Accounting Information Systems

by Bodnar, George H.; Hopwood, William S.

• ISBN13: 9780130861771
• ISBN10: 0130861774
• Edition: 8th
• Format: Hardcover
• Copyright: 2001-01-01
• Publisher: Pearson College Div

Summary

This interesting, extremely useful book stresses information, communication, and networking technology within the realm of business processes and internal control structure. Its brief yet comprehensive coverage has been updated to include all of the latest AIS topics, such as: electronic commerce, electronic security, web commerce, internet security, network security, statistical sampling and artificial intelligence, EDI, databases, and encryption. The new focus on Enterprise Resource Planning (ERP) allows for more precise planning, forecasting, and monitoring. Advances in Business Engineering and Blueprinting and new discussions on SAP are also highlighted. For those involved in the planning, set-up, implementation, and monitoring of accounting information systems.

Table of Contents

Preface	xv
PART I: INTRODUCTION TO ACCOUNTING INFORMATION SYSTEMS	1	(279)
Accounting Information Systems: An Overview	1	(33)
Learning Objectives	1	(1)
Accounting Information Systems and Business Organizations	1	(5)
Information and Decisions	2	(2)
Information Systems	4	(2)
Business Processes	6	(1)
Transaction Processing Cycles	7	(4)
Internal Control Process	8	(3)
Accounting and Information Technology	11	(8)
The Information System Function	11	(3)
End-User Computing	14	(2)
Quick-Response Technology	16	(3)
The Accountant and Systems Development	19	(3)
The Nature of Systems Development	20	(1)
Business Process Blueprinting	21	(1)
Behavioral Considerations in Systems Development	22	(1)
Summary	22	(1)
Glossary	23	(1)
Chapter Quiz	24	(1)
Review Questions	25	(1)
Discussion Questions and Problems	26	(7)
Answers to Chapter Quiz	33	(1)
Systems Techniques and Documentation	34	(43)
Learning Objectives	34	(1)
Users of Systems Techniques	34	(3)
Use of Systems Techniques in Auditing	34	(2)
Use of Systems Techniques in Systems Development	36	(1)
Systems Techniques	37	(22)
Flowcharting Symbols	37	(3)
Symbol Use in Flowcharting	40	(2)
IPO and HIPO Charts	42	(1)
Systems and Program Flowcharts	43	(1)
Logical Data Flow Diagrams	43	(1)
Logical Data Flow Diagrams and Structured Analysis	44	(2)
Analytic, Document, and Forms Distribution Flowcharts	46	(3)
Analytic Flowcharting Illustration	49	(5)
Narrative Techniques	54	(1)
Resource Utilization Analysis	55	(2)
Decision Analysis Techniques	57	(2)
Summary	59	(2)
Glossary	61	(1)
Chapter Quiz	61	(2)
Review Problem	63	(1)
Review Questions	64	(1)
Discussion Questions and Problems	64	(12)
Answers to Chapter Quiz	76	(1)
The Internet, Intranets, and Electronic Commerce	77	(58)
Learning Objectives	77	(1)
Electronic Commerce	77	(8)
Electronic Networks	77	(4)
Commerce on the Internet	81	(4)
Security for Electronic Transactions	85	(7)
Introduction	85	(1)
Types of Encryption Systems	86	(6)
Security Issues for Public-Key Encryption Systems	92	(4)
Cryptanalysis Attacks	92	(1)
Factoring Attacks	92	(1)
Key Management	93	(3)
Applications of Electronic Commerce and Encryption Technology	96	(7)
Virtual Cash Systems	96	(1)
Privacy Issues	97	(2)
Computer Software and Computer Card Systems	99	(1)
The Internet Store	100	(1)
Virtual Private Networks	101	(1)
Trust in E-Commerce: Privacy, Business Practices, and Transaction Integrity	102	(1)
Summary	103	(1)
Glossary	104	(2)
Chapter Quiz	106	(1)
Review Questions	107	(1)
Discussion Questions and Problems	107	(6)
Discussion Questions and Problems From the Appendix	113	(3)
Answers to Chapter Quiz	116	(1)
