AIS is a system that collects, records, stores, and processes financial data to produce report as an information for decision makers. It can: Use advanced technology (computer), or Be a simple paper-and-pencil system; or Be something in between. Technology is simply a tool to create, maintain, or improve a system.

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Accounting Information
Systems
(AIS)

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Introduction to
Accounting Information
Systems
Chapter 1

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Learning Objectives
 Explain what an accounting information system (AIS)
is and describe the basic functions it performs.
 Discuss why studying the design and management of
an AIS is important.
 Explain the role played by the AIS in a company’s
value chain and discuss ways that the AIS can add
value to a business.
 Describe and contrast the basic strategies and strategic
positions that a business can adopt.

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Accounting
 There is no single definition about the subject matter accounting.
There are different possible meanings which describes the nature
of Accounting
Accounting is the process of collecting, analyzing,
journalizing, summarizing and reporting financial activities of an
organization.
Accounting is a Business Languages which has its own rules
and procedures to communicate people in the financial activities
of the business.
Accounting is a field of area that provide financial and
managerial information for decision makers or users.

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Information and Data
 Information can be defined as Processed date which have meaning in its
content to the user
 Data are facts, figures numbers, words, names phrases and symbols that are
collected, recorded, stored, Represents something in the real world and
processed by data processing system intended to produce a useful output
information).
Figure 1.1 Input-process-output

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 Data is an important recourse of an organization.
 Organizations collect data about:
 Events that occur( Buying, Selling, Borrowing e.t.c)
 Resources that are affected by those events( Item, Money,
property e.t.c)
 Agents who participate in the events( Buyers, sellers,
employers e.t.c)
 Useful information help users to make decision
 The more and better information you have, the better
decisions you can made .

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 The followings are characteristics of useful information
 Relevance: it reduces uncertainty by helping you predict what will happen
or confirm what already has happened.
 Reliability: It is dependable, i.e. free from error or bias and faithfully
portrays events and activities.
 Completeness: It doesn’t leave out anything that’s important.
 Timelines: You get it in time to make your decision.
 Understandability: It’s presented in a manner that can be realize and use.
 Accessibility: you can get to it when you need it and in a format you can
use

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Why Do People Need Information?
Individuals
 For Entertainment and Enlightenment
Businesses
 For Decision making, problem solving and
control activities and resources

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System
 A system is a set of interrelated components that interact to achieve a goal.
 Most systems are composed of smaller subsystems each performing a specific
function important to and supportive of the larger system of which it is a
part.
Example:
 College of Business is a system composed of various departments, each of
which is a subsystem. Yet, at the same time, the College itself is a subsystem of
the university.
 Computer is another system which contains different hard wares and soft wares
interconnected to provide information to users.

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Accounting System
Figure 1.3 Several subsystems make up accounting system.

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Accounting Information System
(AIS)
 AIS is a system that collects, records, stores, and
processes financial data to produce report as an
information for decision makers.
 It can:
 Use advanced technology (computer), or
 Be a simple paper-and-pencil system; or
 Be something in between.
 Technology is simply a tool to create, maintain,
or improve a system.

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Components of AIS
Figure 1.2Components of an information system

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Why Study AIS?
 It’s fundamental to accounting: The primary objective of accounting is to
provide information useful to decision makers.
 The Accounting Education Change Commission recommended that the
accounting curriculum should provide students with a solid understanding
of three essential concepts:
 How the system that provides that information is designed, implemented
and used.
 How financial information is reported
 How information is used to make decisions

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 To understand how the accounting system
works.
 How to collect data about an organization’s activities and
transactions
 How to transform that data into information that
management can use to run the organization
 How to ensure the availability, reliability, and accuracy of that
information
 Auditors need to understand the systems that are used to
produce a company’s financial statements.
 Tax professionals need to understand enough about the
client’s AIS to be confident that the information used for tax
planning and compliance work is complete and accurate.

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Data Processing and Information
System

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Function of AIS
 What important functions the AIS does perform in
an organization?
1 It collects and stores data about activities
and transactions.
2 It processes data into information that is
useful for making decisions.
3 It provides adequate controls to safeguard
the organization’s assets.

