Accounting Information System by Bodnar

7/17/2019 Accounting Information System by Bodnar

http://slidepdf.com/reader/full/accounting-information-system-by-bodnar 1/8

Tenth Edition

CCOUNTING INFORM TION

SYSTEMS

George H BodnarDuquesne University

William S Hopwood lorida tlantic University

Boston Co lum bus Indianapo lis New York San Francisco Up per Saddle RiverAmsterdam Cape Town Dubai London M adrid Milan MunichParis M ontreal Toronto Delhi Mexico City Sao Paulo Sydney

Ho ng Kong Seoul Singapore Taipei Tokyo



CONTENTS

Preface x

Part I Introduction to Accounting Info rm ationSystems 1

Chapter 1 Accounting Inform ation Systems: An Overview 1Ac cou nting Info rm atio n Systems and Business Orga nizations 1

Infor m ation and Decisions 1 • Info rm ation Systems 3Acco unting Inform ation Systems and App lication Architecture 5Business Processes 8

Business Process Reference Models 8 • Internal Contro l Process 12Accou nting and Inform ation Technology 15

The Info rm atio n System Function 15 • End-User Co m putin g 17Quick-Response Technology 18

The Acc ounta nt and Systems Dev elopm ent 23The Na ture of Systems De ve lop m en t 23 • BusinessProcess Blu ep rintin g 24 • Behav ioral Con siderationsin Systems De velo pm ent 25 • Green IT: Des igning fo rSustainability 25

Summary 26 • Glossary 26 • Webliography 28 • ChapterQuiz 28 • Review Questions 29 • Discussion Questions andProblems 30 • Web Research Assignments 34 • Answers toChapter Quiz 37

C ha pt er 2 Systems Techniques and Docum entation 38Users of Systems Techniques 38

Use of Systems Techniques in A ud iting 38 • Use of SystemsTechniques in Systems De velopm ent 39 • Use of SystemsTechniques by Sarbanes-Oxley Ac t Com pliance Participants 40

Systems Techniques 41Flow cha rting Symbols 41 • Symbol Use in Flow cha rting 43IPO and HIPO Charts 45 • Systems an d Prog ram Flowcharts 46Logical Data Flow Diagrams 46 • Logical Data Flow Diagramsand Structured Analysis 47 • Analytic, Docu me nt, and

Forms Dis tribution Flowcharts 48 • A nalytic Flowc hartingIllustration 50 • Un ified M ode ling Language™ 55Business Process Diagram s 57 • Na rrative Techniques 60Resource Utiliz at ion Analysis 62 • Dec ision AnalysisTechniques 64 • Software fo r Systems Techniques 65

Summary 66 • Glossary 68 • Webliography 68 • ChapterQuiz 69 • Review Problem 70 • Review Questions 71Discussion Questions and Problems 71 • Web ResearchAssignments 78 • Answers to Chapter Quiz 80



v Contents

Chapter 3 eBusiness and eComm erce 81Int rodu ctio n: Electronic Business and Electronic Commerce 81

Electronic Ne tworks 81 • Client and Servers 84eBusiness and Enterprise Arc hitec ture 86

^ The Business Ar ch itec tur e 88 • The Data Architecture 88The App lications Arch itecture 92 • The Technical

Architecture 95Enterprise Arch itecture Frameworks 96Business Process Frameworks and Reference Models 96eBusiness Arch itectures 97

eComm erce Technologies 98Introduc tion 98 • Types Of Enc ryption Systems 98

Security Issues fo r Public-Key Encryption Systems 103Cryptanalysis Attacks 103 • Factoring Attacks 103Key Mana geme nt 104

Electronic Commerce Technologies: Issues and App lication s 107Privacy Issues 107 • The Inte rne t Store 110 • In teg ra tin gthe Web Store w ith the Ac cou nting System 111 • Trust ineCommerce: Privacy, Business Practices, and TransactionIntegrity 112

Summary 113 • Glossary 115 • Webliography 118 • ChapteQuiz 119 • Review Questions 120 • Discussion Questions andProblems 120 • Web Research Assignments 124 • Answers toChapter Quiz 127

C h a p te r 4 Transaction Processing and th e Inter nal Co ntrol Process 128The Necessity fo r Controls 128

