What Makes Information Useful? Explain each point
Requirements: Well described and presented
Assignment (1)
Deadline: October 7th 2023 @ 23:59
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Assignment Question(s): (Marks 15)
IMPORTANT NOTE: Answer in your own words, DO NOT COPY from slides, fellow student, or internet source without proper citation.
Assignment Question(s):
Q1 What Makes Information Useful? Explain each point. (2.5 marks)
Q2 What are the Components of an AIS? (2.5 marks)
Q3 What does documentation mean? Describe the two Techniques of Systems Documentation . (2.5 marks)
Q4 Explain Three Advantages of Database Systems. (2.5 marks)
Q5 Explain The three elements of the Fraud Triangle, then provide an example to each one. (2.5 marks)
Q6 What does Social Engineering mean? Then give three examples of its Techniques from the real life. (2.5 marks)
Good Luck
Answers Page.
Accounting Information Systems
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Marshall B. RomneyBrigham Young UniversityPaul John SteinbartArizona State UniversityAccounting Information SystemsThirTeenTh ediTionBoston Columbus Indianapolis New York San Francisco Upper Saddle RiverAmsterdam Cape Town Dubai London Madrid Milan Munich Paris Montréal TorontoDelhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
Editor in Chief: Donna BattistaAcquisitions Editor: Ellen GearyEditorial Assistant: Christine DonovanDirector of Marketing: Maggie Moylan LeenMarketing Manager: Alison HaskinsTeam Lead, Project Management: Jeff Holcomb Senior Production Project Manager: Liz NapolitanoManager, Rights & Permissions Manager: Michael JoyceRights & Permissions Coordinator: Samantha GrahamISBN 10: 0-13-342853-2ISBN 13: 978-0-13-342853-7Senior Manufacturing Buyer: Carol MelvilleInterior Designer: Liz HarasymcukCover Designer: Laura Gardner, Creative CircleCover Art: Roman Okopny/iStock Vectors/Getty ImagesFull-Service Project Management: Jen Carley, PreMediaGlobal, Inc.Composition: PreMediaGlobal. Inc.Printer/Binder: Courier/KendallvilleCover Printer: Lehigh-Phoenix Color/Hagerstown Typeface: 10/12 TimesCredits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on the appropriate page within text.Photo Credits: Laptop icon, throughout book: Zentilia/Shutterstock; Blue eye icon, throughout book: Sam D. Cruz/Shutterstock; pp. i, iii (top), 1, 3, 25, 49, 83: Ian Dagnall/Alamy; pp. i, iii (bottom), 121, 123, 151, 189, 229, 261, 287, 311: ViewApart/Fotolia; pp. 337, 339, 379, 415, 443, 471: Image Source/Getty Images; pp. 587, 589, 623, 651: Radius Images/Alamy.Microsoft and/or its respective suppliers make no representations about the suitability of the information contained in the docu-ments and related graphics published as part of the services for any purpose. All such documents and related graphics are provided “as is” without warranty of any kind. Microsoft and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all warranties and conditions of merchantability, whether express, implied or statutory, fitness for a particular purpose, title and non-infringement. In no event shall Microsoft and/or its respective suppliers be liable for any spe-cial, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from the services. The documents and related graphics contained herein could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Microsoft and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time. Partial screen shots may be viewed in full within the software version specified.Microsoft® and Windows® are registered trademarks of the Microsoft Corporation in the U.S.A. and other countries. This book is not sponsored or endorsed by or affiliated with the Microsoft Corporation. Copyright © 2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Manufactured in the United States of America. