Databases and Data Modeling for Accounting Information Systems

Databases and Data Modeling for Accounting Information Systems An Overview of Databases A database is a large collection of related data that are stored in computerized and linked files Not every collection of data is database

Databases and Data Modeling for Accounting Information Systems The importance of database to AISs Valuable information Volume Complexity Privacy Irreplaceable data Internet users

Databases and Data Modeling for Accounting Information Systems Storing Data in Databases To be useful, the data in an organization’s databases must be stored and organized efficiently. Three important concepts are : Data hierarchy Bit → character→ data field→ record→ file →database Record structures Record keys primary key Secondary key foreign key

Databases and Data Modeling for Accounting Information Systems How to Create Databases With REA The REA is a tool for designing databases. Using this model, an AIS captures data about an organization’s resources, events and agents (REA). Resources are an organization’s assets. Events are identifiable activities associated with a business processes. Agents are the people associated with business activities.

Databases and Data Modeling for Accounting Information Systems How to Create Databases With REA REA models requires some steps : Identify business and economic events . Identify entities Identify relationships among entities Create entity relationship diagrams Identify the attributes of data entities Create database tables and validate the database

Databases and Data Modeling for Accounting Information Systems How to Create Databases With REA Economic events : impact an organization's financial statements and are captured in accounting transactions . Business events : do not affect financial statement but can impact an organization in a value – added way . Database entities : include business and economic events + information about who and what was involved in those activities .

Databases and Data Modeling for Accounting Information Systems Entity-Relationship The cardinality of a relationship describes the number of occurrences of one entity that may be associated with a single occurrence of the other entity. One-to-one (1:1) One-to-many or many-to-one (1:N), (N:1) None to one or none to many ( 0:1) , (0:N) Many-to-many (N:N) Cardinalities provide useful information about the nature of the company being modeled and the business policies that it follows.

Databases and Data Modeling for Accounting Information Systems Entity-Relationship Diagrams An entity-relationship (ER) diagram graphically depicts a database’s contents. ← ovals denote attribute ← connecting lines show relationship ←a rectangle depicts of entity the diamond ←describe the Social Security number Hourly pay Rate Date Of hire Sales person Is made by Sale Sales person

Databases and Data Modeling for Accounting Information Systems Attributes of entities Two guidelines we can use to decide what to include as attributes of an entities : The attributes should describe one entity and that entity only . To keep in mind that the attributes included in the tables will drive the outputs of the database system.

Databases and Data Modeling for Accounting Information Systems Create Database Records A particular method used to organize records in a database is called the database’s structure. The objective is to develop this structure efficiently so that data can be accessed quickly and easily. Three types of structures are: 1) hierarchical 2) network 3) relational.

Databases and Data Modeling for Accounting Information Systems Hierarchical Structures Accounting data are often organized in a hierarchy. A hierarchical structure has successive levels of data in an inverted treelike pattern, also known as tree structures. Higher level records are parent records and lower level records are child records. Two records on same level are sibling records.

Databases and Data Modeling for Accounting Information Systems Network Structures Databases can use a network structure to link related records together and capture many-to-many relationships. The linking is accomplished with pointer fields. The pointers maintain the data relationships.

Databases and Data Modeling for Accounting Information Systems Relational Structures Relational databases are more flexible. Users can define relationships at the time the database is created or at later points in time.

Databases and Data Modeling for Accounting Information Systems Normalization Flat files are files with no sequence or order to them, except perhaps chronological. Flat files make it almost impossible to find a particular record easily or use file data productively. Normalization is a process of examining and arranging file data in a way that enables designers to avoid problems when these files are used or modified later.