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The Three Basic Functions Performed by
an AIS
1 To collect and store data about the organization’s
business activities and transactions efficiently and
effectively:
 Capture transaction data on source documents.
 Record transaction data in journals, which present a
chronological record of what occurred.
 Post data from journals to ledgers, which sort data by
account type.

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2 To provide management with information useful
for decision making:
 this information is provided in the form of reports
that fall into two main categories:
– financial statements
– managerial reports
3 To provide adequate internal controls:
 Ensure that the information produced by the system is
reliable.
 Ensure that business activities are performed efficiently and
in accordance with management’s objectives.
 Safeguard organizational assets.

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How an AIS Can Add Value to an
Organization?
 Improving the quality and reducing the
costs of products or services
 Improving efficiency
 Sharing knowledge
 Improving the internal control structure
 Improving decision making
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Documents and Procedures
used in an AIS
to collect and process
Transaction data

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The Data Processing Cycle
 The data processing cycle consists of four
steps:
1. Data input
2. Data storage
3. Data processing
4. Information Output

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The Data Processing Cycle
 The trigger for data input is usually business
activity. Data must be collected about:
1. Each event of interest
2. The resources affected by each event
3. The agents who participate in each event

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Data Processing Cycle:
 In Ethiopia case most businesses used paper
source documents to collect data and then
transferred that data into a computer.
and
 Some data are recorded directly through data entry
screens.

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Data Processing Cycle:
Data Input
 Control over data collection is improved by:
 Pre-numbering each source document.
 having the system automatically assign a sequential
number to each new transaction.
 utilizing source data automation.

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Common Source
Documents and Functions
Source Document Function
Sales order Take customer order.
Delivery ticket Deliver or ship order
Remittance advice Receive cash.
Deposit slip Deposit cash receipts.
Credit memo Adjust customer accounts
REVENUE CYCLE

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Check Pay for items.
Common Source
Documents and Functions
Source Document Function
Purchase order Order items.
Purchase requisition Request items.
Receiving report Receive items.
EXPENDITURE CYCLE

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Common Source
Documents and Functions
HUMAN RESOURCES CYCLE
W4 forms Collect employee
withholding data.
Time cards Record time worked
by employees.
Job time tickets Record time spent
on specific jobs.
Source Document Function

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Common Source Documents and
Functions
GENERAL LEDGER AND
REPORTING SYSTEM
Journal voucher Record entry posted to
general ledger.
Source Document Function

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Data Processing Cycle:
Data Processing
 Batch processing is the periodic updating of the
data stored about resources and agents.
 On-line, real-time processing is the immediate
updating as each transaction occurs

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Record Transaction Data
in Journals
 After transaction data have been captured on
source documents, the next step is to record the
data in a journal.
 A journal entry is made for each transaction
showing the accounts and amounts to be debited
and credited.

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Record Transaction Data
in Journals
 The general journal records infrequent or non-
routine transactions.
 Specialized journals simplify the process of
recording large numbers of repetitive
transactions.
 What are the four most common types of
transactions?

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Record Transaction Data
in Journals
1 Credit sales
2 Cash receipts
3 Purchases on account
4 Cash disbursements

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Record Transaction Data
in Journals
Sales Journal
Invoice Account Account Post
Date Number Debited Number Ref. Amount
Dec. 1 201 Lee Co. 120-122 3 800.00
Dec. 1 202 May Co. 120-033 3 700.00
Dec. 1 203 DLK Co. 120-111 3 900.00
TOTAL: 2,400.00
120/502
Page 5

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Post Transactions to Ledgers
 Ledgers are used to summarize the financial
status, including the current balance, of
individual accounts.
 The general ledger contains summary-level data
for every asset, liability, equity, revenue, and
expense account of an organization.

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Post Transactions to Ledgers…Cont.
 A subsidiary ledger records all the detailed data
for any general ledger account that has many
individual sub-accounts.
 What are some commonly used subsidiary
ledgers?
– accounts receivable
– inventory
– accounts payable

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Post Transactions to Ledgers…Cont.
 What is the general ledger account
corresponding to a subsidiary ledger called?
– control account
 A control account contains the total amount for
all individual accounts in the subsidiary ledger.