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. To obtain permission(s) to use material from this work, please submit a written request to Pearson Education, Inc., Permissions Department, One Lake Street, Upper Saddle River, New Jersey 07458, or you may fax your request to 201-236-3290.Many of the designations by manufacturers and sellers to distinguish their products are claimed as trademarks. Where those designations appear in this book, and the publisher was aware of a trademark claim, the designations have been printed in initial caps or all caps.Library of Congress Cataloging-in-Publication DataRomney, Marshall B. Accounting information systems / Marshall B. Romney, Brigham Young University, Paul J. Steinbart, Arizona State University. — Thirteenth Edition. pages cm Includes index. ISBN 978-0-13-342853-7 (alk. paper) 1. Accounting—Data processing. 2. Information storage and retrieval systems—Accounting. I. Steinbart, Paul John. II. Title. HF5679.R6296 2014 657.0285—dc23 201304483010 9 8 7 6 5 4 3 2 1
vPART I Conceptual Foundations of Accounting Information Systems 1 ChapTer 1 accounting information Systems: an overview 2 ChapTer 2 overview of Transaction processing and enterprise resource planning Systems 24 ChapTer 3 Systems documentation Techniques 48 ChapTer 4 relational databases 82PART II Control and Audit of Accounting Information Systems 121 ChapTer 5 Computer Fraud 122 ChapTer 6 Computer Fraud and abuse Techniques 150 ChapTer 7 Control and accounting information Systems 188 ChapTer 8 Controls for information Security 228 ChapTer 9 Confidentiality and privacy Controls 260 ChapTer 10 processing integrity and availability Controls 286 ChapTer 11 auditing Computer-Based information Systems 310PART III Accounting Information Systems Applications 337 ChapTer 12 The revenue Cycle: Sales to Cash Collections 338 ChapTer 13 The expenditure Cycle: purchasing to Cash disbursements 378 ChapTer 14 The production Cycle 414 ChapTer 15 The human resources Management and payroll Cycle 442 ChapTer 16 General Ledger and reporting System 470Brief ContentsPreface xix
viBRIeF ConTenTSPART IV The ReA Data Model 501 ChapTer 17 database design Using the rea data Model 502 ChapTer 18 implementing an rea Model in a relational database 534 ChapTer 19 Special Topics in rea Modeling 556PART V The Systems Development Process 587 ChapTer 20 introduction to Systems development and Systems analysis 588 ChapTer 21 aiS development Strategies 622 ChapTer 22 Systems design, implementation, and operation 650Glossary 676Index 697
viiContentsPreface xixPART I Conceptual Foundations of Accounting Information Systems 1 ChapTer 1 accounting information Systems: an overview 2Introduction 3Information Needs and Business Processes 5Information Needs 5Business Processes 6Accounting Information Systems 10How an AIS Can Add Value to an Organization 11The AIS and Corporate Strategy 12The Role of the AIS in the Value Chain 14Summary and Case Conclusion 15 ■ Key Terms 16AIS IN ActIoN: Chapter Quiz 16 ■ Discussion Questions 17 ■ Problems 18cASe 1-1 Ackoff’s Management Misinformation Systems 21AIS IN ActIoN SolutIoNS: Quiz Key 22 ChapTer 2 overview of Transaction processing and enterprise resource planning Systems 24Introduction 25transaction Processing: the Data Processing cycle 26Data Input 26Data Storage 27Data Processing 33Information Output 33enterprise Resource Planning (eRP) Systems 35Summary and Case Conclusion 38 ■ Key Terms 38AIS IN ActIoN: Chapter Quiz 38 ■ Discussion Questions 39 ■ Problems 40cASe 2-1 Bar Harbor Blueberry Farm 44AIS IN ActIoN SolutIoNS: Quiz Key 45 ChapTer 3 Systems documentation Techniques 48Introduction 49Data Flow Diagrams 50Subdividing the DFD 52
viiiFlowcharts 56Types of Flowcharts 57Program Flowcharts 60Business Process Diagrams 60Summary and Case Conclusion 64 ■ Key Terms 64AIS IN ActIoN: Chapter Quiz 64 ■ Comprehensive Problem 65 ■ Discussion Questions 66 ■ Problems 66cASe 3-1 Dub 5 73AIS IN ActIoN SolutIoNS: Quiz Key 74 ■ Comprehensive Problem Solution 76 ChapTer 4 relational databases 82Introduction 82Files Versus Databases 83Using Data Warehouses for Business Intelligence 84The Advantages of Database Systems 85The Importance of Good Data 85Database Systems 86Logical and Physical Views of Data 86Schemas 86The Data Dictionary 88DBMS Languages 88Relational Databases 