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Accounting Information Systems: The Processes and Controls, 2nd Edition

Book Description

This new edition continues to organize key AIS course content (e.g. ERP and relational databases, REA, controls) around four major themes: simplicity of writing and presentation (lower level), business processes, accounting and IT controls, and ethics as it relates to accounting systems. This text offers real-world focus that impacts the chapter exposition, discussion questions, and end-of-chapter exercises and cases. It includes an emphasis on readability that extends beyond the narrative to the flowcharts and illustrations.

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright
  4. About the Authors
  5. Preface
    1. INSTRUCTOR
    2. FEATURES
    3. SUPPLEMENTS
  6. Acknowledgments
  7. Student
  8. A List of Real-World Examples in This Textbook
  9. Brief Contents
  10. Contents
  11. MODULE 1: INTRODUCTION
    1. CHAPTER 1: Introduction to AIS
      1. OVERVIEW OF BUSINESS PROCESSES (STUDY OBJECTIVE 1)
      2. OVERVIEW OF AN ACCOUNTING INFORMATION SYSTEM (STUDY OBJECTIVE 2)
      3. BUSINESS PROCESS LINKAGE THROUGHOUT THE SUPPLY CHAIN (STUDY OBJECTIVE 3)
      4. IT ENABLEMENT OF BUSINESS PROCESSES (STUDY OBJECTIVE 4)
      5. BASIC COMPUTER AND IT CONCEPTS (STUDY OBJECTIVE 5)
      6. EXAMPLES OF IT ENABLEMENT (STUDY OBJECTIVE 6)
      7. THE INTERNAL CONTROL STRUCTURE OF ORGANIZATIONS (STUDY OBJECTIVE 7)
      8. THE IMPORTANCE OF ACCOUNTING INFORMATION SYSTEMS TO ACCOUNTANTS (STUDY OBJECTIVE 8)
      9. THE RELATION OF ETHICS TO ACCOUNTING INFORMATION SYSTEMS (STUDY OBJECTIVE 9)
      10. SUMMARY OF STUDY OBJECTIVES
      11. KEY TERMS
      12. END OF CHAPTER MATERIAL
    2. CHAPTER 2: Foundational Concepts of the AIS
      1. INTERRELATIONSHIPS OF BUSINESS PROCESSES AND THE AIS (STUDY OBJECTIVE 1)
      2. TYPES OF ACCOUNTING INFORMATION SYSTEMS (STUDY OBJECTIVE 2)
      3. CLIENT-SERVER COMPUTING (STUDY OBJECTIVE 3)
      4. CLOUD COMPUTING (LEARNING OBJECTIVE 4)
      5. ACCOUNTING SOFTWARE MARKET SEGMENTS (STUDY OBJECTIVE 5)
      6. INPUT METHODS USED IN BUSINESS PROCESSES (STUDY OBJECTIVE 6)
      7. PROCESSING ACCOUNTING DATA (STUDY OBJECTIVE 7)
      8. OUTPUTS FROM THE AIS RELATED TO BUSINESS PROCESSES (STUDY OBJECTIVE 8)
      9. DOCUMENTING PROCESSES AND SYSTEMS (STUDY OBJECTIVE 9)
      10. ETHICAL CONSIDERATIONS AT THE FOUNDATION OF ACCOUNTING INFORMATION SYSTEMS (STUDY OBJECTIVE 10)
      11. SUMMARY OF STUDY OBJECTIVES
      12. KEY TERMS
      13. APPENDIX: RESOURCES EVENTS AGENTS (REA) IN ACCOUNTING INFORMATION SYSTEMS
      14. END OF CHAPTER MATERIAL
  12. MODULE 2: CONTROL ENVIRONMENT
    1. CHAPTER 3: Fraud, Ethics, and Internal Control
      1. INTRODUCTION TO THE NEED FOR A CODE OF ETHICS AND INTERNAL CONTROLS (STUDY OBJECTIVE 1)