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Basic Subsystems in the AIS
1. The revenue cycle: involves activities of selling
goods or services and collecting payment for
those sales.
2. The expenditure cycle: involves activities of
buying and paying for goods or services used by
the organization.
3. The human resources/payroll cycle: involves
activities of hiring and paying employees.

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Basic Subsystems in the AIS..Cont.
4. The production cycle: involves activities
converting raw materials and labor into
finished goods.
5. The financing/administrating cycle: involves
activities of obtaining necessary funds to run
the organization, repay creditors, and distribute
profits to investors.

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Basic Subsystems in the AIS
Expenditure
Cycle
Human
Resources
Production
Cycle
Revenue
Cycle
Financing
Cycle
General Ledger & Reporting System

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Providing Information for Decision Making
 Decision making involves the following steps:
1. Identify the problem.
2. Select a method for solving the problem.
3. Collect data needed to execute the decision model.
4. Interpret the outputs of the model.
5. Evaluate the merits of each alternative.
6. Choose and execute the preferred solution.
 The second function of the AIS is to provide management with
information useful for decision making.
 The information an AIS provides falls into two main categories:
 Financial Statements
 Managerial Reports

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Financial Statements/Reports
 Prepare a trial balance.
 Make adjusting entries.
 Prepare the adjusted trial balance.
 Produce the income statement.
 Make closing entries.
 Produce the balance sheet.
 Prepare the statement of cash flows.

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Managerial Reports
 The AIS must also be able to provide managers
with detailed operational information about the
organization’s performance.
 Two important types of managerial reports are
– budget
– performance reports

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Managerial Reports
What is a budget?
 A budget is the formal expression of goals in
financial terms.
 One of the most common types of budget is a
cash budget.

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Managerial Reports
What is a performance report?
 A performance report lists the budgeted and
actual amounts of revenues and expenses and
also shows the variances, or differences,
between these two amounts.

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Eg. Monthly Performance Report
Budget Actual Variance
Sales $32,400 $31,500 ($900)
Cost of Goods 12,000 14,000 (2,000)
Gross Margin $20,400 $17,500 ($2,900)
Other Expenses 9,000 7,000 2,000
Operating Income$11,400 $10,500 ($900)
Managerial Reports

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Internal control of an AIS

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Internal Control Considerations
 The third function of an AIS is to provide adequate
internal controls to accomplish three basic
objectives:
1 Ensure that the information is reliable.
2 Ensure that business activities are
performed efficiently.
3 Safeguard organizational assets.

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Internal Control Considerations…Cont.
 What are important methods for accomplishing these objectives?
 Provide for adequate documentation of all business activities.
 Documentation allows management to verify that assigned
responsibilities were completed correctly.
 Design the AIS for effective segregation of duties.
 Segregation of duties refers to dividing responsibility for different
portions of a transaction among several people.
 functions should be performed by different people.
– authorizing transactions
– recording transactions
– maintaining custody of assets
 Maintaining rules and procedures about resource/asset usage

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System
Analysis Design
and
Documentation

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Introduction
 Every organization needs well defined information system
to perform basic functions in a better way so as to achieve
its objective.
 achieve its goal by Based on the type and scale, each
organization uses different information system.
 Organization can purchase Information System from the
shelf or developed by professionals/Companies
 Software Engineering Processes (SEP) have been
developed to assist in designing Computerized Information
System.

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 An organization system is driven by three things:
 Methodologies:-Comprehensive, multi-step
approaches to systems development
 Techniques:-Processes that are followed to
ensure that work is well thought-out, complete
and comprehensible to others on the project
team
 Tools:-Computer programs to assist in
application of techniques to the analysis and
design process.