88Types of Attributes 88Designing a Relational Database for S&S, Inc. 90Basic Requirements of a Relational Database 92Two Approaches to Database Design 93Creating Relational Database Queries 93Query 1 95Query 2 97Query 3 98Query 4 98Query 5 100Database Systems and the Future of Accounting 100Summary and Case Conclusion 101 ■ Key Terms 102AIS IN ActIoN: Chapter Quiz 102 ■ Comprehensive Problem 103 ■ Discussion Questions 104 ■ Problems 104cASe 4-1 Research Project 110AIS IN ActIoN SolutIoNS: Quiz Key 110 ■ Comprehensive Problem Solution 112 ■ Appendix: Data Normalization 114 ■ Summary 117 ■ Second Normalization Example 117PART II Control and Audit of Accounting Information Systems 121 ChapTer 5 Computer Fraud 122Introduction 123AIS threats 124Introduction to Fraud 126Misappropriation of Assets 127Fraudulent Financial Reporting 128SAS No. 99: The Auditor’s Responsibility to Detect Fraud 128Who Perpetrates Fraud and Why 129The Fraud Triangle 129ConTenTS
ixConTenTScomputer Fraud 134The Rise in Computer Fraud 134Computer Fraud Classifications 136Preventing and Detecting Fraud and Abuse 138Summary and Case Conclusion 139 ■ Key Terms 140AIS IN ActIoN: Chapter Quiz 140 ■ Discussion Questions 141 ■ Problems 142cASe 5-1 David L. Miller: Portrait of a White-Collar Criminal 144cASe 5-2 Heirloom Photo Plans 145AIS IN ActIoN SolutIoNS: Quiz Key 147 ChapTer 6 Computer Fraud and abuse Techniques 150Introduction 150computer Attacks and Abuse 151Social engineering 159Malware 164Summary and Case Conclusion 173 ■ Key Terms 174AIS IN ActIoN: Chapter Quiz 175 ■ Discussion Questions 176 ■ Problems 176cASe 6-1 Shadowcrew 184AIS IN ActIoN SolutIoNS: Quiz Key 185 ChapTer 7 Control and accounting information Systems 188Introduction 189Why Threats to Accounting Information Systems are Increasing 189overview of control concepts 190The Foreign Corrupt Practices and Sarbanes–Oxley Acts 191control Frameworks 192COBIT Framework 192COSO’s Internal Control Framework 194COSO’s Enterprise Risk Management Framework 194The Enterprise Risk Management Framework Versus the Internal Control Framework 196the Internal environment 196Management’s Philosophy, Operating Style, and Risk Appetite 197Commitment to Integrity, Ethical Values, and Competence 197Internal Control Oversight by the Board of Directors 198Organizational Structure 198Methods of Assigning Authority and Responsibility 198Human Resources Standards that Attract, Develop, and Retain Competent Individuals 198External Influences 200objective Setting 200event Identification 201Risk Assessment and Risk Response 201Estimate Likelihood and Impact 202Identify Controls 203Estimate Costs and Benefits 203Determine Cost/Benefit Effectiveness 203Implement Control or Accept, Share, or Avoid the Risk 203control Activities 204Proper Authorization of Transactions and Activities 204Segregation of Duties 205Project Development and Acquisition Controls 207Change Management Controls 208
xDesign and Use of Documents and Records 208Safeguard Assets, Records, and Data 208Independent Checks on Performance 209Information and communication 210Monitoring 210Perform Internal Control Evaluations 210Implement Effective Supervision 210Use Responsibility Accounting Systems 210Monitor System Activities 211Track Purchased Software and Mobile Devices 211Conduct Periodic Audits 211Employ a Computer Security Officer and a Chief Compliance Officer 212Engage Forensic Specialists 212Install Fraud Detection Software 212Implement a Fraud Hotline 213Summary and Case Conclusion 213 ■ Key Terms 214AIS IN ActIoN: Chapter Quiz 214 ■ Discussion Questions 216 ■ Problems 216cASe 7-1 The Greater Providence Deposit & Trust Embezzlement 224AIS IN ActIoN SolutIoNS: Quiz Key 225 ChapTer 8 Controls for information Security 228Introduction 228two Fundamental Information Security concepts 230Security is a Management Issue, Not Just a Technology Issue 230Defense-in-Depth and the Time-Based Model of Information Security 231understanding targeted Attacks 232Preventive controls 233People: Creation of a “Security-Conscious” Culture 233People: Training 