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Chapter 13-1 Data and Databases Chapter 13-2 Accounting Information Systems, 1st Edition Study Objectives 1. The need for data collection and storage 2. Methods of storing data and the interrelationship between storage and processing 3. The differences between batch processing and real-time processing 4. The importance of databases and the historical progression from flat-file databases to relational databases 5. The need for normalization of data in a relational database 6. Data warehouse and the use of a data warehouse to analyze data 7. The use of OLAP and data mining as analysis tools 8. Distributed databases and advantages of the use of distributed data 9. Controls for Data and Databases 10. Ethical issues related to data collection and storage, and their use in IT systems Chapter 13-3 The Need for Data Collection and Storage Data are the set of facts collected from transactions, whereas information is the interpretation of data that have been processed. Main reasons to store transaction data: 1. To complete transactions from beginning to end. 2. To follow up with customers or vendors and to expedite future transactions. 3. To create accounting reports and financial statements. 4. To provide feedback to management. Chapter 13-4 SO 1 The need for data collection and storage The Need for Data Collection and Storage Typical storage and processing techniques: 1. The storage media types for data: sequential and random access 2. Methods of processing data: batch and real time 3. Databases and relational databases 4. Data warehouses, data mining, and OLAP 5. Distributed data processing and distributed databases Chapter 13-5 SO 1 The need for data collection and storage The Need for Data Collection and Storage Concept Check Which of the following best describes the relationship between data and information? a. Data is interpreted information. b. Information is interpreted data. c. Data is more useful than information in decision making. d. Data and information are not related. Chapter 13-6 SO 1 The need for data collection and storage Storing and Accessing Data Data Storage Terminology Chapter 13-7 Character Record Field File Exhibit 13-1 Data Hierarchy Database SO 2 Methods of storing data and the interrelationship between storage and processing Storing and Accessing Data Data Storage Media Magnetic tape Sequential access Random Access Chapter 13-8 Early Days of Mainframe Computers Modern IT Systems SO 2 Methods of storing data and the interrelationship between storage and processing Storing and Accessing Data Concept Check A character is to a field as a. Water is to a pool. b. A pool is to a swimmer. c. A pool is to water. d. A glass is to water. Chapter 13-9 SO 2 Methods of storing data and the interrelationship between storage and processing Storing and Accessing Data Concept Check Magnetic tape is a form of a. Direct access media. b. Random access media. c. Sequential access media. d. Alphabetical access media. Chapter 13-10 SO 2 Methods of storing data and the interrelationship between storage and processing Data Processing Techniques Batch Processing Real-time Processing Exhibit 13-2 Comparison of Batch and Real-Time Processing Chapter 13-11 SO 3 The differences between batch processing and real-time processing Data Processing Techniques Concept Check Which of the following is not an advantage of using real-time data processing? a. Quick response time to support timely record keeping and customer satisfaction b. Efficiency for use with large volumes of data. c. Provides for random access of data. d. Improved accuracy due to the immediate recording of transactions. Chapter 13-12 SO 3 The differences between batch processing and real-time processing Databases Data stored in a form that allows the data to be easily accessed, retrieved, manipulated, and stored. Exhibit 13-3 Traditional FileOriented Approach Data redundancy Concurrency Chapter 13-13 SO 4 The importance of databases and the historical progression from flat-file databases to relational databases Databases Exhibit 13-3 Database Approach Relationships One-to-One Database Management System (DBMS) is software that manages the database and controls the access and use of data by individual users and applications. Chapter 13-14 One-to-Many Many-to-Many SO 4 The importance of databases and the historical progression from flat-file databases to relational databases The History of Databases Relational Database Model Developed in 1969 Stores data in two-dimensional tables Most widely used database structure today Examples include; IBM DB2, Oracle Database, and Microsoft Access Chapter 13-15 SO 4 The importance of databases and the historical progression from flat-file databases to relational databases The Need for Normalized Data Relational databases consist of several small tables. Small tables can be joined in ways that represent relationships among the data. Exhibit 13-6 Relational Database in Microsoft