Title Details

Mark G. Simkin and Carolyn S. Norman are the authors of Core Concepts of Accounting Information Systems, 13th Edition, published by Wiley.

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

Certified Fraud Examiner 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 13

1.4 What Are Accounting Information Systems? 13

Accounting Information Systems 13

The Role of Accounting Information Systems in Organizations 17

1.5 What’s New in Accounting Information Systems? 18

Cloud Computing—Impact for Accountants 18

Sustainability Reporting 19

Suspicious Activity Reporting 20

Forensic Accounting, Governmental Accountants, and Terrorism 21

Corporate Scandals and Accounting 21

CHAPTER 2 Accounting on the Internet 33

2.1 Introduction 33

2.2 The Internet and WorldWideWeb 34

Internet Addresses and Software 34

Intranets and Extranets 35

TheWorldWide Web, HTML, and IDEA 36

Groupware, Electronic Conferencing, and Blogs 36

Social Media and Its Value to Accountants 37

2.3 XBRL—Financial Reporting on the Internet 38

XBRL Instance Documents and Taxonomies 38

The Benefits and Drawbacks of XBRL 40

The Current Status of XBRL 41

2.4 Electronic Business 42

e-Accounting 42

Retail Sales 43

E-Payments, E-Wallets, and Virtual Currencies 44

Business-to-Business E-Commerce 46

Electronic Data Interchange (EDI) 47

Cloud Computing 47

2.5 Privacy and Security on the Internet 49

Identity Theft and Privacy 49

Security 51

Spam and Phishing 52

Firewalls, Intrusion Detection Systems,

Value-Added Networks, and Proxy Servers 53

Data Encryption 55

Digital Signatures and Digital Time Stamping 56

CHAPTER 3 Cybercrime, Fraud, and Ethics 67

3.1 Introduction 67

3.2 Cybercrime and Fraud 68

Distinguishing Between Cybercrime and Fraud 68

Cybercrime Legislation 70

Cybercrime Statistics 72

3.3 Examples of Cybercrime 73

Compromising Valuable Information 74

Hacking 75

Denial of Service 76

3.4 Preventing and Detecting Cybercrime and Fraud 78

Enlist Top-Management Support 79

Increase Employee Awareness and Education 79

Assess Security Policies and Protect Passwords 80

Implement Controls 81

Identify Computer Criminals 82

Maintain Physical Security 83

Recognize the Symptoms of Employee Fraud 84

Use Data-Driven Techniques 85

Employ Forensic Accountants 86

3.5 Ethical Issues, Privacy, and Identity Theft 86

Ethical Issues and Professional Associations 87

Meeting the Ethical Challenges 88

Privacy 89

Company Policies with Respect to Privacy 89

Identity Theft 90

CHAPTER 4 Information Technology and AISs 99

4.1 Introduction 99

4.2 The Importance of Information Technology to Accountants 100

Six Reasons 100

The Top 10 Information Technologies 101

4.3 Input, Processing, and Output Devices 102

Input Devices 102

Central Processing Units 108

Output Devices 110

4.4 Secondary Storage Devices 111

Magnetic (Hard) Disks 112

CD-ROMs, DVDs, and Blu-Ray Discs 113

Flash Memory 114

Image Processing and Record Management Systems 114

4.5 Data Communications and Networks 115

Communication Channels and Protocols 115

Local and Wide Area Networks 116

ClientServer Computing 118

Wireless Data Communications 120

Cloud Computing 122

4.6 Computer Software 122

Operating Systems 123

Application Software 124

Programming Languages 125

CHAPTER 5 Documenting Accounting Information Systems 139

5.1 Introduction 139

5.2 Why Documentation is Important 140

5.3 Primary Documentation Tools 143

Data Flow Diagrams 144

Document Flowcharts 149

System Flowcharts 153

Process Maps 156

5.4 Other Documentation Tools 158

Program Flowcharts 159

Decision Tables and Decision Trees 160

Software Tools for Graphical Documentation and SOX Compliance 162

5.5 End User Computing and Documentation 164

The Importance of End User Documentation 165

Policies for end user Computing and Documentation 166

CHAPTER 6 Developing and Implementing Effective Accounting Information Systems 179