234Process: User Access Controls 235It Solutions: Antimalware Controls 238It Solutions: Network Access Controls 238It Solutions: Device and Software Hardening Controls 243It Solutions: Encryption 244Physical Security: Access Controls 245Change Controls and Change Management 246Detective controls 247Log Analysis 247Intrusion Detection Systems 248Penetration Testing 248Continuous Monitoring 248corrective controls 248Computer Incident Response Team (CIRT) 249Chief Information Security Officer (CISO) 249Patch Management 250Security Implications of Virtualization and the cloud 250Summary and Case Conclusion 251 ■ Key Terms 252AIS IN ActIoN: Chapter Quiz 252 ■ Discussion Questions 253 ■ Problems 254cASe 8-1 Assessing Change Control and Change Management 257cASe 8-2 Role-Play: Designing an Effective Information Security Program 257AIS IN ActIoN SolutIoNS: Quiz Key 258ConTenTS
xiConTenTS ChapTer 9 Confidentiality and privacy Controls 260Introduction 260Preserving confidentiality 261Identify and Classify Information to be Protected 261Protecting Confidentiality With Encryption 262Controlling Access to Sensitive Information 262Training 264Privacy 264Privacy Controls 264Privacy Concerns 265Privacy Regulations and Generally Accepted Privacy Principles 267encryption 268Factors that Influence Encryption Strength 269Types of Encryption Systems 270Hashing 272Digital Signatures 272Digital Certificates and Public Key Infrastructure 274Virtual Private Networks (VPNS) 275Summary and Case Conclusion 276 ■ Key Terms 276AIS IN ActIoN: Chapter Quiz 277 ■ Discussion Questions 278 ■ Problems 278cASe 9-1 Protecting Privacy of Tax Returns 282cASe 9-2 Generally Accepted Privacy Principles 282AIS IN ActIoN SolutIoNS: Quiz Key 283 ChapTer 10 processing integrity and availability Controls 286Introduction 286Processing Integrity 286Input Controls 287Processing Controls 289Output Controls 290Illustrative Example: Credit Sales Processing 291Processing Integrity Controls in Spreadsheets 292Availability 293Minimizing Risk of System Downtime 293Recovery and Resumption of Normal Operations 294Summary and Case Conclusion 298 ■ Key Terms 299AIS IN ActIoN: Chapter Quiz 299 ■ Discussion Questions 300 ■ Problems 301cASe 10-1 Ensuring Systems Availability 306cASe 10-2 Ensuring Process Integrity in Spreadsheets 307AIS IN ActIoN SolutIoNS: Quiz Key 308 ChapTer 11 auditing Computer-Based information Systems 310Introduction 311the Nature of Auditing 312Overview of the Audit Process 312The Risk-Based Audit Approach 314Information Systems Audits 315Objective 1: Overall Security 315Objective 2: Program Development and Acquisition 317Objective 3: Program Modification 318Objective 4: Computer Processing 319Objective 5: Source Data 322Objective 6: Data Files 323
xiiConTenTSAudit Software 324operational Audits of an AIS 326Summary and Case Conclusion 326 ■ Key Terms 327AIS IN ActIoN: Chapter Quiz 327 ■ Discussion Questions 328 ■ Problems 329cASe 11-1 Preston Manufacturing 333AIS IN ActIoN SolutIoNS: Quiz Key 333PART III Accounting Information Systems Applications 337 ChapTer 12 The revenue Cycle: Sales to Cash Collections 338Introduction 340Revenue cycle Information System 341Process 341Threats and Controls 342Sales order entry 344Taking Customer Orders 345Credit Approval 347Checking Inventory Availability 349Responding to Customer Inquiries 351Shipping 352Pick and Pack the Order 352Ship the Order 354Billing 357Invoicing 357Maintain Accounts Receivable 359cash collections 362Process 362Threats and Controls 363Summary and Case Conclusion 365 ■ Key Terms 366AIS IN ActIoN: Chapter Quiz 366 ■ Discussion Questions 367 ■ Problems 367cASe 12-1 Research Project: How CPA Firms Are Leveraging New Developments in IT 375AIS IN ActIoN SolutIoNS: Quiz Key 375 ChapTer 13 The expenditure Cycle: purchasing to Cash disbursements 378Introduction 379expenditure cycle Information System 381Process 381Threats and Controls 383ordering Materials, Supplies, and Services 386Identifying What, When, and How Much to Purchase 386Choosing Suppliers 389Receiving 393Process 393Threats and Controls 394Approving Supplier Invoices 395Process 395Threats and Controls 397cash Disbursements 399Process 399Threats and Controls 399
