Transcript REA The Accounting Model as an Information Engineering

Slides 5
The Accounting REA Model
as an Information Engineering
Interaction Model
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Review of Modeling
• A model is a representation of reality
• Systems analysts seek to understand an
organization by building a representation of the
business and its workings, called a business
model (also conceptual or logical model)
• An IE business model includes three primary
types of models: (1) data models, (2) activity
models, and (3) interaction models
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Analysis Tasks with REA Interaction Modeling
AHD, ADD
Activity
Analysis
REA
Preliminary
Interaction
Analysis 1
ERD
PLD, ELC
Data Analysis
Formal
Interaction
Analysis 2
Systems
Design
Planning
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Types of Models
• Activity models: Record the activities of
interest to the business (i.e., the things the
business does or should do).
• Involves decomposition of business processes
from the highest level (AMP of Resources,
Conversion Processes, MSC Processes) to the
lowest (elementary processes) - template
• Also involves the specification of process
dependency events, to refine decomposition
of the processes.
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Activity Models: Template for Decomposition of
Business Processes (IPSO) - REPEAT
Suppliers
Request
input
resources
Customers
Pay for input
resources
Supply goods
and services
Receive
payment
HEART OF ORGANIZATION
AMP
Processes
Input
Resources to
the
Organization
Source: Hollander, Denna &
Cherrington (2000), adapted
Conversio
n
Processes
Finished
Goods and
Services to
Adds value Customers
RBMS
MSC
Processes
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Business Processes
AMP Processes
Human Resources
Financial Resources
Supplies
Inventories
Property, Plant and
Equipment
Conversion
Processes
Operations
Varies widely
depending upon
the industry
MSC
Processes
Marketing
Sales
Collection and Credit
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Activity Model: Business Function Decomposition
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Types of Models
• Interaction models: Define how things the
business does (activities/events) affect things
of interest to the business (data)
• The REA model is an interaction model
• We have combined the IE notation of an
interaction model with the accounting REA(L)
model
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REAL Model of A Business Event:
The Event and Surrounding RALs
Internal
Agent
Location
Event
Resource
Source: Hollander,
Denna & Cherrington,
1996
•
•
•
•
What happened?
When did it happen?
Who was involved?
What resources were
involved?
• Where did it occur?
External
Agent
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• REAL modeling is an aid in analyzing an
organization and its activities (helps
develop activity models by identifying
lowest level of decomposition)
• Helps decide what data to collect (helps
develop data models)
• Enhances your ability to evaluate business
processes and identify processes and
events that are not valuable, not
competitive, and/or not meeting the
objectives of the organization
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Process and Events
Take customer
order
Ship goods
Business Process: Simple MS
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REA Template With Two Events
Location
Resource
Event 1:
Take
customer
order
External
Agent
Internal
Agent
Location
Resource
Internal
Agent
Event 2:
Ship
goods
External
Agent
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Validate The REAL Model With Business Persons
• Those who understand the details and objectives of
the business process and events being modeled
should perform the validation.
• Validation sessions should result in either the
confirmation of the model’s accuracy or modification
of the model.
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Relationships
• Data modeling term that indicates an
association between tables: How the things of
significance are related (A FK must match to
an existing PK, or else be NULL)
• This controlled redundancy allows linking
of tables (hence “relational”)
• Entity-Relationship Diagram (ERD): A
data model (at the conceptual level) that
shows the relationships enforcing business
rules between entities (tables) in a database
environment
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Connectivity or Cardinality
One-to-One (PK ---> PK) - Generally
indicates that your data model has two entity
types that can be collapsed into one
• One-to-Many (PK ---> FK) - Most common
• Many-to-Many (FK ---> FK) - Not
enforceable by RDMS; generally indicates
that a modeling error has occurred - this
type of relationship means that your model is
missing an entity type
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Cardinality of Relationships
• Mandatory - an instance of an entity in one
table does require a associated record in
another table (as defined by a relationship)
• Optional - an instance of an entity in one table
does not require a associated record in a
another table (as defined by a relationship)
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Different Notations to Represent Relationships
Cardinalities (could even be on opposite sides of the
connecting line – a mirror image) - handout
(1,1)
(1,N)
(0,1)
(0,N)
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Events
Most events are easy to identify because the business
records data on forms or files.
• Events are characterized by the fact that they happen
or have duration
– For activity and REAL models, they are characterized by at
least a verb and a noun, but could have an adjective, take
customer order, deliver customer order, pay supplier
– For data models (converting REAL to ERD), they are
characterized by a noun, e.g., Order header, Order detail,
Sales header, Sales detail, Cash receipt
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A REAL Interaction Model for MSC Function
Note: Use of verb/noun
Salesperson
Department
Sell Goods
Customer
Inventory
Store
Cash
Receive
Payment
Cashier
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Surrounding RALs
AGENTS
• Entity types that describe roles played in a
system. They usually represent people or
organizations.
• APPLICANT, BORROWER, CLIENT, CREDITOR,
EMPLOYEE, EMPLOYER, INSTRUCTOR,
MANAGER, SALESPERSON, VENDOR
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Surrounding RALS
RESOURCES
• Entity types that describe tangible things.
• EQUIPMENT, INVENTORY, CASH, MACHINE,
MATERIAL, PART, PRODUCT, VEHICLE, but
they can also be Informational Resources,
e.g., PRODUCT CATALOG
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Surrounding RALs
LOCATIONS
• Entity types that describe locations
• BRANCH, BUILDING, CAMPUS, CITY,
COUNTRY, COUNTY, SALES REGION,
WAREHOUSE, STORE, FRANCHISEE
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Data model: ERD with Normalization
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