Appendix: An Introduction to Computer Technology	116	(16)
Appendix Glossary	132	(3)
Introduction to Transaction Processing	135	(42)
Learning Objectives	135	(1)
Transaction Flows: An Overview	135	(4)
Transaction Flows in a Manufacturing Firm	136	(2)
Transaction Flows and Business Processes	138	(1)
Components of the Transaction Processing System	139	(2)
Inputs	139	(1)
Processing	139	(1)
Storage	140	(1)
Outputs	141	(1)
Designing Double-Entry Systems	141	(10)
A Systems Approach	141	(2)
Standard Journal Entries	143	(2)
Modes of Transaction Processing	145	(3)
Need for a Chart of Accounts	148	(1)
Designing a Chart of Accounts	149	(2)
Documentation	151	(1)
Coding Systems for Transaction Processing	151	(5)
Types of Codes	151	(2)
Considerations in Designing Codes	153	(1)
Coding Examples in Accounting Systems	154	(2)
Form Design and Records Retention Considerations	156	(2)
Form Design Considerations	156	(1)
Records Retention Considerations	157	(1)
Electronic Tax-Record Retention Requirements	158	(1)
Comprehensive Example---Great Plains Dynamics	158	(5)
General Ledger Setup	158	(1)
Account Categories	159	(1)
Chart of Accounts	159	(1)
Quick Journal Setup	160	(1)
Budget Setup	160	(1)
Setup Beginning Balances	160	(1)
Daily Procedures	161	(1)
Period-End Procedures	161	(1)
Financial Statements	162	(1)
Quick Statements	162	(1)
Advanced Financial Report Layout	162	(1)
Summary	163	(1)
Glossary	163	(1)
Chapter Quiz	164	(1)
Review Problem	165	(1)
Solution to Review Problem	166	(1)
Review Questions	167	(1)
Discussion Questions and Problems	168	(8)
Answers to Chapter Quiz	176	(1)
Transaction Processing and the Internal Control Process	177	(59)
Learning Objectives	177	(1)
The Necessity for Controls	177	(5)
Controls and Exposures	177	(1)
Common Exposures	178	(1)
Fraud and White-Collar Crime	179	(2)
Computer Processing and Exposures	181	(1)
Control Objectives and Transaction Cycles	182	(1)
Components of the Internal Control Process	182	(16)
External Influences Concerning an Entity and Internal Control	184	(1)
The Impact of the Business Environment on Internal Control	185	(1)
Control Environment	185	(7)
Risk Assessment	192	(1)
Control Activities	192	(3)
Information and Communication	195	(2)
Monitoring	197	(1)
Transaction Processing Controls	198	(11)
General Controls	198	(3)
Application Controls	201	(4)
Preventive, Detective, and Corrective Controls	205	(2)
Communicating the Objectives of Internal Control	207	(1)
Goals and Behavior Patterns	207	(2)
Analysis of Internal Control Processes	209	(4)
Analytical Techniques	209	(3)
Illustration of an Internal Control Analysis	212	(1)
Summary	213	(1)
Glossary	214	(1)
Chapter Quiz	215	(1)
Review Problem	216	(1)
Solution to Review Problem	217	(1)
Review Questions	217	(1)
Discussion Questions and Problems	218	(17)
Answers to Chapter Quiz	235	(1)
Information Systems Security	236	(44)
Learning Objectives	236	(1)
An Overview of Information Systems Security	236	(2)
The Information Security System Life Cycle	236	(1)
The Information Security in the Organization	237	(1)
Analyzing Vulnerabilities and Threats	237	(1)
Vulnerabilities and Threats	238	(9)
The Seriousness of Information Systems Fraud	239	(1)
Individuals Posing a Threat to Information Systems	240	(3)
Active Threats to Information Systems	243	(4)
The Information Systems Security System	247	(11)
The Control Environment	247	(3)
Controls for Active Threats	250	(5)
Controls for Passive Threats	255	(1)
Internet Security	256	(2)
Disaster Risk Management	258	(3)
Preventing Disasters	259	(1)
Contingency Planning for Disasters	259	(2)
Summary	261	(1)
Glossary	262	(1)
Chapter Quiz	263	(1)