      2. ACCOUNTING-RELATED FRAUD (STUDY OBJECTIVE 2)
      3. THE NATURE OF MANAGEMENT FRAUD (STUDY OBJECTIVE 3)
      4. THE NATURE OF EMPLOYEE FRAUD (STUDY OBJECTIVE 4)
      5. THE NATURE OF CUSTOMER FRAUD (STUDY OBJECTIVE 5)
      6. THE NATURE OF VENDOR FRAUD (STUDY OBJECTIVE 6)
      7. THE NATURE OF COMPUTER FRAUD (STUDY OBJECTIVE 7)
      8. POLICIES TO ASSIST IN THE AVOIDANCE OF FRAUD AND ERRORS (STUDY OBJECTIVE 8)
      9. MAINTENANCE OF A CODE OF ETHICS (STUDY OBJECTIVE 9)
      10. MAINTENANCE OF ACCOUNTING INTERNAL CONTROLS (STUDY OBJECTIVE 10)
      11. MAINTENANCE OF INFORMATION TECHNOLOGY CONTROLS (STUDY OBJECTIVE 11)
      12. SUMMARY OF STUDY OBJECTIVES
      13. KEY TERMS
      14. APPENDIX A: RECENT HISTORY OF INTERNAL CONTROL STANDARDS
      15. APPENDIX B: CONTROL OBJECTIVES FOR INFORMATION TECHNOLOGY (COBIT)
      16. END OF CHAPTER MATERIAL
    2. CHAPTER 4: Internal Controls and Risks in IT Systems
      1. AN OVERVIEW OF INTERNAL CONTROLS FOR IT SYSTEMS (STUDY OBJECTIVE 1)
      2. GENERAL CONTROLS FOR IT SYSTEMS (STUDY OBJECTIVE 2)
      3. GENERAL CONTROLS FROM AN AICPA TRUST SERVICES PRINCIPLES PERSPECTIVE (STUDY OBJECTIVE 3)
      4. HARDWARE AND SOFTWARE EXPOSURES IN IT SYSTEMS (STUDY OBJECTIVE 4)
      5. APPLICATION SOFTWARE AND APPLICATION CONTROLS (STUDY OBJECTIVE 5)
      6. ETHICAL ISSUES IN IT SYSTEMS (STUDY OBJECTIVE 6)
      7. SUMMARY OF STUDY OBJECTIVES
      8. KEY TERMS
      9. END OF CHAPTER MATERIAL
    3. CHAPTER 5: Corporate Governance and the Sarbanes-Oxley Act
      1. AN OVERVIEW OF CORPORATE GOVERNANCE (STUDY OBJECTIVE 1)
      2. PARTICIPANTS IN THE CORPORATE GOVERNANCE PROCESS (STUDY OBJECTIVE 2)
      3. FUNCTIONS WITHIN THE CORPORATE GOVERNANCE PROCESS (STUDY OBJECTIVE 3)
      4. THE HISTORY OF CORPORATE GOVERNANCE (STUDY OBJECTIVE 4)
      5. THE SARBANES–OXLEY ACT OF 2002 (STUDY OBJECTIVE 5)
      6. THE IMPACT OF THE SARBANES–OXLEY ACT ON CORPORATE GOVERNANCE (STUDY OBJECTIVE 6)
      7. THE IMPORTANCE OF CORPORATE GOVERNANCE IN THE STUDY OF ACCOUNTING INFORMATION SYSTEMS (STUDY OBJECTIVE 7)
      8. ETHICS AND CORPORATE GOVERNANCE (STUDY OBJECTIVE 8)
      9. SUMMARY OF STUDY OBJECTIVES
      10. KEY TERMS
      11. END OF CHAPTER MATERIAL
    4. CHAPTER 6: IT Governance
      1. INTRODUCTION TO IT GOVERNANCE (STUDY OBJECTIVE 1)
      2. AN OVERVIEW OF THE SDLC (STUDY OBJECTIVE 2)
      3. ELEMENTS OF THE SYSTEMS PLANNING PHASE OF THE SDLC (STUDY OBJECTIVE 3)
      4. ELEMENTS OF THE SYSTEMS ANALYSIS PHASE OF THE SDLC (STUDY OBJECTIVE 4)
      5. ELEMENTS OF THE SYSTEMS DESIGN PHASE OF THE SDLC (STUDY OBJECTIVE 5)
      6. ELEMENTS OF THE SYSTEMS IMPLEMENTATION PHASE OF THE SDLC (STUDY OBJECTIVE 6)
      7. ELEMENTS OF THE OPERATION AND MAINTENANCE PHASE OF THE SDLC (STUDY OBJECTIVE 7)
