Accounting Information Systems 14th Edition

Book Preface

To the Instructor
This 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 covers 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 management information systems courses.
The topics covered in this text provide information systems students with a solid understanding of transaction processing systems that they can then build on as they pursue more indepth study of specific topics such as databases, data warehouses and data mining, networks,  systems analysis and design, cloud computing, virtualization, computer security, and information system controls.

ENHANCEMENTS IN THE FOURTEENTH EDITION
We 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. We discuss the new revision to the COSO framework and have updated the discussion of
IT controls to reflect the new distinction between governance and management that was  introduced in COBIT 5.
2. Updated discussion of information security countermeasures, including the security and  control implications associated with virtualization and cloud computing.
3. Updated end-of-chapter discussion questions and problems, including Excel exercises that are based on articles from the Journal of Accountancy so that students can  develop the specific skills used by practitioners. Most chapters also include a problem  that consists of multiple-choice questions that we have used in our exams to provide  students with an additional chance to check how well they understand the chapter  material.
4. Many new computer fraud and abuse techniques have been added to help students understand the way systems are attacked.
5. Chapter 21 includes a new section on agile development technologies that discusses  scrum development, extreme programming, and unified process development.

CUSTOMIZING THIS TEXT
Pearson 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 RESOURCES

As with prior editions, our objective in preparing this fourteenth 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 you in this  process, the following supplementary materials are available to adopters of the text:
● Solutions Manual prepared by Marshall Romney at Brigham Young University and Paul John Steinbart at Arizona State University
● Instructors Manual prepared by Robyn Raschke at University of Nevada–Las Vegas
● Test Item File prepared by Lawrence Chui at University of St. Thomas
● TestGen testing software, a computerized test item file
● PowerPoint Presentation slides developed by Robyn Raschke at University of Nevada Las Vegas

The fourteenth edition includes an entirely new set of PowerPoint slides that make extensive use of high-quality graphics to illustrate key concepts. The slides do not merely consist  of bullet points taken verbatim from the text, but instead are designed to help students notice  and understand important relationships among concepts. The large number of slides provides  instructors a great deal of flexibility in choosing which topics they wish to emphasize in class. In addition, you can access all these supplements from the protected instructor area of www.pearsonhighered.com.

We recognize that you may also wish to use specific software packages when teaching  the AIS course. Contact your Pearson representative to learn about options for bundling this  text (or a customized version) with software packages or other texts such as Computerized  Practice Set for Comprehensive Assurance & System Tool (CAST); Manual Practice Set for  Comprehensive Assurance and Systems Tool (CAST); Comprehensive Assurance & System  Tools (CAST): An Integrated Practice Set; or Assurance Practice Set for Comprehensive Assurance & System Tool (CAST), all written by Laura R. Ingraham and J. Gregory Jenkins, both  at North Carolina State University

REVEL™
Educational Technology Designed for the Way Today’s Students Read, Think, and Learn
When students are engaged deeply, they learn more effectively and perform better in their  courses. This simple fact inspired the creation of REVEL: an interactive learning environment  designed for the way today’s students read, think, and learn.
REVEL enlivens course content with media interactives and assessments—integrated directly within the authors’ narrative—that provide opportunities for students to read, practice, and  study in one continuous experience. This immersive educational technology replaces the textbook and is designed to measurably booststudents’ understanding, retention, and preparedness. Learn more about REVEL http://www.pearsonhighered.com/revel/

To the Student

As did previous editions, the fourteenth edition of Accounting Information Systems is designed  to prepare you for a successful accounting career whether you enter public practice, industry,  or government. All of you will be users of accounting information systems. In addition to being  users, some of you will become managers. Others will become internal and external auditors,  and some of you will become consultants. Regardless of your role, you will need to understand  how accounting information systems work in order to effectively measure how cost-effectively they perform, to assess their reliability and that of the information produced, or to lead the  redesign and implementation of new and better systems. Mastering the material presented in  this text will give you the foundational knowledge you need in order to excel at all those tasks.
This text discusses important new IT developments, such as virtualization and the move to  cloud computing, because such developments affect business processes and often cause organizations to redesign their accounting systems to take advantage of new capabilities. The focus,  however, is not on IT for the sake of IT, but on how IT affects business processes and controls.  Indeed, new IT developments not only bring new capabilities, but also often create new threats  and affect the overall level of risk. This text will help you understand these issues so that you  can properly determine how to modify accounting systems controls to effectively address those  new threats and accurately assess the adequacy of controls in those redesigned systems. We also  discuss the effect of recent regulatory developments, such as the SEC mandate to use XBRL and  the pending switch from GAAP to IFRS, on the design and operation of accounting systems.
In addition to technology- and regulatory-driven changes, companies are responding to the  increasingly competitive business environment by reexamining every internal activity in an effort to reap the most value at the least cost. As a result, accountants are being asked to do more than simply report the results of past activities. They must take a more proactive role in both  providing and interpreting financial and nonfinancial information about the organization’s activities. Therefore, throughout this text we discuss how accountants can improve the design and  functioning of the accounting information system (AIS) so that it truly adds value to the organization by providing management with the information needed to effectively run an organization

Brief Contents

PART 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 50
CHAPTER 4 Relational Databases 84
PART II Control and Audit of Accounting Information Systems 125
CHAPTER 5 Fraud 126
CHAPTER 6 Computer Fraud and Abuse Techniques 156
CHAPTER 7 Control and Accounting Information Systems 196
CHAPTER 8 Controls for Information Security 236
CHAPTER 9 Confidentiality and Privacy Controls 270
CHAPTER 10 Processing Integrity and Availability Controls 296
CHAPTER 11 Auditing Computer-Based Information Systems 322
PART III Accounting Information Systems Applications 351
CHAPTER 12 The Revenue Cycle: Sales to Cash Collections 352
CHAPTER 13 The Expenditure Cycle: Purchasing to Cash Disbursements 394
CHAPTER 14 The Production Cycle 432
CHAPTER 15 The Human Resources Management and Payroll Cycle 462
CHAPTER 16 General Ledger and Reporting System 492
PART IV The REA Data Model 525
CHAPTER 17 Database Design Using the REA Data Model 526
CHAPTER 18 Implementing an REA Model in a Relational Database 560
CHAPTER 19 Special Topics in REA Modeling 584
PART V The Systems Development Process 617
CHAPTER 20 Introduction to Systems Development and  Systems Analysis 618
CHAPTER 21 AIS Development Strategies 654
CHAPTER 22 Systems Design, Implementation, and Operation 682
Glossary 708
Index 729