xiiiConTenTSSummary and Case Conclusion 401 ■ Key Terms 402AIS IN ActIoN: Chapter Quiz 402 ■ Discussion Questions 403 ■ Problems 404cASe 13-1 Research Project: Impact of Information Technology on Expenditure Cycle Activities, Threats, and Controls 411AIS IN ActIoN SolutIoNS: Quiz Key 412 ChapTer 14 The production Cycle 414Introduction 415Production cycle Information System 417Process 418Threats and Controls 418Product Design 419Process 419Threats and Controls 421Planning and Scheduling 421Production Planning Methods 421Key Documents and Forms 421Threats and Controls 424Production operations 426Threats and Controls 426cost Accounting 428Process 428Threats and Controls 429Summary and Case Conclusion 434 ■ Key Terms 435AIS IN ActIoN: Chapter Quiz 435 ■ Discussion Questions 436 ■ Problems 436cASe 14-1 The Accountant and CIM 439AIS IN ActIoN SolutIoNS: Quiz Key 440 ChapTer 15 The human resources Management and payroll Cycle 442Introduction 443HRM/Payroll cycle Information System 444Overview of HRM Process and Information Needs 444Threats and Controls 447Payroll cycle Activities 449Update Payroll Master Database 449Validate Time and Attendance Data 451Prepare Payroll 453Disburse Payroll 457Calculate and Disburse Employer-Paid Benefits Taxes and Voluntary Employee Deductions 458outsourcing options: Payroll Service Bureaus and Professional employer organizations 459Summary and Case Conclusion 460 ■ Key Terms 461AIS IN ActIoN: Chapter Quiz 461 ■ Discussion Questions 462 ■ Problems 462cASe 15-1 Research Report: HRM/Payroll Opportunities for CPAs 467AIS IN ActIoN SolutIoNS: Quiz Key 468 ChapTer 16 General Ledger and reporting System 470Introduction 471General ledger and Reporting System 472Process 472Threats and Controls 473
xivupdate General ledger 475Process 475Threats and Controls 475Post Adjusting entries 478Process 479Threats and Controls 479Prepare Financial Statements 480Process 480Threats and Controls 484Produce Managerial Reports 486Process 486Threats and Controls 486Summary and Case Conclusion 490 ■ Key Terms 491AIS IN ActIoN: Chapter Quiz 491 ■ Discussion Questions 492 ■ Problems 493cASe 16-1 Exploring XBRL Tools 497cASe 16-2 Evaluating a General Ledger Package 497cASe 16-3 Visualization tools for Big Data 497AIS IN ActIoN SolutIoNS: Quiz Key 498PART IV The ReA Data Model 501 ChapTer 17 database design Using the rea data Model 502Introduction 502Database Design Process 503entity-Relationship Diagrams 504the ReA Data Model 505Three Basic Types of Entities 506Structuring Relationships: The Basic REA Template 506Developing an ReA Diagram 509Step 1: Identify Relevant Events 509Step 2: Identify Resources and Agents 511Step 3: Determine Cardinalities of Relationships 512Summary and Case Conclusion 518 ■ Key Terms 519AIS IN ActIoN: Chapter Quiz 519 ■ Comprehensive Problem 522 ■ Discussion Questions 522 ■ Problems 523cASe 17-1 REA Data Modeling Extension 526AIS IN ActIoN SolutIoNS: Quiz Key 526 ■ Comprehensive Problem Solution 530 ChapTer 18 implementing an rea Model in a relational database 534Introduction 535Integrating ReA Diagrams Across cycles 535Rules for combining ReA Diagrams 538Merging Redundant Resource Entities 538Merging Redundant Event Entities 539Validating the Accuracy of Integrated REA Diagrams 540Implementing an ReA Diagram in a Relational Database 540Step 1: Create Tables for Each Distinct Entity and M:N Relationship 540Step 2: Assign Attributes to Each Table 542Step 3: Use Foreign Keys to Implement 1:1 and 1:N Relationships 543Completeness Check 544using ReA Diagrams to Retrieve Information from a Database 545Creating Journals and Ledgers 545ConTenTS