Review Problem	264	(1)
Solution to Review Problem	265	(1)
Review Questions	265	(1)
Discussion Questions and Problems	266	(13)
Answers to Chapter Quiz	279	(1)
PART II: BUSINESS PROCESSES	280	(168)
Customer Order and Account Management Business Processes	280	(43)
Learning Objectives	280	(1)
Customer Order Management Business Process	280	(10)
Overview	280	(4)
ERP Illustration: SAP R/3	284	(4)
Standard Order Processing in SAP R/3	288	(2)
Transaction Cycle Controls in Order Processing	290	(5)
Order Entry	290	(2)
Credit	292	(1)
Finished Goods	293	(1)
Shipping	294	(1)
Billing	294	(1)
Accounts Receivable and General Ledger	295	(1)
Customer Account Management Business Process	295	(4)
Accounts Receivable	295	(1)
Transactions Controls in the Accounts Receivable Business Process	296	(1)
Sales Returns and Allowances	297	(1)
Write-off of Accounts Receivable	298	(1)
Cash-Received-on-Account Business Process	299	(7)
Overview	299	(5)
Lock-Box Collection Systems	304	(1)
Cash Sales Business Process	305	(1)
Summary	306	(1)
Glossary	306	(1)
Chapter Quiz	307	(1)
Review Problem	308	(1)
Solution to Review Problem	308	(1)
Review Questions	309	(1)
Discussion Questions and Problems	310	(12)
Answer Lists	322	(1)
Answers to Chapter Quiz	322	(1)
Procurement and Human Resource Business Processes	323	(47)
Learning Objectives	323	(1)
The Procurement Business Process	323	(6)
Overview	323	(2)
Requirement Determination	325	(1)
Selection of Source(s)	325	(1)
Request for Quotation	325	(1)
Selection of a Vendor	326	(1)
Issuing of a Purchase Order	326	(1)
Receipt of the Goods	327	(1)
Invoice Verification	328	(1)
Vendor Payment	328	(1)
Master Records	328	(1)
Transaction Cycle Controls over Procurement	329	(6)
Requisitioning (Stores)	331	(2)
Purchasing	333	(1)
Receiving	333	(1)
Stores	334	(1)
Accounts Payable	334	(1)
Integrity of the Procurement Business Process	334	(1)
The Attribute-Rating Approach to Vendor Selection	335	(1)
Cash Disbursements Business Process	335	(4)
Accounts Payable	336	(1)
Cash Disbursements	336	(1)
General Ledger	336	(1)
Internal Audit	337	(1)
Voucher Systems	337	(1)
Posting of Payables	337	(2)
Human Resource Management Business Process	339	(3)
HR Processing in SAP R/3	339	(1)
HR Data Structure	340	(2)
Transaction Cycle Controls in Payroll Processing	342	(4)
Personnel	342	(1)
Timekeeping	342	(1)
Payroll	342	(4)
Summary	346	(1)
Glossary	347	(1)
Chapter Quiz	347	(1)
Review Problem	348	(1)
Solution to Review Problem	349	(2)
Review Questions	351	(1)
Discussion Questions and Problems	351	(18)
Answers to Chapter Quiz	369	(1)
The Production Business Process	370	(37)
Learning Objectives	370	(1)
Transaction Cycle Controls in the Production Business Process	370	(8)
Production Control	371	(3)
Inventory Control	374	(1)
Just-in-Time (JIT) Production	375	(1)
Property Accounting Applications	376	(2)
Quick-Response Manufacturing Systems	378	(15)
Components of Quick-Response Manufacturing Systems	378	(4)
Transaction Processing in Quick-Response Manufacturing Systems	382	(10)
Special Internal Control Considerations	392	(1)
Summary	393	(1)
Glossary	394	(1)
Chapter Quiz	395	(1)
Review Problem	396	(1)
Solution to Review Problem	396	(1)
Review Questions	397	(1)
Discussion Questions and Problems	397	(9)
Answers to Chapter Quiz	406	(1)
Electronic Data Processing Systems	407	(41)
Learning Objectives	407	(1)
The Input System	407	(7)
Paper-Based Input Systems	407	(4)
Paperless Input Systems	411	(3)
The Processing System	414	(13)
Paper-Based Processing Systems	414	(12)
Paperless Processing Systems	426	(1)
The Output System	427	(1)
Summary	428	(1)
Glossary	429	(1)
Chapter Quiz	429	(2)
Review Problem	431	(1)