      8. THE CRITICAL IMPORTANCE OF IT GOVERNANCE IN AN ORGANIZATION (STUDY OBJECTIVE 8)
      9. ETHICAL CONSIDERATIONS RELATED TO IT GOVERNANCE (STUDY OBJECTIVE 9)
      10. SUMMARY OF STUDY OBJECTIVES
      11. KEY TERMS
      12. END OF CHAPTER MATERIAL
    5. CHAPTER 7: Auditing Information Technology–Based Processes
      1. INTRODUCTION TO AUDITING IT PROCESSES (STUDY OBJECTIVE 1)
      2. TYPES OF AUDITS AND AUDITORS (STUDY OBJECTIVE 2)
      3. INFORMATION RISK AND IT-ENHANCED INTERNAL CONTROL (STUDY OBJECTIVE 3)
      4. AUTHORITATIVE LITERATURE USED IN AUDITING (STUDY OBJECTIVE 4)
      5. MANAGEMENT ASSERTIONS AND AUDIT OBJECTIVES (STUDY OBJECTIVE 5)
      6. PHASES OF AN IT AUDIT (STUDY OBJECTIVE 6)
      7. USE OF COMPUTERS IN AUDITS (STUDY OBJECTIVE 7)
      8. TESTS OF CONTROLS (STUDY OBJECTIVE 8)
      9. TESTS OF TRANSACTIONS AND TESTS OF BALANCES (STUDY OBJECTIVE 9)
      10. AUDIT COMPLETION/REPORTING (STUDY OBJECTIVE 10)
      11. OTHER AUDIT CONSIDERATIONS (STUDY OBJECTIVE 11)
      12. ETHICAL ISSUES RELATED TO AUDITING (STUDY OBJECTIVE 12)
      13. SUMMARY OF STUDY OBJECTIVES
      14. KEY TERMS
      15. END OF CHAPTER MATERIAL
  13. MODULE 3: BUSINESS PROCESSES
    1. CHAPTER 8: Revenue and Cash Collection Processes and Controls
      1. INTRODUCTION TO REVENUE PROCESSES (STUDY OBJECTIVE 1)
      2. SALES PROCESSES (STUDY OBJECTIVE 2)
      3. RISKS AND CONTROLS IN SALES PROCESSES (STUDY OBJECTIVE 2, continued)
      4. SALES RETURN PROCESSES (STUDY OBJECTIVE 3)
      5. RISKS AND CONTROLS IN THE SALES RETURN PROCESSES (STUDY OBJECTIVE 3, continued)
      6. CASH COLLECTION PROCESSES (STUDY OBJECTIVE 4)
      7. RISKS AND CONTROLS IN THE CASH COLLECTION PROCESSES (STUDY OBJECTIVE 4, continued)
      8. IT-ENABLED SYSTEMS OF REVENUE AND CASH COLLECTION PROCESSES (STUDY OBJECTIVE 5)
      9. E-BUSINESS SYSTEMS AND THE RELATED RISKS AND CONTROLS (STUDY OBJECTIVE 6)
      10. ELECTRONIC DATA INTERCHANGE (EDI) SYSTEMS AND THE RISKS AND CONTROLS (STUDY OBJECTIVE 7)
      11. POINT OF SALE (POS) SYSTEMS AND THE RELATED RISKS AND CONTROLS (STUDY OBJECTIVE 8)
      12. ETHICAL ISSUES RELATED TO REVENUE PROCESSES (STUDY OBJECTIVE 9)
      13. CORPORATE GOVERNANCE IN REVENUE PROCESSES (STUDY OBJECTIVE 10)
      14. SUMMARY OF STUDY OBJECTIVES
      15. KEY TERMS
      16. END OF CHAPTER MATERIAL
    2. CHAPTER 9: Expenditures Processes and Controls–Purchases
      1. INTRODUCTION TO EXPENDITURES PROCESSES (STUDY OBJECTIVE 1)
      2. PURCHASING PROCESSES (STUDY OBJECTIVE 2)
      3. RISKS AND CONTROLS IN THE PURCHASING PROCESS (STUDY OBJECTIVE 2, continued)
      4. PURCHASE RETURN PROCESS (STUDY OBJECTIVE 3)
      5. RISKS AND CONTROLS IN THE PURCHASE RETURN PROCESSES (STUDY OBJECTIVE 3, continued)
      6. CASH DISBURSEMENT PROCESSES (STUDY OBJECTIVE 4)