xvConTenTSGenerating Financial Statements 546Creating Managerial Reports 547Summary and Case Conclusion 547 ■ Key Term 548AIS IN ActIoN: Chapter Quiz 548 ■ Comprehensive Problem 549 ■ Discussion Questions 549 ■ Problems 550cASe 18-1 Practical Database Design 551AIS IN ActIoN SolutIoNS: Quiz Key 551 ■ Comprehensive Problem Solution 553 ChapTer 19 Special Topics in rea Modeling 556Introduction 557Additional Revenue and expenditure cycle Modeling topics 557Additional Revenue Cycle Events and Attribute Placement 557Additional Expenditure Cycle Events and Attribute Placement 559Sale of Services 562Acquisition of Intangible Services 562Digital Assets 563Rental Transactions 563Additional ReA Features 565Employee Roles 565M:N Agent–Event Relationships 565Locations 565Relationships Between Resources and Agents 565Production cycle ReA Model 566Additional Entities—Intellectual Property 566Production Cycle Events 568New REA Feature 568combined HR/Payroll Data Model 569HR Cycle Entities 569Tracking Employees’ Time 570Financing Activities Data Model 571Summary and Case Conclusion 572AIS IN ActIoN: Chapter Quiz 575 ■ Discussion Questions 576 ■ Problems 577cASe 19-1 Practical Database Assignment 581AIS IN ActIoN SolutIoNS: Quiz Key 581 ■ Appendix: Extending the REA Model to Include Information About Policies 585PART V The Systems Development Process 587 ChapTer 20 introduction to Systems development and Systems analysis 588Introduction 589Systems Development 591The Systems Development Life Cycle 591The Players 592Planning Systems Development 593Planning Techniques 594Feasibility Analysis 595Capital Budgeting: Calculating Economic Feasibility 596Behavioral Aspects of change 598Why Behavioral Problems Occur 598How People Resist Change 598Preventing Behavioral Problems 599
xviSystems Analysis 600Initial Investigation 600Systems Survey 601Feasibility Study 603Information Needs and Systems Requirements 603Systems Analysis Report 605Summary and Case Conclusion 606 ■ Key Terms 607AIS IN ActIoN: Chapter Quiz 608 ■ Comprehensive Problem 609 ■ Discussion Questions 609 ■ Problems 610cASe 20-1 Audio Visual Corporation 617AIS IN ActIoN SolutIoNS: Quiz Key 618 ■ Comprehensive Problem Solution 620 ChapTer 21 aiS development Strategies 622Introduction 623Purchasing Software 623Selecting a Vendor 624Acquiring Hardware and Software 624Evaluating Proposals and Selecting a System 625Development by In-House Information Systems Departments 627End-User-Developed Software 627Advantages and Disadvantages of End-User Computing 628Managing and Controlling End-User Computing 629outsourcing the System 630Advantages and Disadvantages of Outsourcing 630Business Process Management 631Internal Controls in a Business Process Management System 632Prototyping 633When to Use Prototyping 634Advantages of Prototyping 634Disadvantages of Prototyping 635computer-Aided Software engineering 635Summary and Case Conclusion 636 ■ Key Terms 637AIS IN ActIoN: Chapter Quiz 637 ■ Comprehensive Problem Freedom from Telemarketers—the do Not Call List 638 ■ Discussion Questions 638 ■ Problems 639cASe 21-1 Professional Salon Concepts 644AIS IN ActIoN SolutIoNS: Quiz Key 646 ■ Comprehensive Problem Solution 649 ChapTer 22 Systems design, implementation, and operation 650Introduction 651conceptual Systems Design 651Evaluate Design Alternatives 651Prepare Design Specifications and Reports 653Physical Systems Design 653Output Design 654File and Database Design 654Input Design 655Program Design 656Procedures and Controls Design 657Systems Implementation 658Implementation Planning and Site Preparation 658Selecting and Training Personnel 659Complete Documentation 660Testing the System 660ConTenTS
xviiConTenTSSystems conversion 661operation and Maintenance 662Summary and Case Conclusion 663 ■ Key Terms 664AIS IN ActIoN: Chapter Quiz 664 ■ Comprehensive Problem Hershey’s Big Bang ERP 665 ■ Discussion Questions 666 ■ Problems 667cASe 22-1 Citizen’s Gas Company 672AIS IN ActIoN SolutIoNS: Quiz Key 673 ■ Comprehensive Problem Solution 675Glossary 676Index 697