Solution to Review Problem	431	(1)
Review Questions	431	(1)
Discussion Questions and Problems	432	(15)
Answers to Chapter Quiz	447	(1)
PART III: SYSTEMS DEVELOPMENT	448	(116)
Systems Development: A Survey	448	(48)
Learning Objectives	448	(1)
The Systems Development Life Cycle	448	(9)
Organizational Context of Systems Development	448	(2)
The Systems Development Life Cycle	450	(1)
Some Conventional Wisdom on the Systems Development Life Cycle	451	(2)
Business Reengineering	453	(4)
Documentation Standards	457	(5)
Overview of Systems Development Documentation	458	(3)
Maintenance of Systems Documentation Standards	461	(1)
Systems Development Technologies and Practices	462	(13)
Analyst/Programmer Productivity Control	462	(1)
Structured Programming	463	(1)
Computer-Aided Software Engineering (CASE)	464	(2)
Prototyping	466	(1)
Object-Oriented Technology	466	(6)
Reengineering	472	(1)
Program Change Control	472	(1)
Database Administration	473	(1)
Auditor Involvement in Systems Development	474	(1)
Usage of Advanced Techniques	474	(1)
Planning and Organizing a Systems Project	475	(8)
Project Selection	475	(1)
The Project Team	475	(2)
Project Breakdown into Tasks and Phases	477	(1)
Time Estimates	478	(3)
Project Accounting	481	(2)
Cost-Overrun Trends	483	(1)
Summary	483	(1)
Glossary	484	(1)
Chapter Quiz	485	(1)
Review Problem	486	(1)
Solution to Review Problem	486	(1)
Review Questions	487	(1)
Dicussion Questions and Problems	488	(7)
Answers to Chapter Quiz	495	(1)
Systems Planning, Analysis, and Design	496	(42)
Learning Objectives	496	(1)
General Overview	496	(1)
Overview of Systems Planning and Analysis	497	(1)
Systems Planning and Feasibility Analysis	498	(2)
Systems Planning and Top Management	498	(1)
Steering Committee	498	(1)
Developing Objectives and System Constraints	499	(1)
Developing a Strategic Systems Plan	499	(1)
Identifying Individual Projects for Priority	499	(1)
Commissioning the Systems Project	500	(1)
The Steps of System Analysis	500	(5)
Survey the Present System	500	(3)
Identify Information Needs	503	(1)
Identify the Systems Requirements	504	(1)
Develop a Systems Analysis Report	504	(1)
Fact-Gathering Techniques	505	(1)
Techniques for Organizing Facts	505	(2)
Structured Systems Analysis	507	(3)
Logical Flow Diagrams versus Flowcharts	507	(1)
Systems Design versus Systems Analysis	508	(1)
The Steps in Structured Systems Analysis	508	(2)
Overview of Systems Design	510	(1)
Steps in Systems Design	511	(4)
Evaluating Design Alternatives	511	(3)
Preparing Design Specifications	514	(1)
Preparing and Submitting Systems Design Specifications	515	(1)
Business Process Blueprinting	515	(1)
General Design Considerations	515	(3)
Output Design	516	(1)
Database Design	517	(1)
Data Processing	517	(1)
Data Input	517	(1)
Controls and Security Measures	517	(1)
Design Techniques	518	(3)
Forms Design	518	(1)
Database Design	518	(1)
Systems Design Packages	519	(1)
Choosing Software and Hardware	519	(2)
Summary	521	(1)
Appendix: System Modeling	522	(4)
Glossary	526	(1)
Chapter Quiz	527	(2)
Review Questions	529	(1)
Discussion Questions and Problems	530	(7)
Answers to Chapter Quiz	537	(1)
Systems Implementation, Operation, and Control	538	(26)
Learning Objectives	538	(1)
Overview	538	(1)
Systems Implementation	539	(5)
Establishing Plans and Controls for Implementation	539	(2)
Executing Implementation Activities	541	(3)
Evaluating the New System	544	(1)
Financial Control Over Information Systems	544	(7)
The Information Systems Budget	544	(1)
The Nature of Information Systems Costs	545	(1)
Acquisition and Insurance Controls	545	(2)
Financial Control Strategies	547	(4)
