Simkin, M: Core Concepts of Accounting Information Systems by Mark G. Simkin

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Chapter 1 Accounting Information Systems and the Accountant 1 1.1 Introduction: Why Study Accounting Information Systems? 1 1.2 Careers in Accounting Information Systems 2 Traditional Accounting Career Opportunities 2 Systems Consulting 2 Fraud Examiner or Forensic Accountant 3 Information Technology Auditing and Security 4 Predictive Analytics 5 1.3 Accounting and IT 6 Financial Accounting 6 Managerial Accounting 9 Auditing 12 Taxation 14 1.4 What are Accounting Information Systems? 14 Accounting Information Systems 14 The Role of Accounting Information Systems in Organizations 18 1.5 What's New in Accounting Information Systems? 19 Cloud Computing--Impact for Accountants 19 Corporate Responsibility Reporting 20 Suspicious Activity Reporting 21 Forensic Accounting, Governmental Accountants, and Terrorism 22 Corporate Scandals and Accounting 22 Chapter 2 Accounting on the Internet 32 2.1 Introduction 32 2.2 The Internet and World Wide Web 33 Internet Addresses and Software 33 Intranets and Extranets 34 The World Wide Web, HTML, and IDEA 35 Groupware, Electronic Conferencing, and Blogs 35 Social Media and its Value to Accountants 36 2.3 XBRL--Financial Reporting on the Internet 37 XBRL Instance Documents and Taxonomies 38 The Benefits and Drawbacks of XBRL 38 The Current Status of XBRL 40 2.4 Electronic Business 41 e-Accounting 41 Retail Sales 42 E-Payments, E-Wallets, and Virtual Currencies 43 B2C, B2B, and C2C E-Commerce 46 Electronic Data Interchange 47 Cloud Computing 48 2.5 Privacy and Security on the Internet 51 Identity Theft and Privacy 51 Security 53 Spam, Phishing, Spoofing, and Ransomware 53 Firewalls, Intrusion Detection Systems, Value-Added Networks, and Proxy Servers 54 Data Encryption 57 Digital Signatures and Digital Time Stamping 58 Chapter 3 Information Technology and AISs 69 3.1 Introduction 69 3.2 The Importance of Information Technology to Accountants 70 Six Reasons 70 The Top 10 Information Technologies 71 3.3 Input, Processing, and Output Devices 72 Input Devices 72 Central Processing Units 78 Output Devices 80 3.4 Secondary Storage Devices 81 Magnetic (Hard) Disks 82 CD-ROMs, DVDs, and Blu-Ray Discs 83 Flash Memory 84 Image Processing and Record Management Systems 84 3.5 Data Communications and Networks 85 Communication Channels and Protocols 85 Local and Wide Area Networks 86 Client/Server Computing 89 Wireless Data Communications 90 Cloud Computing 93 3.6 Computer Software 93 Operating Systems 93 Application Software 94 Programming Languages 95 Chapter 4 Accounting and Data Analytics 109 4.1 Introduction 109 4.2 Big Data 110 Volume 110 Velocity 110 Variety 111 Veracity 112 4.3 Analyzing Data 112 Data Procurement 113 Data Provisioning 115 Data Analysis 116 Presentation 117 4.4 Enabling Technologies and Tools 118 Data Access 118 Analysis and Data Visualization Tools 121 4.5 Data Analytics and the Accounting Profession 123 Tax Accounting 123 Managerial Accounting 124 Assurance and Compliance 125 Chapter 5 Integrated Accounting and Enterprise Software 134 5.1 Introduction 134 5.2 Integrated Accounting Software 135 Small Business Accounting Software 136 Mid-Range and Large-Scale Accounting Software 138 Specialized Accounting Information Systems 138 5.3 Enterprise-Wide Information Systems 139 Enterprise System Functionality 140 The Architecture of Enterprise Systems 142 Business Processes and ERP Systems 145 Benefits and Risks of Enterprise Systems 145 5.4 Selecting a Software Package 149 When is a New AIS Needed? 