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Types of Information Systems
and Systems Development
 Transaction Processing Systems (TPS)
 Automate handling of data about business activities
(transactions).
 Management Information Systems (MIS)
 Converts raw data from transaction processing system into
meaningful form.
 Decision Support Systems (DSS)
 Designed to help decision makers
 Provides interactive environment for decision making
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 There are eight serious steps involved in
developing a new computer system from scratch.
1. Fact finding.
2. Feasibility study.
3. System analysis.
4. System design.
5. Testing.
6. Implementation.
7. Documentation.
8. Evaluation/Maintenance
Systems Development Life Cycle

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1.Fact Finding
 Facts about existing systems can be
found out by:
 Asking questions (Interviews with users).
 Questionnaires (Completed by users).
 Observation (Watching how the work is
done at present).
 Inspection (Looking at existing
paperwork, screen displays, and filing
systems).

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2.Feasibility Study
 The aim of a feasibility study is to see if it is
possible to develop a system that can be
implemented and that will work at a reasonable
cost.
 The study ends when a decision whether or not to
proceed with the new system has been made.
 The results of the study are usually presented as a
feasibility report.

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Feasibility Study
 The feasibility study will normally include:
 A description of the tasks the system is required
to do.
 A preliminary design and initial costs for the
system.
 Alternative designs so that the most appropriate
can be chosen.
 A cost/benefit analysis.
 Conclusions as to whether or not the design is
worth implementing and which of the
alternatives should be chosen.

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3.System Analysis
 The analysis phase includes:
 The drawing of system flow charts and data flow
diagrams.
 The identification of the proposed system’s
objectives.
 Facts about the system that is going to be
replaced.
 An outline of any constraints or limits (e.g. lack
of time, money, or staff training).
 An updated cost/benefit analysis.
 An outline of any further developments of the
system.

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4. System Design
 The system design will identify:
 What outputs are required.
 What inputs are required.
 What data preparation is required (including
verification and validation).
 What codes (e.g. ‘M’ for ‘Male’; ‘’ for ‘Yes’)
can be used to reduce data inputting and
storage.
 What file structure and file design should be
implemented.
 How the hardware should be configured.
 What software should be used.

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5.Testing the system
 Once the system has been designed it should be
carefully tested before being implemented.
 This testing will include:
 Inputting error free data into the system to see if
error free outputs can be produced.
 Inputting data that contains errors into the
system to see if the validation procedures will
identify the errors.

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6.Implementing the system
 Once the system has been thoroughly tested
it can be implemented. That is constructing
the database or spreadsheet, and test it with
suitable working data.

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7. Documentation
 Any new system needs documentation.
 The two main types of documentation are:
 User documentation (this is also known as the
user guide and should explain – in non-
technical terms – how the user can use the
system).
 Technical documentation (this is used to
explain to a specialist how the system works).

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8. System evaluation
 Once a new system is up and running it
should regularly be reviewed to ensure that
it continues to do the job for which it was
designed.
 This can be done in a variety of ways, one of
which includes asking the people who use it
whether or not it needs improvement.

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The stages of project
management
 There are five stages in the software design
process.
 These are:
 Identify.
 Analyse.
 Design.
 Implement.
 Evaluate.

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The stages of project
management
 Although project
management is a
mainly linear
process, feedback
and design changes
will often mean that
steps in the process
have to be revisited
so that necessary
changes can be
incorporated.
Identify
Analyse
Design
Implement
Evaluate

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System Modeling
 Model is a representation of real world
things and activities.
 System design uses different graphical
or symbolical model to represent
system design in a simplest way.
 It helps to understand the system
easily.

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The followings are most known graphical
models.
Data Flow Diagrams(DFD)
Flow Charts (FC)
Entities Relational Diagram(ERD)
Computer system flowcharts

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Data Flow Diagrams
 A data flow diagram (DFD) graphically
describes the flow of data within an
organization.
 It is used to document existing systems and to
plan and design new ones.
 A data flow diagram is composed of the
following four basic elements:
 Data sources and destinations
 Data flows
 Transformation processes
 Data stores

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A data source or data destination
symbol on the DFD represents an organization or
individual that sends or receives data that they
system uses or produces.
A data flow represents the flow of data
between processes, data stores and data sources
and destinations.
A process represents the transformations of
data.
A data store is a temporary or permanent
repository of data.