Un-normalized Parking Ticket Data (0 Normal Form) Databases and Data Modeling for Accounting Information Systems Un-normalized Parking Ticket Data (0 Normal Form) Social Security Number Last Name First Name Phone No. License State Number Ticket No Date Code Fine 123-56-7783 Curry Dorothy (916)3584448 CA 123MCD 10151 10/15/98 A $10 10152 10/16/98 B $20 10121 11/12/98 134-56-7783 Fong May (916)5637865 253DAL 10231 10/23/98 C $50 12051 12/05/98

Databases and Data Modeling for Accounting Information Systems First Normal Form A database is in first normal form (1NF) if all the record’s attributes (data fields) are well defined and the information can thus be stored in a flat file. Problems: data redundancy insertion anomaly deletion anomaly

First Normal Form Social Security Number Last Name First Name Databases and Data Modeling for Accounting Information Systems First Normal Form Social Security Number Last Name First Name Phone No. License State Number Ticket No Date Code Fine 123-56-7783 Curry Dorothy (916)358-4448 CA 123MCD 10151 10/15/98 A $10 10152 10/16/98 B $20 10121 11/12/98 134-56-7783 Fong May (916)563-7865 253DAL 10231 10/23/98 C $50 12051 12/05/98

Databases and Data Modeling for Accounting Information Systems Second Normal Form * A database is in second normal form (2NF) if it is in first normal form and all the data items in each record depend on the record’s primary record key. * This approach results in a more efficient design and eliminates much of the first file’s data redundancy.

Second Normal Form Car Registration File Social Security Number Databases and Data Modeling for Accounting Information Systems Second Normal Form Car Registration File Social Security Number Last Name First Name Phone No. License Plate State Number 123-56-7783 Curry Dorothy (916)358-4448 CA 123MCD 134-56-7783 Fong May (916)563-7865 253DAL . Ticket File Ticket No Date Code Fine [License Plate] State Number 10151 10/15/98 A $10 CA 123MCD 10152 10/16/98 B $20 10121 11/12/98 10231 10/23/98 C $50 253DAL 12051 12/05/98

Databases and Data Modeling for Accounting Information Systems Third Normal Form Our goal is to create a database that is minimally in third normal form (3NF). A database is in third normal form if it is in second normal form and contains no transitive dependencies - i.e., no relationships in which data field A determines data field B.

Third Normal Form . Car Registration File Ticket File Databases and Data Modeling for Accounting Information Systems Third Normal Form Car Registration File Social Security Number Last Name First Name Phone No. License Plate State Number 123-56-7783 Curry Dorothy (916)358-4448 CA 123MCD 134-56-7783 Fong May (916)563-7865 253DAL . Ticket File Violation Code File Ticket No Date [Code] [License Plate] State Number 10151 10/15/98 A CA 123MCD 10152 10/16/98 B 10121 11/12/98 10231 10/23/98 C 253DAL 12051 12/05/98 Code Fine Explanation A $10 Meter expired B $20 Parking in no-parking zone C $50 No parking sticker

Database Management Systems Databases and Data Modeling for Accounting Information Systems Database Management Systems A database management systems (DBMS) is a set of separate computer programs that enable users to create, modify, and utilize database information more efficiently. The data definition language (DDL) of a DBMS enables users to define the record structure of any particular database table. The data manipulation language (DML) enables users to perform tasks such as querying, changing records and deleting records. Many relational databases support structured query language (SQL).

Databases and Data Modeling for Accounting Information Systems Data Normalization for Relational DBMS EMP# DEPT# EMP NAME JOB CODE JOB TITLE LOCATION HOURS WORKED 120 01 Abriel 1 Accountant New Orleans 37 08 Abrial Los Angeles 12 121 Bayer 45 21 New York 107 270 Boudreaux 2 Supervisor 10 Baudreaux 78 273 Wolbrette 3 Manager 22 274 Scanlon 41 279 Richards 27 20 51 301 Daly 16

data manipulation language (DML) Databases and Data Modeling for Accounting Information Systems data manipulation language (DML) The totality of information in a database and the relationships of its tables (records) is called the database schema. The database schema is a map or plan of the entire database. Any particular user or application program will be interested in only a subset of the schema, called the subschema. A database must be flexible enough to satisfy the subschema uses required.