Enterprise Risk Mana gem ent 128 • Controls an d Exposures Com mo n Exposures 129 • Fraud and W hite-C ollar Crime 13Co m pute r Processing and Exposures 132 • C on trol Objectivesan d Transac tion Cycles 133

Com ponents of th e Internal Con trol Process 133External Influences Concerning an Entity and InternalCo ntrol 134 • Com pliance w it h SOX Section 404 137 • TImpa ct of th e Business Env ironm ent on Interna l Co ntro l 13Co ntrol En viron me nt 138 • Risk Assessment 144 • C ontrActivities 144 • Inform ation and Com m unication 147Monitoring 148

Transaction Processing Controls 149General Controls 149 • Application Controls 151Preve ntative, Detec tive, and Corrective Con trols 155Com mu nicating the Objectives of Internal Co ntrol 156Goals and Behavior Patterns 156

Analysis of Internal Con trol Processes 158Ana lytic Techniques 158 • Internal Con trol and Com pliance in

Small Business and Small Public Com panies 161 • Illustra tion an Internal Co ntrol Analysis 162



Contents

Summary 163 • Glossary 164 • Webliography 165 • ChapterQuiz 166 • R eview Problem 167 • Solution to ReviewProblem 167 • Assignment of Functions 167 • ReviewQuestions 167 • Discussion Questions and Problems 168Web Research Assignments 178 • Answers to ChapterQuiz 180

Ch apte r 5 Inform ation Security 181

An O verview o f Com puter and Inform ation SystemsSecurity 181The Info rm atio n Security Ma nag em ent System Life Cycle 182Interna tional Standards fo r Info rm ation Security 182The Info rm atio n Security System in the Org aniza tion 183Ana lyzing Vulne rabilities and Threats 183

Vulnerab ilities and Threats 184The Seriousness of Inf orm ation Systems Fraud 184 • IndividualsPosing a Threat to the Info rm ation System 185 • M ethod s ofAt tac k by Inform atio n Systems Personnel and Users 192

The Infor m ation Security Ma nage me nt System 195The Co ntrol Env ironmen t 195 • Controls for ActiveThreats 197 • Controls fo r Passive Threats 201 • Inte rne tSecurity—Special System an d Co nfigu rationConsiderations 202

Disaster Risk M anagem en t 205Preventing Disasters 205 • Contingency Plann ing fo rDisasters 206

Com pliance Standards 207Inform ation Security Standards 207 • Business Con tinu ityPlanning and Disaster Recovery Standards 209

Summ ary 209 • Glossary 211 • Webliography 214Chapter Quiz 214 • Review Problem 215 • Solution to ReviewProblem 215 • Review Questions 216 • Discussion Questionsand Problems 216 • Web Research Assignments 224Answers to Chapter Quiz 227

Pa rt II Business Processes 228

Chapter 6 Electronic Data Processing Systems 228The Inp ut System 228

M an ua l Inp ut Systems 228 • Electronic Inp ut Systems 233

Th e Processing System 235

Types of Files 235 • Gen eric File Processing Op er ati on s 236M an ua l Processing Systems 236 • Electronic ProcessingSystems 246 • Real-Tim e Sales Systems 247

The O ut pu t System 252Summ ary 253 • Glossary 254 • Webliography 254 • ChapterQuiz 255 • Review Problem 255 • Solution to ReviewProblem 255 • Review Questions 256 • Discussion Questionsand Problems 256 • Web Research Assignments 266Answers to Chapter Quiz 268



Contents

Chapter 7 Revenue Cycle Processes 269Sales Business Process 269

Ov erview 269 • SAP RP Illustration 271 • Standard OrderProcessing in SAP RP 276

Transaction Cycle Controls in Order Processing 277Order Entry 278 • Credit 278 • Inven tory 279 • Shipping Billing and Accounts Receivable 280 • General Ledger 280

Sarbanes-Ox ley Com pliance: Sales Business Process 281Customer Account Managem en t Business Process 283

Accounts Receivable 283Transaction Controls in the Accoun ts Receivable Business Process 2

Cash Receipts 284 • Billing 284 • Accounts Receivable 284Credit 285 • General Ledger 285 • Sales Returns andAllowances 286 • Write-O ff of Accounts Receivable 286Sarbanes-Oxley Com pliance: Accoun ts Receivable BusinessProcess 287

Cash-Received-on-Account Business Process 287Ov erview 287 • Lock-Box Co llection Systems 292