149 Selecting the Right Software 149 Chapter 6 Introduction to Internal Control Systems and Risk Management 163 6.1 Introduction 163 Definition of Internal Control 164 Internal Control Systems 165 6.2 COSO Internal Control--Integrated Framework 165 2013 COSO Report 165 6.3 Enterprise Risk Management 169 COSO ERM Introduction 169 2004 ERM Framework 169 2017 ERM Framework 171 Risk Governance and Culture 172 Risk, Strategy, and Objective Setting 173 Risk in Execution 174 Risk Information, Communication, and Reporting 174 Monitoring Enterprise Risk Management Performance 175 6.4 Examples of Control Activities 175 Good Audit Trail 175 Sound Personnel Policies and Procedures 175 Separation of Duties 177 Physical Protection of Assets 179 6.5 Monitoring Internal Control Systems 183 Reviews of Operating Performance 183 COSO Guidance on Monitoring 183 Operating Performance vs. Monitoring 183 COBIT 5 184 6.6 Types of Controls 186 Preventive Controls 186 Detective Controls 187 Corrective Controls 187 Discerning Between Preventive, Detective, and Corrective Controls 187 6.7 Evaluating Controls 188 Requirements of the Sarbanes-Oxley Act 188 Cost-Benefit Analysis 188 A Risk Matrix 190 Chapter 7 Computer Controls for Organizations and Accounting Information Systems 200 7.1 Introduction 200 7.2 Enterprise-Level Controls 201 Risk Assessment and Security Policies 202 Designing a Security Policy 202 Integrated Security for the Organization 203 7.3 General Controls for Information Technology 204 Access to Data, Hardware, and Software 204 Personnel Policies to Protect Systems and Data 209 Additional Policies to Protect Systems and Data 211 7.4 Application Controls for Transaction Processing 217 Input Controls 218 Processing Controls 221 Output Controls 223 Chapter 8 Accounting Information Systems and Business Processes: Part I 234 8.1 Introduction 234 8.2 Business Process Fundamentals 235 Overview of the Financial Accounting Cycle 235 Coding Systems 236 8.3 Collecting and Reporting Accounting Information 237 Designing Reports 238 From Source Documents to Output Reports 239 8.4 The Sales Process 241 Objectives of the Sales Process 242 Inputs to the Sales Process 243 Outputs of the Sales Process 246 8.5 The Purchasing Process 247 Objectives of the Purchasing Process 247 Inputs to the Purchasing Process 250 Outputs of the Purchasing Process 251 8.6 Current Trends in Business Processes 254 Business Process Outsourcing (BPO) 254 Business Process Management Software 256 Chapter 9 Accounting Information Systems and Business Processes: Part II 266 9.1 Introduction 266 9.2 The Resource Management Process 267 Human Resource Management 267 Fixed-Asset Management 270 9.3 The Production Process 272 Objectives of the Production Process 272 Inputs to the Production Process 277 Outputs of the Production Process 278 9.4 The Financing Process 279 Objectives of the Financing Process 279 Inputs to the Financing Process 281 Outputs of the Financing Process 281 9.5 Business Processes in Special Industries 282 Professional Service Organizations 283 Not-for-Profit Organizations 283 Health Care Organizations 285 9.6 Business Process Reengineering 287 Why Reengineering Sometimes Fails 288 Chapter 10 Cybercrime, Fraud, and Ethics 296 10.1 Introduction 296 10.2 Cybercrime and Fraud 297 Distinguishing between Cybercrime and Fraud 297 Cybercrime Legislation 300 Cybercrime Statistics 303 10.3 Examples of Cybercrime 304 Compromising Valuable Information 304 Hacking 305 Denial of Service 307 10.4 Preventing and Detecting Cybercrime and Fraud 309 Enlist Top-Management Support 309 Increase Employee Awareness and Education 309 Assess Security Policies and Protect Passwords 310 Implement Controls 311 Identify Computer Criminals 312 Maintain Physical Security 313 Recognize the Symptoms of Employee Fraud 314 Use Data-Driven Techniques 316 Employ Forensic Accountants 316 10.5 Ethical Issues, Privacy, and Identity Theft 317 Ethical Issues and Professional Associations 317 Meeting the Ethical Challenges 318 Privacy 319 Company Policies with Respect to Privacy 320 Identity Theft 320 Chapter 11 Information Technology Auditing 329 11.1 Introduction 329 11.2 The Audit