      7. RISKS AND CONTROLS IN THE CASH DISBURSEMENT PROCESSES (STUDY OBJECTIVE 4, continued)
      8. IT SYSTEMS OF EXPENDITURES AND CASH DISBURSEMENT PROCESSES (STUDY OBJECTIVE 5)
      9. COMPUTER-BASED MATCHING (STUDY OBJECTIVE 6)
      10. RISKS AND CONTROLS IN COMPUTER-BASED MATCHING (STUDY OBJECTIVE 6, continued)
      11. EVALUATED RECEIPT SETTLEMENT (STUDY OBJECTIVE 7)
      12. RISKS AND CONTROLS IN EVALUATED RECEIPT SETTLEMENT (STUDY OBJECTIVE 7, continued)
      13. E-BUSINESS AND ELECTRONIC DATA INTERCHANGE (EDI) (STUDY OBJECTIVE 8)
      14. RISKS AND CONTROLS IN E-BUSINESS AND EDI (STUDY OBJECTIVE 8, continued)
      15. E-PAYABLES (STUDY OBJECTIVE 9)
      16. PROCUREMENT CARDS (STUDY OBJECTIVE 10)
      17. ETHICAL ISSUES RELATED TO EXPENDITURES PROCESSES (STUDY OBJECTIVE 11)
      18. CORPORATE GOVERNANCE IN EXPENDITURE PROCESSES (STUDY OBJECTIVE 12)
      19. SUMMARY OF STUDY OBJECTIVES
      20. END OF CHAPTER MATERIAL
    3. CHAPTER 10: Expenditures Processes and Controls—Payroll and Fixed Assets
      1. INTRODUCTION TO PAYROLL AND FIXED ASSET PROCESSES (STUDY OBJECTIVE 1)
      2. PAYROLL PROCESSES (STUDY OBJECTIVE 2)
      3. RISKS AND CONTROLS IN THE PAYROLL PROCESSES (STUDY OBJECTIVE 3)
      4. IT SYSTEMS OF PAYROLL PROCESSES (STUDY OBJECTIVE 4)
      5. FIXED ASSETS PROCESSES (STUDY OBJECTIVE 5)
      6. RISKS AND CONTROLS IN FIXED ASSETS PROCESSES (STUDY OBJECTIVE 6)
      7. IT SYSTEMS OF FIXED ASSETS PROCESSES (STUDY OBJECTIVE 7)
      8. ETHICAL ISSUES RELATED TO PAYROLL AND FIXED ASSETS PROCESSES (STUDY OBJECTIVE 8)
      9. CORPORATE GOVERNANCE IN PAYROLL AND FIXED ASSETS PROCESSES (STUDY OBJECTIVE 9)
      10. SUMMARY OF STUDY OBJECTIVES
      11. KEY TERMS
      12. END OF CHAPTER MATERIAL
    4. CHAPTER 11: Conversion Processes and Controls
      1. BASIC FEATURES OF CONVERSION PROCESSES (STUDY OBJECTIVE 1)
      2. COMPONENTS OF THE LOGISTICS FUNCTION (STUDY OBJECTIVE 2)
      3. COST ACCOUNTING REPORTS GENERATED BY CONVERSION PROCESSES (STUDY OBJECTIVE 3)
      4. RISKS AND CONTROLS IN CONVERSION PROCESSES (STUDY OBJECTIVE 4)
      5. IT SYSTEMS OF CONVERSION PROCESSES (STUDY OBJECTIVE 5)
      6. ETHICAL ISSUES RELATED TO CONVERSION PROCESSES (STUDY OBJECTIVE 6)
      7. CORPORATE GOVERNANCE IN CONVERSION PROCESSES (STUDY OBJECTIVE 7)
      8. SUMMARY OF STUDY OBJECTIVES
      9. KEY TERMS
      10. END OF CHAPTER MATERIAL
    5. CHAPTER 12: Administrative Processes and Controls
      1. INTRODUCTION TO ADMINISTRATIVE PROCESSES (STUDY OBJECTIVE 1)
      2. SOURCE OF CAPITAL PROCESSES (STUDY OBJECTIVE 2)
      3. INVESTMENT PROCESSES (STUDY OBJECTIVE 3)
      4. RISKS AND CONTROLS IN CAPITAL AND INVESTMENT PROCESSES (STUDY OBJECTIVE 4)
      5. GENERAL LEDGER PROCESSES (STUDY OBJECTIVE 5)
      6. RISKS AND CONTROLS IN GENERAL LEDGER PROCESSES (STUDY OBJECTIVE 6)
