist of dataflows from and to such entities.The contextual view clarifies the boundary of the system and its interfaces with the environment in which it operates.

A Control view:

Any system must manipulate certain variables in order to achieve its objectives. It determines the manipulation needed by processing its outputs/states in relation to certain control parameters.

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Attributes of Complex Systems: (Booch, 1994)

• Frequently, complexity takes the form of a hierarchy, whereby a complex system is composed of interrelated subsyatems that have in turn their own subsystems, and so on, until some lowest level of elementary components is reached (Courtois, 1985).
  
• The choice of what components in a system are primitive is relatively arbitrary and is largely up to the discretion of the observer of the system.
  
• Intracomponent linkages are generally stronger than intercomponent linkages (components of a system are loosely coupled, but components themseklves are cohesive) (Simon, 1985).
  
• Hierarchical systems are usually composed of only a few different kinds of subsystems in various combinations and arrangements (same components can be reused)(Simon, 1985).
  
• A complex system that works is invariably found to have evolved from a simple system that worked..... A complex system designed from scratch never works and can not be patched up to make it work. You have to start over, beginning with a system that works (Gall, 1986).
  

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Some basic concepts & strategies in the study of systems.

• Abstraction:"We have developed an exceptionally powerful technique for dealing with complexity. We abstract from it. Unable to master the entirety of a complex object, we choose to ignore the inessential details, dealing instead with the generalized, idealized model of the object" Wulf in Shaw, 1981).
• Formality:Rigor at each stage in the development of a system.
• Divide and conquer:Divide a complex problem into a set of simpler problems that can be solved.
• Hierarchical ordering:Order the simplification of the problem in "divide & conquer" in hierarchies.
• Cohesion & coupling:Modularise the system such that interactions within components (cohesion) is maximised and interactions between components (coupling) is minimised. This way, the impact of errors, when they arise, is localised and does not cascade through the system. Diagnosis of offending components is also made easier.
• Information hiding:Each module (or subsystem) must have available to it just the information that is needed by it.
• Conceptual integrity:Consistency in design.
• Completeness:Ensuring that the design meets all the specifications.
• Logical independence:Emphasis on the statement of system objectives in terms of logical functions independent of physical implementation.
• Correctness & Efficiency:Correct in the sense that the design meets all the user requirements. Efficient in that the system accomplishes the objectives with minimum computing resources.

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References

• Booch, G. (1994) Object-Oriented Analysis and Design with Applications, 2nd ed. Redwood City, California: The Benjamin Cummings Publishing Company, Inc.
• Courtois, P. (1985) On Time and Space Decomposition of Complex Structures. Communications of the ACM, vol. 28(6), p.596.
• Gall, J. (1986) Systemantics: How Systems Really Work and How They Fail, 2nd ed. Ann Arbor, MI : The General Systemantics Press.
• Simon, H. (1982) The Sciences of the Artificial. Cambridge, MA : The MIT Press.
• Martin, J. and McClure, C. (1988) Structured Techniques: The Basis for CASE, Revised ed. Englewood Cliffs, NJ : Prentice Hall.
• Shaw, M. (1981) ALPHARD: Form and Content. New York, NY: Springer-Verlag.

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Updated on September 11, 1996 by gangolly@cnsunix.albany.edu