Function 330 Internal versus External Auditing 330 Information Technology Auditing 331 Evaluating the Effectiveness of Information Systems Controls 335 11.3 The Information Technology Auditor's Toolkit 337 Auditing Software 337 People Skills 340 11.4 Auditing Computerized Accounting Information Systems 340 Testing Computer Programs 341 Validating Computer Programs 342 Review of Systems Software 343 Validating Users and Access Privileges 344 Continuous Auditing 345 11.5 Information Technology Auditing Today 347 Information Technology Governance 347 The Sarbanes-Oxley Act of 2002 347 Auditing Standard No. 2201 (AS 2201) 349 ISACA Information Technology Assurance Framework 350 IIA's Global Technology Audit Guides and Guide to the Assessment of IT Risk series 351 Chapter 12 Documenting Accounting Information Systems 358 12.1 Introduction 358 12.2 Why Documentation is Important 359 12.3 Primary Documentation Tools 362 Data Flow Diagrams 363 Document Flowcharts 368 System Flowcharts 372 12.4 Other Documentation Tools 377 Program Flowcharts 378 Decision Tables and Decision Trees 379 Software Tools for Graphical Documentation and SOX Compliance 381 12.5 End-User Computing and Documentation 383 The Importance of End-User Documentation 383 Policies for End-User Computing and Documentation 385 Chapter 13 Developing and Implementing Effective Accounting Information Systems 398 13.1 Introduction 398 13.2 The Systems Development Life Cycle 399 Four Stages in the Systems Development Life Cycle 399 Systems Studies and Accounting Information Systems 401 13.3 Systems Planning 401 Planning for Success 401 Investigating Current Systems 403 13.4 Systems Analysis 403 Understanding Organizational Goals 403 Systems Survey Work 404 Data Analysis 406 Evaluating System Feasibility 406 13.5 Detailed Systems Design and Acquisition 408 Designing System Outputs, Processes, and Inputs 409 The System Specifications Report 412 Choosing an Accounting Information System 413 Outsourcing 416 13.6 Implementation, Follow-Up, and Maintenance 417 Implementation Activities 417 Managing Implementation Projects 419 Postimplementation Review 421 System Maintenance 422 Chapter 14 Database Design 434 14.1 Introduction 434 14.2 An Overview of Databases 434 What is a Database? 435 Significance of Databases 435 Storing Data in Databases 437 Additional Database Issues 439 14.3 Steps in Developing a Database Using the Resources, Events, and Agents (REA) Approach 442 Step 1--Identify Business and Economic Events 443 Step 2--Identify Entities 444 Step 3--Identify Relationships 444 Step 4--Create Entity-Relationship Diagrams 445 Step 5--Identify Attributes of Entities 446 Step 6--Convert E-R Diagrams into Database Tables 447 14.4 Normalization 449 First Normal Form 449 Second Normal Form 450 Third Normal Form 451 Chapter 15 Organizing and Manipulating the Data in Databases 462 15.1 Introduction 462 15.2 Creating Database Tables in Microsoft Access 463 Database Management Systems 463 Using Microsoft Access 463 Creating Database Tables 464 Creating Relationships 466 15.3 Entering Data in Database Tables 468 Creating Records 468 Ensuring Valid and Accurate Data Entry 469 Tips for Creating Database Tables and Records 472 15.4 Extracting Data from Databases: Data Manipulation Languages (DMLs) 473 Creating Select Queries 473 Creating Action Queries 477 Guidelines for Creating Queries 478 Structured Query Language (SQL) 478 Sorting, Indexing, and Database Programming 479 Chapter 16 Database Forms and Reports 490 16.1 Introduction 490 16.2 Forms 490 Creating Simple Forms 492 Using Forms for Input and Output Tasks 496 Subforms: Showing Data from Multiple Tables 497 Concluding Remarks about Forms 498 16.3 Reports 498 Creating Simple Reports 499 Creating Reports with Calculated Fields 502 Creating Reports with Grouped Data 504 Concluding Remarks about Reports 506 Glossary (Available online at Index 516