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Data
Source
(A)
Process
(C)
Process
(F)
Data
Destination
(K)
Data
Destination (J)
Data Flow (B) Data Flow (D)
Data Flow (E)
Data Store (H)
Data Flow (G)
Data Flow (I)
Data Flow Diagram Process

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Customer
(A)
Process
Payment
(C)
Update
Receivable
(F)
Credit
Manager
(K)
Bank (J)
Payment
Data (B)
Remittance
Data (D)
Deposit (E)
Account
Receivable (H)
Data Flow (G)
Receivable
Data (I)
Customer Credit Sales Collection DFD
Recipt (L)

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 Data flow diagrams are subdivided into
successively lower levels in order to provide
increasing amounts of detail.

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 The highest-level DFD is referred to as a
context diagram.
Customer
Payment
Process
Payment Data
Payment
Confirmation Data

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Exercise
Use the following information to draw context
payroll DFD.
 The payroll processing system...
 receives employee data from the human resources
department.
 receives time cards from different departments.
 When these data are processed and the
system produces...
 tax reports and payments for governmental agencies.
 employee paychecks a check to deposit in the payroll account
at the bank.
 management payroll reports.

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Human
Resource
(A)
Payroll
Process
(E)
Government
Agency
(L)
Bank (H)
Time Card
Data (D)
Tax Report
Data (K)
Payroll Info. (I)
Payroll File (F)
Pay check (G)
Payroll Processing System DFD
Departments
(C)
Employee
Data (B)
Management (J)
Payroll Info. (E)

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Flowcharts
 A flowchart is an analytical technique
used to describe some aspect of an
information system in a clear, concise,
and logical manner.
 Flowcharts use a standard set of
symbols to pictorially describe
transaction processing procedures.

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Flowchart Symbols
 Flowcharting symbols can be divided into the
following four categories:
1 Input/output symbols
2 Processing symbols
3 Storage symbols
4 Flow and miscellaneous symbols

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Some Input Output Symbols

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Some Processing Symbols

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Some Storage Symbols

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Some Flow
and Miscellaneous Symbols

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Types of Flow Chart
 There are different flow charts:-
 Document Flow Chart: illustrates the flow of
documents and information between areas of responsibility
within an organization. A document flowchart is
particularly useful in analyzing the adequacy of control
procedures.
 System Flow Chart: depict the relationship among the
input, processing, and output of an AIS. It begins by
identifying both the inputs that enter the system and their
origins. It is an important tool of system analysis, design,
and evaluation.
 Program Flow Chart: describes the specific logic to
perform a process shown on a systems flowchart. A flow
line connects the symbols and indicates the sequence of
operations. The processing symbol represents a data
movement or arithmetic calculation

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Program Flowcharts

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Flowchart for Processing
Credit Orders

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Differences Between DFDs and
Flowcharts
 DFDs emphasize the flow of data and what is
happening in a system, whereas a flowchart emphasizes
the flow of documents or records containing data.
 DFDs represents the logical flow of data, whereas a
flowchart represents also the physical flow of data.
 DFDs make use of only four symbols. Flowcharts use
many symbols and thus can show more detail.

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System Characteristics
 Mostly small system may not encounter system
failure after they have been implemented.
 Complex and high scale system may face the
following problems:
 Entropy or Disorder
 Coupling Problem

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Class work
Use the following information to draw DFD.
 The Credit Sales System...
 receives Sales order Data from the Customer.
 Checking customer account, approved order and send
to Shipment Section
 The shipment Section also process the shipment task
and send an item with Credit Invoice to the customer.
 Customer accounts files also updated for future
collection.
 Credit manager will receives customer invoice
information .

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Class work
Use the following information to draw DFD.
 The Purchase System...
 Receives Purchase request Data from
Store.
 Process Purchase request data and send purchase
request for suppliers.
 Receive Performa/quotation from suppliers.
 Send purchase order to awarded supplier.
 Receive credit invoice with item
 Process invoice to payment and issued check to
supplier.
 Update supplier account.

91. Database System
 It is a computerized record keeping system
used to:
 Adding new data to the file
 Retrieving data from existing file.
 Modifying data in to an existing file.
 Deleting data from existing file.
 Searching for target information.