Access Bolded field is the primary key. Chapter 13-16 SO 5 The need for normalization of data in a relational database The Need for Normalized Data Relational database has flexibility in retrieving data. Structured query language (SQL) has become the industry standard. SELECT Customers.CustomerID, Customers.CompanyName, Orders.OrderID, Orders.ShippedDate FROM Customers INNER JOIN Orders ON Customers.CustomerID Orders.CustomerID; Chapter 13-17 Exhibit 13-7 Relational Database in Microsoft Access SO 5 The need for normalization of data in a relational database The Need for Normalized Data The process of converting data into tables that meet the definition of a relational database is called data normalization. Seven rules of data normalization, additive. Most relational databases are in third normal form. First three rules of data normalization are: 1. Eliminate repeating groups 2. Eliminate redundant data 3. Eliminate columns not dependent on primary key. Chapter 13-18 SO 5 The need for normalization of data in a relational database The Need for Normalized Data Trade-offs in Database Storage Relational database Not most efficient way to store data that will be used in other ways. Most organizations are willing to accept less transaction processing efficiency for better query opportunities. Chapter 13-19 SO 5 The need for normalization of data in a relational database The Need for Normalized Data Concept Check Which of the following statements is not true with regard to a relational database? a. It is flexible and useful for unplanned, ad hoc queries. b. It stores data in tables. c. It stores data in a tree formation. d. It is maintained on direct access devices. Chapter 13-20 SO 5 The need for normalization of data in a relational database Use of a Data Warehouse to Analyze Data Management often needs data from several fiscal periods from across the whole organization. Exhibit 13-8 The Data Warehouse and Operational Databases Chapter 13-21 SO 6 Data warehouse and the use of a data warehouse to analyze data Use of a Data Warehouse to Analyze Data Management often needs data from several fiscal periods from across the whole organization. Build the data warehouse Identify the data Standardize the data Cleanse, or scrub, the data Upload the data Chapter 13-22 SO 6 Data warehouse and the use of a data warehouse to analyze data Use of a Data Warehouse to Analyze Data Concept Check A collection of several years’ nonvolatile data used to support strategic decision-making is a(n) a. operational database. b. data warehouse. c. data mine. d. what-if simulation. Chapter 13-23 SO 6 Data warehouse and the use of a data warehouse to analyze data Data Analysis Tools Data mining is the process of searching for identifiable patterns in data that can be used to predict future behavior. OLAP is a set of software tools that allow online analysis of the data within a data warehouse. Analytical methods in OLAP usually include: Chapter 13-24 1. Drill down 4. Time series analysis 2. Consolidation 5. Exception reports 3. Pivoting 6. What-if simulations SO 7 The use of OLAP and data mining as analysis tools Data Analysis Tools Concept Check Data mining would be useful in all of the following situations except a. identifying hidden patterns in customers’ buying habits. b. assessing customer reactions to new products. c. Accessing customers’ payment histories. d. determining customers’ behavior patterns. Chapter 13-25 SO 7 The use of OLAP and data mining as analysis tools Distributed Data Processing Early days Centralized processing Centralized databases Today’s IT Environment Distributed data processing (DDP) Distributed databases (DDB) Chapter 13-26 SO 8 Distributed databases and advantages of the use of distributed data Distributed Data Processing Distributing the processing and data offers the following advantages: 1. Reduced hardware cost 2. Improved responsiveness 3. Easier incremental growth 4. Increased user control and user involvement 5. Automatic integrated backup The most popular type of distributed system is a client/server system. Chapter 13-27 SO 8 Distributed databases and advantages of the use of distributed data Distributed Data Processing Concept Check A set of small databases where data are collected, processed, and stored on multiple computers within a network is a a. Centralized database. b. Flat file database. c. Distributed database. d. High-impact process. Chapter 13-28 SO 8 Distributed databases and advantages of the use of distributed data IT Controls for Data and Databases To ensure integrity (completeness and accuracy) of data in the database, IT application controls should be used. These controls are input, processing, and output controls Chapter 13-29 Control techniques such as data validation, control totals and reconciliation, and reports that are analyzed by managers. SO 9 Controls for data and databases Copyright Copyright © 2008 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein. Chapter 13-30