Page 21 - Accounting Information Systems

xx Preface

Chapter 15, ‘‘IT Controls Part I: Sarbanes-Oxley and IT Governance’’
A major new section in this chapter deals with IT outsourcing. It examines the motiva-
tions and theories underlying outsourcing decisions and speaks to a number of risk issues
that auditors need to understand. The chapter has also been expanded to include a discus-
sion of several computer fraud techniques. Computer fraud loss estimates vary greatly
among researchers. Uncertainty exists, in part, because computer fraud is itself not well
defined. All agree, however, that computer fraud is a rapidly growing phenomenon.

Organization and Content

PART I: OVERVIEW OF ACCOUNTING
INFORMATION SYSTEMS
Chapter 1, ‘‘The Information System: An Accountant’s Perspective’’
Chapter 1 places the subject of accounting information systems in perspective for
accountants. It is divided into four major sections, each dealing with a different aspect
of information systems.
• The first section explores the information environment of the firm. It introduces ba-
sic systems concepts, identifies the types of information used in business, describes
the flow of information through an enterprise, and presents a framework for viewing
accounting information systems in relation to other information systems compo-
nents.
• The second section deals with the impact of organizational structure on AIS. The
centralized and distributed models are used to illustrate extreme cases.
• The third section reviews the evolution of information systems models. Accounting
information systems are represented by a number of different approaches or models.
Five dominant models are examined: manual processes; flat-file systems; the data-
base approach; the resources, events, agents (REA) model; and enterprise resource
planning (ERP) systems.
• The final section discusses the role of accountants as users, designers, and auditors
of AIS. The nature of the responsibilities shared by accountants and computer pro-
fessionals for developing AIS applications are examined.

Chapter 2, ‘‘Introduction to Transaction Processing’’
Chapter 2 divides the treatment of transaction processing systems into five major sec-
tions.
• The first section provides an overview of transaction processing, showing its vital
role as an information provider for financial reporting, internal management report-
ing, and the support of day-to-day operations. Three transaction cycles account for
most of a firm’s economic activity: the revenue cycle, the expenditure cycle, and the
conversion cycle.
• The second section describes the relationship among accounting records in both
manual and computer-based systems.
• The third section of the chapter presents an overview of documentation techniques
used to describe the key features of systems. Five types of documentation are com-
monly used: data flow diagrams, entity relationship diagrams, system flowcharts,
program flowcharts, and record layout diagrams.
• The fourth section presents two computer-based transaction processing systems—
batch processing using real-time data collection and real-time processing—and the
operational efficiency issues associated with each.
• The final section examines data coding schemes, their role in transaction processing
and AIS as a means of coordinating and managing a firm’s transactions, and the