92. Alternative Approaches of data
handling
 Manual Approach
 Typing the data on paper and put in a file cabinet
Advantage
 Works well if the number of items to be stored is small
Disadvantage
 Data loss: if damaged unable to reallocate.
 Redundancy: multiple copies of the same data with in the
organization.
 Inconsistency: Modifications are not reflected on all multiple
copies.
 Easy to make error: since the work is done by human it is easy
to make mistake

93.  File Based Approach
 Early attempt to computerize the manual filing system.
 It is a collection of application programs that perform services for the
end users.
 Each program defines and manages its own data.
 Programming language were used
Advantage
 Used for non relational and unrelated data types
Disadvantage
 Separation/Isolation of data: no relation b/n files.
 Duplication of data: Same data store in multiple files.
 Data dependency: changes to an existing structure are difficult to make.
 Incompatible file format: the structure of file is dependent on the
application program

94.  Database Approach
 Is a collection of related data in an organized way.
Advantage
 Used to manage large data .
 Reduce paper work
 Searching is easy and fast
 Less data redundancy
 Data sharing is easy
 Improved data integrity
 Improved data security
 Improved back up and recovery services.

95. What is a database?
 It is a computerized record keeping system, which stores
similar data in an organized way.
 The over all purpose of a database system is to store
information and to allow users to add, delete, retrieve, search,
and update the data upon request.
 Some examples of databases you may encounter in your daily
life are:
School or college system
Bank and Insurance system
Airline reservation system
Hotel reservation System
Product management System e. t. c

96. Why do we need a database?
 The ultimate goal of a database management system is
providing accurate relevant and meaning full information.

97. Relational databases
 In relational databases, fields can be used in a
number of ways (and can be of variable length),
provided that they are linked in tables.
 It is developed based on a database model that
provides for logical connections among files (known
as tables) by including identifying data from one
table in another table

98. Database Management System
 DBMS is a software that enables users to define, create,
maintains and control access to the database.
Ex. MS Access, FoxPro, SQL Server, MySQL, Oracle e.t.c.
 Database management systems (or DBMSs) can be divided
into two categories -- desktop databases and server
databases.
 Desktop databases are oriented toward single-user
applications and reside on standard personal computers
(hence the term desktop).
 Server databases contain mechanisms to ensure the
reliability and consistency of data and are geared toward
multi-user applications.

99. Component of a Database System
 Data: core component of the database
system.
 Hardware: The processor, storage media
and the memory of the computer system.
 Software: the data management system
allows the user to interact with the data.
 Users: application user, database
administrator, and end user.

100. Three level Architecture of a Database System
 The three levels architecture is a standard designed by ANSI( American
Network Standard Institution) and is applicable to many modern
database systems.
They are:
1. External Level (user View)
2. Conceptual Level (Conceptual Schema)
3. Internal (physical) Level (Internal Schema)
 The objective of the three levels architecture is to separate each user’s
view of the database from the way the database is physically
represented.
 That is, to provide users with an abstract view of data by hiding certain
details of how data is stored and manipulated.
Architecture of A DBMS

101. Levels of Abstraction
View 3View 2View 1
Physical schema
Conceptual schema
payroll recordsbilling
External
schemas

102. External Level
 The highest level of abstraction describes only some part of
the entire database.
 It is concerned with how individual users view the database
and Consists of a number of different external views of the
DB.
 The system provides many views for the same database.
 Describes part of the DB for particular group of users.
 It permits users to access data in a way that is customized to
their needs, so that the same data can be seen by different
users in different ways, at the same time.

103. Conceptual Level
 It is the community view of the database as seen by the
DBA (Database Administrator).
 It is a representation of the entire information in a
particular enterprise.
 This is the next higher level of abstraction next to internal
level.
 Describe what data are stored in the database, and what
relationships exist among those data.
 It includes Entity-Relationship modeling, security and
integrity constraint.
 The user of logical level does not need be aware of this
complexity.

104. Internal Level
 It is the one closest to physical storage.
 It concerned with the way the data is physically stored
 It is the way DBMS and the OS perceive the data
 It is concerned with how fields are represented, what
physical sequence the stored records are in
 Contains the specifications for how data from a conceptual
level are stored in a computer secondary memory.
 It deals with assembly and similar language commands

105. Abstract View of Data
 A DBMS is a collection of interrelated files and a
set of programs that allow users to access and
modify these files.
 The major purpose of a database system is to
provide users with an abstract view of the data.
 That is, the system hides certain details of how the
data is stored and maintained.