6.1 Introduction 179

6.2 The Systems Development Life Cycle 180

Four Stages in the Systems Development Life Cycle 180

Systems Studies and Accounting Information Systems 181

6.3 Systems Planning 182

Planning for Success 182

Investigating Current Systems 183

6.4 Systems Analysis 184

Understanding Organizational Goals 184

Systems Survey Work 185

Data Analysis 186

Evaluating System Feasibility 187

6.5 Detailed Systems Design and Acquisition 189

Designing System Outputs, Processes, and Inputs 189

The System Specifications Report 192

Choosing an Accounting Information System 193

Outsourcing 196

6.6 Implementation, Follow-Up, and Maintenance 197

Implementation Activities 198

Managing Implementation Projects 199

Postimplementation Review 202

System Maintenance 202

CHAPTER 7 Database Design 215

7.1 Introduction 215

7.2 An Overview of Databases 215

What Is a Database? 216

Significance of Databases 216

Storing Data in Databases 218

Additional Database Issues 220

7.3 Steps in Developing a Database Using the Resources, Events, and Agents (REA) Approach 223

Step 1—Identify Business and Economic Events 223

Step 2—Identify Entities 224

Step 3—Identify Relationships 225

Step 4—Create Entity-Relationship Diagrams 227

Step 5—Identify Attributes of Entities 227

Step 6—Convert E-R Diagrams into Database Tables 229

7.4 Normalization 230

First Normal Form 231

Second Normal Form 232

Third Normal Form 233

CHAPTER 8 Organizing and Manipulating the Data in Databases 243

8.1 Introduction 243

8.2 Creating Database Tables in Microsoft Access 244

Database Management Systems 244

An Introduction to Microsoft Access 244

Creating Database Tables 245

Creating Relationships 247

8.3 Entering Data in Database Tables 250

Creating Records 250

Ensuring Valid and Accurate Data Entry 251

Tips for Creating Database Tables and Records 254

8.4 Extracting Data from Databases: Data Manipulation Languages (DMLs) 255

Creating Select Queries 255

Creating Action Queries 258

Guidelines for Creating Queries 260

Structured Query Language (SQL) 260

Sorting, Indexing, and Database Programming 261

Online Analytical Processing (OLAP) and Data Mining 261

8.5 Cloud Databases and Data Warehouses 262

Cloud Databases 262

DataWarehouses 263

CHAPTER 9 Database Forms and Reports 275

9.1 Introduction 275

9.2 Forms 275

Creating Simple Forms 277

Using Forms for Input and Output Tasks 280

Subforms: Showing Data from Multiple Tables 281

Concluding Remarks About Forms 283

9.3 Reports 283

Creating Simple Reports 283

Creating Reports with Calculated Fields 287

Creating Reports with Grouped Data 289

Concluding Remarks About Reports 291

CHAPTER 10 Accounting Information Systems and Business Processes: Part I 301

10.1 Introduction 301

10.2 Business Process Fundamentals 302

Overview of the Financial Accounting Cycle 302

Coding Systems 303

10.3 Collecting and Reporting Accounting Information 304

Designing Reports 305

From Source Documents to Output Reports 306

10.4 The Sales Process 307

Objectives of the Sales Process 308

Inputs to the Sales Process 311

Outputs of the Sales Process 312

10.5 The Purchasing Process 313

Objectives of the Purchasing Process 314

Inputs to the Purchasing Process 315

Outputs of the Purchasing Process 318

10.6 Current Trends in Business Processes 320

Business Process Outsourcing (BPO) 321

Business Process Management Software 322

CHAPTER 11 Accounting Information Systems and Business Processes: Part II 333

11.1 Introduction 333

11.2 The Resource Management Process 334

Human Resource Management 334

Fixed Asset Management 337

11.3 The Production Process 340

Objectives of the Production Process 340

Inputs to the Production Process 344

Outputs of the Production Process 345

11.4 The Financing Process 346

Objectives of the Financing Process 346

Inputs to the Financing Process 348

Outputs of the Financing Process 348

11.5 Business Processes in Special Industries 349

Professional Service Organizations 350

Not-for-Profit Organizations 351

Health Care Organizations 352

11.6 Business Process Reengineering 354

Why Reengineering Sometimes Fails 355

CHAPTER 12 Integrated Accounting and Enterprise Software 363

12.1 Introduction 363

12.2 Integrated Accounting Software 364

Small Business Accounting Software 364

Mid-Range and Large-Scale Accounting Software 367

Specialized Accounting Information Systems 367

12.3 Enterprise-Wide Information Systems 368

Enterprise System Functionality 369

The Architecture of Enterprise Systems 371

Business Processes and ERP Systems 374

Benefits and Risks of Enterprise Systems 375

12.4 Selecting a Software Package 377

When Is a New AIS Needed? 378

Selecting the Right Accounting Software 378

CHAPTER 13 Introduction to Internal Control Systems 391

13.1 Introduction 391

Definition of Internal Control 392

Internal Control Systems 393

13.2 Coso Internal Control—Integrated Framework 393

1992 COSO Report 393

2013 COSO Report 395

13.3 Enterprise Risk Management 396

2004 ERM Framework 396

Using the 2004 ERM Framework 398

13.4 Examples of Control Activities 400

Good Audit Trail 400

Sound Personnel Policies and Procedures 401

Separation of Duties 402

Physical Protection of Assets 404

13.5 Monitoring Internal Control Systems 408

Reviews of Operating Performance 408

COSO Guidance on Monitoring 408

Operating Performance vs. Monitoring 408

2012 COBIT, Version 5 409

13.6 Types of Controls 411

Preventive Controls 411

Detective Controls 412

Corrective Controls 412

13.7 Evaluating Controls 412

Requirements of the Sarbanes-Oxley Act 413

Cost-Benefit Analysis 413

A Risk Matrix 415

CHAPTER 14 Computer Controls for Organizations and Accounting Information Systems 425

14.1 Introduction 425

14.2 Enterprise-Level Controls 426

Risk Assessment and Security Policies 427

Designing a Security Policy 427

Integrated Security for the Organization 427

14.3 General Controls for Information Technology 428

Access to Data, Hardware and Software 429

Personnel Policies to Protect Systems and Data 434

Additional Policies to Protect Systems and Data 436

14.4 Application Controls for Transaction Processing 442

Input Controls 443

Processing Controls 446

Output Controls 448

CHAPTER 15 Information Technology Auditing 459

15.1 Introduction 459

15.2 The Audit Function 460

Internal versus External Auditing 460

Information Technology Auditing 461

Evaluating the Effectiveness of Information Systems Controls 464

15.3 The Information Technology Auditor’s Toolkit 466

Auditing Software 466

People Skills 468

15.4 Auditing Computerized Accounting Information Systems 469

Testing Computer Programs 469

Validating Computer Programs 471

Review of Systems Software 472

Validating Users and Access Privileges 473

Continuous Auditing 474

15.5 Information Technology Auditing Today 476

Information Technology Governance 476

The Sarbanes-Oxley Act of 2002 476

Auditing Standards No. 5 (AS 5) 478

Third-Party and Information Systems Reliability Assurances 478

Index 487