Cash-Sales Business Process 292Summary 293 • Glossary 294 • Webliography 294 • ChaptQuiz 294 • Review Problem 295 • S olution to ReviewProblem 295 • Review Questions 296 • Discussion Questionsand Problems 29 7 • Web Research ssignments 305 nswers to Chapter Quiz 307

Chapter 8 Procureme nt and Hum an Resource BusinessProcesses 308

The Procurement Business Process 308Ove rview 308 • Requirement De term ination 309 • SelectioSource s) 310 • Request fo r Q uo ta tio n 310 • Selection of aVendor 311 • Issuing of a Purchase Ord er 311 • Receipt of thGoods 312 • Invoice Ve rification 313 • Vend or Payment 3Master Records 313

Transaction Cycle Con trols over Procurem ent 314Re quisition ing Stores) 314 • Purchasing 316 • Receiving 3Stores 318 • Accounts Payable 318 • Add ition al Con trolFeatures 318 • Integrity of th e Procurem ent Business Process 3The Att ribu te Rating Approach to Vendor Selection 320Sarbanes-Oxley Compliance: Procurem ent Business Process 320

Cash Disbursements Business Process 321Accounts Payable 321 • Cash Disbursements 322 • GeneralLedger 322 • Internal A ud it 322 • Voucher Systems 322Posting of Payables 323

Huma n Resource Managem en t Business Process 324HR Processing in SAP ERP 324 • HR Data Stru cture 325

Transaction Cycle Con trols in Payroll Processing 326

Personnel 328 • Time keeping 328 • Payroll 328 • Other



Contents

Controls in Payroll 328 • Sarbanes-Oxley Compliance: PayrollBusiness Process 329 • Payroll Processing Requirements 329

Summary 330 • Glossary 331 • Webliography 331 • ChapterQuiz 332 • Review Problem 332 • Solution to ReviewProblem 333 • Review Questions 33 4 • Discussion Questionsan d Problems 335 • Web Research ssignments 347 nswers to Chapter Quiz 349

Chapter 9 The Pro du ction Business Process 35

The Production Business Process 35

Production Planning and C ontrol 35 • InventoryControl 354 • Lean Production 355 • Property AccountingApplications 356

Quick-Response Manufacturing Systems 358

Components of Quick-Response Manufacturing Systems 358

Transaction Processing in Quick-Response ManufacturingSystems 362 • Special Internal Control Considerations 37

Summary 371 • Glossary 371 • Webliography 372 • ChapterQuiz 373 • Review Problem 373 • Solution to ReviewProblem 374 • Review Questions 37 4 • Discussion Questionsan d Problems 374 • Web Research ssignments 379 nswers to Chapter Quiz 38

Part III Systems Development 8

Chapter 10 Systems Plann ing, Analysis, and Design 383

General Overview 383

Overview of Systems Plann ing and Analysis 385

Systems Plan ning and Feasibility Analysis 386

Systems Planning and Top Ma nag em ent 386 • SteeringCommittee 387 • De velop ing Objectives and SystemConstraints 387 • De velop ing a Strategic Systems Plan 387

Iden tifying Individual Projects fo r P riority 387 • Commissioningth e Systems Project 388

The Steps in Systems Analysis 388

Phase 1: Survey Curren t System 388 • Phase 2: Identify Inform ationNeeds 39 • Phase 3: Identify th e Systems Requirements 391

Phase 4: Develop a Systems Analysis R eport 391

Fact-Gathering Techniques 392

Techniques for Organizing Facts 392

Struc tured Systems Analysis and Design 393

Logical Flow and Business Process Diagrams Versus Flowcharts 393

Systems Des ign Versus Systems Analysis 394 • The Steps in

Struc tured Systems Analysis 394

Iterative Systems Dev elopm ent 396

Objec t-Oriented Design and Analysis 397 • Diagrams in ProcessOrien tation Versus Object Orie ntation 398

Overview of Systems Design 398

Steps in Systems D esign 399



i Contents

Evaluating Design Alternatives 399 • Preparing DesignSpecifications 402 • Preparing and Su bm itting th e SystemsDesign Specifications 402 • Business Process Blu ep rintin g 403

General Design Cons iderations 403O utp ut Design 403 • Database Design 404 • DataProcessing 405 • Data Input 405 • Controls and SecurityMeasures 405