Example: Schemas and Subschemas Databases and Data Modeling for Accounting Information Systems Example: Schemas and Subschemas Schema for a Customer Record ACCOUNT-NUMBER CUSTOMER-NAME CUSTOMER ADDRESS SALES-DIVISION CREDIT-LIMIT BALANCE CREDIT-TERMS TOT-YEARS-SALE DATE-RECENT-SALE Subschema for a Sales Order Entry Application ACCOUNT-NUMBER CUSTOMER-NAME CUSTOMER-ADDRESS CREDIT-LIMIT BALANCE CREDIT-TERMS Subschema for a Sales Analysis Application SALES-DIVISION TOT-YEARS-SALES

Operate Relational Database Using Query Language (DML) Databases and Data Modeling for Accounting Information Systems Operate Relational Database Using Query Language (DML) The SELECT Operation Query language commend: SELECT ABBOTT OF EMPLOYEE DISPLAY EMP NAME AND JOB The PROJECT Operation Query language commend: PROJECT EMP NO AND PAY RATE OF PAY-RATE EMP# EMP NAME JOB 11 Smith, A. 4 14 Garcia, B. 2 27 Wong, C. 3 29 Riley,D. 33 O’Hara, E. 1 36 Weiss, F. 41 Abbott, G. 45 Powski, H. PROJECT EMP# HIRE DATA PAY RATE 11 19X9 10.00 14 19X8 27 29 33 20.00 36 41 45 EMP# PAY RATE 11 10.00 14 27 29 33 20.00 36 41 45 SELECT Display: EMP NAME JOB Abbott,G. 3

Operate Relational Database Using Query Language (DML) Databases and Data Modeling for Accounting Information Systems Operate Relational Database Using Query Language (DML) The JOIN Operation Query language commend: JOIN EMPLOYEE WITH JOB/DEPT DISPLAY DEPT AND NAME JOIN EMP# EMP NAME JOB 11 Smith, A. 4 14 Garcia, B. 2 27 Wong, C. 3 29 Riley,D. 33 O’Hara, E. 1 36 Weiss, F. 41 Abbott, G. 45 Powski, H. JOB DEPT 1 2 3 4 EMP# EMP NAME JOB DEPT 11 Smith, A. 4 2 14 Garcia, B. 27 Wong, C. 3 1 29 Riley,D. 33 O’Hara, E. 36 Weiss, F. 41 Abbott, G. 45 Powski, H.

Online Analytical Processing Databases and Data Modeling for Accounting Information Systems Online Analytical Processing Complex multidimensional data analysis performed on database information is called online analytical processing (OLAP). OLAP packages allow end users to perform their own database analysis, including data mining.

Object-Oriented and Multimedia Databases Databases and Data Modeling for Accounting Information Systems Object-Oriented and Multimedia Databases * The object-oriented database (OODB) is a type of database that contains both the text data of traditional databases, plus information about the set of actions that can be taken on the data fields. * Most OODBs are multimedia databases that can include graphics, audio information and animation.

Characteristics of a Data Warehouse Databases and Data Modeling for Accounting Information Systems Characteristics of a Data Warehouse A data warehouse pools data from separate applications into a large common body of information. Characteristics of data warehouses Data are “clean” of errors and defined uniformly. Data are stored in several databases, not just one. Data Warehouses span a longer time horizon than the company’s transaction systems. The data relations are optimized for answering complex questions.

Advantages of Data Warehouse Databases and Data Modeling for Accounting Information Systems Advantages of Data Warehouse * Data are “clean” of errors and defined uniformly. * Data are stored in several databases, not just one. * Data Warehouses span a longer time horizon than the company’s transaction systems. * The data relations are optimized for answering complex questions. * Make organizational information available on a corporate-wide basis. * Facilitates data mining and enables users to identify target markets or its most desirable customers.

Databases and Data Modeling for Accounting Information Systems PREPEARED BY : EMAN AL AQEEL