106. Instance and Schemas
 Database change over time as information is inserted and
deleted.
 The collection of information stored in the database at a
particular moment is called an instance of the database.
 The over all design of the database is called schema.
 Schemas are not changed frequently.
 Database systems have several schemas, partitioned
according to the level of abstraction that we discussed.
 At the lower level is the Physical Schema: at the
intermediate level is the logical schema: and at the highest
level is a subschema.

107. Mapping
 DBMS is responsible for mapping between the 3
types of schema.
 The conceptual schema is related to the internal
schema through a conceptual/Internal mapping.
 Each external schema is related to the conceptual
schema by the External/Conceptual mapping.

108. Data Independency
 The ability to modify a schema definition in one level
without affecting a schema definition in the next higher
level is called data independence.
 There are two levels of data independence:-
1. Physical data Independence: is the ability to modify the
physical schema without causing application programs to be
rewritten. Modifications at the physical level are occasionally
necessary to improve performance.
2. Logical data independence: is the ability to modify the logical
schema without causing application programs to be rewritten.
Modifications at the logical level are necessary whenever the
logical structure of the database is altered

109. Entity Relational Model
 An Entity is an object represent real world . It can be person,
place, object, event, concept, ideas e.t.c
 Entity Set: is A collection of similar entities. E.g., all employees in
the organization.
 Entity Type - is a collection of entities that share common
properties or characteristics.
 Relationship: is an association between two or more entities that
is of particular interest
 An Entity-Relationship Model (ERM) is a model that provides
a high-level description of a conceptual data model.
 Data Modeling provides a graphical notation for representing such
data models in the form of entity-relationship diagram
Database Model

110. ER Diagram

111.  The whole purpose of ER modeling is to create an
accurate reflection of the real world in a database.
 The ER model doesn't actually give us a database
description.
 It gives us an intermediate step from which it is easy to
define a database
 ER model is based on the perception of real world that
consists of a set of basic objects called entities, and a
relationships among these objects.
 It was developed to facilitate database design by
allowing the specification of an enterprise schema,
which represents the overall logical structure of a
database.

112. Database Scheme
 We distinguish between a database scheme
(logical design) and a databases instance (data in
the database at a point in time)
 A relation scheme is a list of attributes and their
corresponding domains

113. Relational Model
 A relational model is a model that is perceived
by the user as table.
History
 The relational model was invented by E.F(Ted)
Code as a general model of data, and
subsequently maintained and developed by Chris
Date and Hugh Drawn.

114. Structure of Relational Database
 A relational database consists of a collection of tables, each
having a unique name
 A row in a table represents a relationship among a set of values.
 Thus a table represents a collection of relationships.
 There is a direct correspondence between the concept of a table
and the mathematical concept of relation.
 A substantial theory has been developed for relational database.

115. Entity…………(Cont)
 The ER data model is one of several semantic
data models; the semantic aspect of the model
lies in the attempt to represent the meaning of
the data.
 The ER model is extremely useful in mapping
the meanings and interactions of real world
enterprises on to a conceptual scheme.

116. ERM Symbols
 A data model in which information stored in a
database is viewed as sets of entities and sets of
relationships among entities.
 There are three basic notations that the ER
model employs entity sets, relationships and
attributes.

117. Entity
 Entity: something that exists and can be
distinguished from other entities
 Examples:
 Customer entities with unique security no.
 Account entities with unique account no.

118. Entity Set
 Entity Set is a set/collection of entities of the
same type
 Example:
 All of the account entities for a bank
 One entity can be members of more than one set.

119. Microsoft SQL Server 2000
 Microsoft SQL Server 2000 is a full-featured relational database
management system (RDBMS):
 It offers a variety of administrative tools to ease the burdens of
database development, maintenance and administration.
 It allows us to create, update and administer relational databases.
 A relational database is a collection of data items that can be
accessed and manipulated in many ways without actually
changing the organization of the tables (schema) within that
database.

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