Design Techniques 405Forms Design 405 • Database Design 406 • Systems DesignPackages 406 • Choosing Softw are and Hardw are 407

Con ventional W isdom in Systems Dev elopm ent 408Summary 410 • Glossary 412 • Webliography 413 • ChapteQuiz 413 • R eview Questions 414 • Discussion Questions andProblems 415 • Web Research Assignments 419Answers to Chapter Quiz 421Appendix: System Modeling 422

Ch ap ter 11 Systems Project Man agem ent Implem entation

Op eration Control 425Overview 425Systems Imp lem entation 425

Establishing Plans and Controls fo r Im plem enta tion 425Executing Im plem enta tion Activities 428 • Evaluating the NewSystem 431

Planning and Organ izing a Systems Project 431Project Selection 431 • The Project Team 431 • ProjectBrea kdow n into Tasks and Phases 433 • Time Estimates 433Project Acc ounting 436 • The Project Dev elopm entEnvironm ent 437 • All-in-One and Integ rated Platforms 440

Co ntrol Over Nonfinanc ial Inform ation Systems Resources 441Au ditin g the Informa tion System 441 • Ma intaining andM od ifying the System 441

Summ ary 442 • Glossary 442 • Webliography 443 • ChapteQuiz 443 • Review Questions 444 • Discussion Questions andProblems 444 • Web Research Assignments 445Answers to Chapter Quiz 447

Part IV Co ntem porary Info rm ation Systems Technology 44 8

Chapter 12 Data Management Concepts 448Introductory Terminology 448

Databases 448 • Basic Database Elements: Fields, Data Items,Attrib ute s, and Elements 449 • Data Occurrences 449 • Fixedand Variable-Le ngth Records 449 • Record Key and FileSequence 452

Database Ma nag em ent Systems and Their Arch itecture 453Conceptual Arch itecture 453 • Database Arch itecture at theLogical Level: Logical Data Structures 455 • DatabaseArc hitectu re: The Physical Level 461 • Economic Relations



Content

Betw een File Organiza tion Techniques 467 • PhysicalArc hitecture , Hardw are, and Response Time 469 • DatabaseArch itecture and Database Dev elopm ent 469 • Othe r Types ofLogical Structures and Related Databases 470 • Acid: ReliableProcessing of Database Transactions 471

Database M anagem en t Systems and Databases in Practice 471SQL Data M an ipula tion Language 473 • High-Level QueryLanguages 475 • R eporting Solutions 476 • Wh y Database

M anag em ent Systems Are Needed 476 • DatabaseDocu men tation and Adm inistration 478

Summary 479 • Glossary 480 • Webliography 482Chapter Quiz 482 • Review Problem 483 • Solution to ReviewProblem 483 • Review Questions 483 • Discussion Questionsand Problems 483 • Web Research Assignments 488Answers to Chapter Quiz 491

Ch ap ter 13 Aud iting Inform ation Technology 492Info rm ation Systems A ud itin g Concepts 492

Structure of a Financial Statement Au dit 492 • Au diting A roun dthe Computer 493 • Au diting Throug h the Com puter 494Au diting w ith the Com puter 494 • Risk-Based Au diting 495

Inform ation Systems Au ditin g Technology 496Test Data 496 • Integrated-Test-Facility Ap proach 497 • ParallelSimulation 499 • Aud it Software 499 • Embedded Au ditRoutines 500 • Extended Records 501 • Snapshot 501Tracing 501 • Review-of-Systems Do cum entation 502 • Con trolFlowc harting 502 • M app ing 503

Types of Info rm ation Systems Au dits 503

General App roach to an Info rm ation Systems A ud it 503Inform ation Systems App lication Audits 504 • App licationSystems Deve lopme nt Au dits 504 • Com puter Service CenterAu dits 505 • A ud itin g Service-Oriented Architectures 506

IT Governance and COBIT 506COBIT 506 • COBIT and Sarbanes-Oxley Com pliance 511Professional Ce rtifications Relating to IT Governance 512

Summ ary 512 • Glossary 513 • Webliograpy 514Chapter Quiz 514 • Review Problem 515 • Solution to ReviewProblem 515 • Review Questions 515 • Discussion Questionsand Problems 516 • Web Research Assignments 521

Answers to Chapter Quiz 524Index 525

Documents

Accounting Information System by Bodnar