      7. REPORTING AS AN OUTPUT OF THE GENERAL LEDGER PROCESSES (STUDY OBJECTIVE 7)
      8. ETHICAL ISSUES RELATED TO ADMINISTRATIVE PROCESSES AND REPORTING (STUDY OBJECTIVE 7)
      9. CORPORATE GOVERNANCE IN ADMINISTRATIVE PROCESSES AND REPORTING (STUDY OBJECTIVE 8)
      10. SUMMARY OF STUDY OBJECTIVES
      11. KEY TERMS
      12. END OF CHAPTER MATERIAL
  14. MODULE 4: IT INFRASTRUCTURE TO ENABLE PROCESSES
    1. CHAPTER 13: Data and Databases
      1. THE NEED FOR DATA COLLECTION AND STORAGE (STUDY OBJECTIVE 1)
      2. STORING AND ACCESSING DATA (STUDY OBJECTIVE 2)
      3. DATA PROCESSING TECHNIQUES (STUDY OBJECTIVE 3)
      4. DATABASES (STUDY OBJECTIVE 4)
      5. THE NEED FOR NORMALIZED DATA (STUDY OBJECTIVE 5)
      6. USE OF A DATA WAREHOUSE TO ANALYZE DATA (STUDY OBJECTIVE 6)
      7. DATA ANALYSIS TOOLS (STUDY OBJECTIVE 7)
      8. DISTRIBUTED DATA PROCESSING (STUDY OBJECTIVE 8)
      9. CLOUD-BASED DATABASES (STUDY OBJECTIVE 9)
      10. IT CONTROLS FOR DATA AND DATABASES (STUDY OBJECTIVE 10)
      11. ETHICAL ISSUES RELATED TO DATA COLLECTION AND STORAGE (STUDY OBJECTIVE 11)
      12. SUMMARY OF STUDY OBJECTIVES
      13. END OF CHAPTER MATERIAL
    2. CHAPTER 14: E-Commerce and E-Business
      1. INTRODUCTION TO E-COMMERCE AND E-BUSINESS (STUDY OBJECTIVE 1)
      2. THE HISTORY OF THE INTERNET (STUDY OBJECTIVE 2)
      3. THE PHYSICAL STRUCTURE AND STANDARDS OF THE INTERNET (STUDY OBJECTIVE 3)
      4. E-COMMERCE AND ITS BENEFITS (STUDY OBJECTIVE 4)
      5. PRIVACY EXPECTATIONS IN E-COMMERCE (STUDY OBJECTIVE 5)
      6. E-BUSINESS AND IT ENABLEMENT (STUDY OBJECTIVE 6)
      7. E-BUSINESS ENABLEMENT EXAMPLES (STUDY OBJECTIVE 7)
      8. INTRANETS AND EXTRANETS TO ENABLE E-BUSINESS (STUDY OBJECTIVE 8)
      9. INTERNAL CONTROLS FOR THE INTERNET, INTRANETS, AND EXTRANETS (STUDY OBJECTIVE 9)
      10. XML AND XBRL AS TOOLS TO ENABLE E-BUSINESS (STUDY OBJECTIVE 10)
      11. ETHICAL ISSUES RELATED TO E-BUSINESS AND E-COMMERCE (STUDY OBJECTIVE 11)
      12. SUMMARY OF STUDY OBJECTIVES
      13. KEY TERMS
      14. END OF CHAPTER MATERIAL
    3. CHAPTER 15: IT Infrastructure for E-Business
      1. OVERVIEW OF ERP SYSTEMS (STUDY OBJECTIVE 1)
      2. HISTORY OF ERP SYSTEMS (STUDY OBJECTIVE 2)
      3. CURRENT ERP SYSTEM CHARACTERISTICS (STUDY OBJECTIVE 3)
      4. ERP MODULES (STUDY OBJECTIVE 4)
      5. CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
      6. MARKET SEGMENTS OF ERP SYSTEMS (STUDY OBJECTIVE 5)
      7. IMPLEMENTATION OF ERP SYSTEMS (STUDY OBJECTIVE 6)
      8. BENEFITS AND RISKS OF ERP SYSTEMS (STUDY OBJECTIVE 7)
      9. ERP SYSTEMS AND THE SARBANES–OXLEY ACT (STUDY OBJECTIVE 8)
      10. SUMMARY OF STUDY OBJECTIVES
      11. KEY TERMS
      12. END OF CHAPTER MATERIAL
      13. SOLUTIONS TO CONCEPT CHECK
  15. Index