Control Over Nonfinancial Information Systems Resources	551	(2)
Auditing the Information System	552	(1)
Maintaining and Modifying the System	553	(1)
Summary	553	(1)
Glossary	554	(1)
Chapter Quiz	554	(1)
Review Problem	555	(1)
Solution to Review Problem	555	(1)
Review Questions	556	(1)
Discussion Questions and Problems	557	(6)
Answers to Chapter Quiz	563	(1)
PART IV: SPECIAL TOPICS IN ACCOUNTING INFORMATION SYSTEMS	564	(113)
Management Decision Making and Reports	564	(37)
Learning Objectives	564	(1)
Managers and Decisions	564	(10)
Planning and Control	564	(1)
Decision Making	565	(4)
Useful Information for Planning and Control	569	(1)
Information Properties and the Degree of Usefulness	570	(1)
The Value of Information	570	(2)
Software for Decision Making	572	(2)
Reporting to Management	574	(12)
Types of Reports	574	(6)
Reporting Systems	580	(1)
The Financial and Cost Reporting Systems	581	(1)
Responsibility Accounting Reporting Systems	582	(2)
Profitability Reporting Systems	584	(2)
Summary	586	(1)
Glossary	586	(1)
Chapter Quiz	587	(1)
Review Problem	588	(1)
Solution to Review Problem	589	(1)
Review Questions	590	(1)
Discussion Questions and Problems	591	(9)
Answers to Chapter Quiz	600	(1)
File Processing and Data Management Concepts	601	(47)
Learning Objectives	601	(1)
Introductory Terminology	601	(5)
Fields, Data Items, Attributes, and Elements	601	(1)
Data Occurrences	602	(1)
Fixed- and Variable-Length Records	602	(3)
Record Key and File Sequence	605	(1)
The Evolution of Database Technology	606	(3)
Mainframe Environments	607	(1)
Database Management Systems	607	(1)
On-Line Information Services	608	(1)
Expert Systems	608	(1)
Object-Oriented Programming	608	(1)
Hypertext Systems	608	(1)
Intelligent Database Systems	609	(1)
Database Management Systems and Their Architecture	609	(18)
Conceptual Architecture	610	(2)
Database Architecture at the Logical Level: Logical Data Structures	612	(6)
Database Architecture at the Physical Level	618	(7)
Economic Relations between File Organization Techniques	625	(1)
Physical Architecture, Hardware and Response Time	626	(1)
Database Management Systems and Databases in Practice	627	(7)
What Database Management Systems Do	627	(4)
Nonprogrammable Database Systems	631	(1)
Why Database Management Systems Are Needed	631	(2)
Database Documentation and Administration	633	(1)
Summary	634	(2)
Glossary	636	(1)
Chapter Quiz	637	(1)
Review Problem	638	(1)
Solution to Review Problem	638	(1)
Review Questions	638	(1)
Discussion Questions and Problems	639	(8)
Answers to Chapter Quiz	647	(1)
Auditing Information Technology	648	(29)
Learning Objectives	648	(1)
Information Systems Auditing Concepts	648	(4)
Structure of a Financial Statement Audit	649	(1)
Auditing Around the Computer	650	(1)
Auditing Through the Computer	650	(1)
Auditing with the Computer	651	(1)
Information Systems Auditing Technology	652	(10)
Test Data	652	(2)
Integrated-Test-Facility Approach	654	(2)
Parallel Simulation	656	(1)
Audit Software	656	(3)
Embedded Audit Routines	659	(1)
Extended Records	660	(1)
Snapshot	660	(1)
Tracing	660	(1)
Review of Systems Documentation	661	(1)
Control Flowcharting	662	(1)
Mapping	662	(1)
Types of Information Systems Audits	662	(4)
General Approach to an Information Systems Audit	662	(1)
Information Systems Application Audits	663	(1)
Application Systems Development Audits	664	(1)
Computer Service Center Audits	665	(1)
Summary	666	(1)
Glossary	666	(1)
Chapter Quiz	667	(1)
Review Problem	668	(1)
Solution to Review Problem	668	(1)
Review Questions	669	(1)
Discussion Questions and Problems	669	(7)
Answers to Chapter Quiz	676	(1)
Index	677