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xixPrefaceTo the InstructorThis book is intended for use in a one-semester course in accounting information systems at either the undergraduate or graduate level. Introductory financial and managerial accounting courses are suggested prerequisites, and an introductory information systems course that cov-ers a computer language or software package is helpful, but not necessary. The book can also be used as the main text in graduate or advanced undergraduate man-agement information systems courses. The topics covered in this text provide information systems students with a solid under-standing of transaction processing systems that they can then build on as they pursue more in-depth study of specific topics such as databases, data warehouses and data mining, networks, systems analysis and design, computer security, and information system controls.EnhancEmEnts in thE thirtEEnth EditionPerhaps the most noticeable change in the thirteenth edition is the change from a two-color design to a full-color design. This improves the readability of figures and diagrams, making it easier for students to understand relationships among concepts. We also made extensive revisions to the content of the material to incorporate recent developments, while retaining the features that have made prior editions easy to use. Every chapter has been updated to include up-to-date examples of important concepts. Specific changes include: 1. Introduction of business process diagrams in Chapter 3 and their use in the five chapters of Part III to provide an easy-to-understand method for showing the sequential flow of activities within business processes. 2. More detailed discussion of internal control frameworks: COSO, COSO-ERM, and COBIT. In particular, we discuss the new revision to the COSO framework and have up-dated the discussion of IT controls to reflect the new distinction between governance and management that was introduced in COBIT 5. 3. Updated discussion of information security countermeasures, including the security and control implications associated with virtualization and cloud computing. We also moved the material on change management from Chapter 10 to Chapter 8 to reflect its impor-tance as one of the key layers of defense. 4. Annotation of the data flow diagrams in the five chapters of Part III to include informa-tion about when and where major internal control threats exist within each business pro-cess. In addition, in each chapter the discussion of controls to mitigate the various threats has also been revised to explicitly reference the summary table of threats and counter-measures found in each chapter. Each chapter also explicitly discusses how to properly configure ERP systems to enforce proper segregation of duties.
PReFACexx 5. Many new end-of-chapter discussion questions and problems, including additional Excel exercises that are based on articles from the Journal of Accountancy so that students can develop the specific skills used by practitioners. 6. Many new computer fraud and abuse techniques have been added to help students under-stand the way systems are attacked. 7. The database chapter has been updated with all new tables and figures so that the Micro-soft Access screen shots reflect the latest version of that product. At the request of some of our loyal adopters, an Appendix to Chapter 4 is included with this edition of the text that discusses database normalization.customizing this tExtPearson Custom Library can help you customize this textbook to fit how you teach the course. You can select just the chapters from this text that you plan to cover and arrange them in the sequence you desire. You even have the option to add your own material or third party content. In addition, you may choose an alternate version of the REA material presented in Chapters 17–19 that uses the Batini style notation instead of the crows feet notation featured in this book. To explore how to create a customized version of the book you can contact your Pearson representative.supplEmEntal rEsourcEsAs with prior editions, our objective in preparing this thirteenth edition has been to simplify the teaching of AIS by enabling you to concentrate on classroom presentation and discussion, rather than on locating, assembling, and distributing teaching materials. To assist
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