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Accounting Information Systems: Understanding Business Processes, 4th Edition Wiley Binder Version

Accounting Information Systems: Understanding Business Processes, 4th Edition Wiley Binder Version

Brett Considine, Alison Parkes, Karin Olesen, Yvette Blount, Derek Speer

ISBN: 978-1-118-36257-0

Aug 2012

772 pages

Select type: Loose-leaf

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Preface x
Acknowledgements xii

Part 1 S ystems fundamentals 1
CHAPTER 1 Introduction 3
What is an accounting information system? 4
1.1 Accounting 4
1.2 Information 7
ais focus 1.1 Woolworths’ pursuit of customer intimacy 9
1.3 System 10
1.4 Definition and evolution of accounting information systems 12
1.5 The role of accounting and accounting information 15
ais focus 1.2 Using data in the organisation 17
Where next? 18
ais focus 1.3 Cyber criminals targeting small businesses 23
ais focus 1.4 Fast track to recovery 24
ais focus 1.5 The Royal Australian Mint’s system upgrade 30
Summary 32
Key terms 33
Discussion questions 33
Self-test activities 33
Problems 34
Further reading 36
Self-test answers 36
End notes 36

Part 2 S ystems characteristics and considerations 39
CHAPTER 2 Business processes 41
2.1 Organisational strategy and mission 42
ais focus 2.1 ALDI in the Australian supermarket industry 45
2.2 Organisational design 46
2.3 What is a business process? 49
2.4 Why business processes? 52
ais focus 2.2 Outsourcing opens doors in global village 54
ais focus 2.3 Telstra’s outsourcing and restructuring 55
2.5 ERP systems, business processes and best practice 56
2.6 Issues in moving to a business processbased environment 58
2.7 Changing business processes 60
ais focus 2.4 Moraitis lengths ahead 76
2.8 BPR evaluated 77
2.9 What are Australian organisations doing with information technology and processes? 78
Summary 87
Key terms 88
Discussion questions 89
Self-test activities 89
Problems 90
Further reading 96
Self-test answers 96
End notes 96

CHAPTER 3 Database concepts I 101
ais focus 3.1 Bart Construction Industries 102
3.1 The role of databases in decision making and reporting systems 103
3.2 Database concepts 104
3.3 Data redundancy 107
3.4 Database models 109
3.5 Database modelling, design and implementation of relational databases 113
3.6 Database design 117
ais focus 3.2 Aquaplan Limited 127
Summary 129
Key terms 130
Discussion questions 130
Self-test activities 132
Problems 133
Further reading 137
Self-test answers 137

CHAPTER 4 Database concepts II 139
Top-down versus bottom-up database design 140
4.1 Normalisation and database design 141
4.2 Different ways a business works = different data structures 157
4.3 Enterprise models 159
4.4 The REA accounting model 168
4.5 Differences between REA and E-R modelling 173
4.6 Database implementation 174
Summary 177
Key terms 178
Discussion questions 178
Self-test activities 178
Problems 179
Further reading 198
Self-test answers 198
End notes 198

CHAPTER 5 XBRL reporting 199
5.1 The role of xbrl in decision making
and reporting systems 200
5.2 xbrl concepts 202
5.3 Benefits of XBRL 208
5.4 Typical users of XBRL 211
ais focus 5.1 G-20 countries that use XBRL 212
5.5 Different ways to apply xbrl tags 216
5.6 Additional detail and language of xbrl tags 217
Summary 221
Key terms 222
Discussion questions 223
Self-test activities 223
Problems 223
Further reading 226
Self-test answers 227
End notes 227

CHAPTER 6 Systems documentation 229
6.1 The purpose and role of systems documentation 230
6.2 Process redesign and re-engineering,
and systems documentation 231
6.3 Organisational memory and change 232
6.4 The law and systems documentation 233
6.5 Reading systems documentation 234
ais focus 6.1 The role of software in systems documentation 235
6.6 Balancing a data flow diagram 255
6.7 Drawing systems documentation 256
6.8 Comparing the different documentation techniques 274
Summary 275
Key terms 276
Discussion questions 276
Self-test activities 277
Problems 279
Self-test answers 286
End notes 286

CHAPTER 7 Internal controls I 289
7.1 Corporate governance 290
7.2 Corporate governance in Australia 294
ais focus 7.1 Availability of information to shareholders 295
7.3 IT governance 298
7.4 IT governance frameworks and standards 300
ais focus 7.2 Australia leading the way in IT governance standards 304
ais focus 7.3 Governance issues in the organisation 304
7.5 Internal control 305
7.6 What makes up an internal control system? 308
ais focus 7.4 Fuel prices and financials 310
ais focus 7.5 Disaster recovery options 311
7.7 Identifying risks 316
7.8 COSO and COBIT 320
7.9 ERM — expanding COSO 321
ais focus 7.6 Corporate governance, financial
reporting . . . what else? 322
Summary 323
Key terms 324
Discussion questions 325
Self-test activities 325
Problems 327
Further reading 328
Self-test answers 328
End notes 328

CHAPTER 8 Internal controls II 333
8.1 Control activities, business processes and accounting 334
8.2 Types of control activities 335
ais focus 8.1 Control types in the professions 338
8.3 COSO, COBIT and control activities 340
8.4 Aims of a computerised accounting information system 342
8.5 General controls 344
ais focus 8.2 How secure is our system? 350
8.6 Application controls 352
ais focus 8.3 A million dollar data entry error 357
ais focus 8.4 Processing banking data 362
ais focus 8.5 Controls in practice 363
8.7 Disaster recovery plans 364
ais focus 8.6 Sydney disaster recovery plan 366
8.8 Execution of internal control 366
8.9 Documenting controls 367
8.10 The limitations of controls 370
ais focus 8.7 Identity fraud 372
ais focus 8.8 Denial-of-service attacks 374
Summary 374
Key terms 376
Discussion questions 376
Self-test activities 377
Problems 377
Self-test answers 388
End notes 388

Part 3 S ystems in action 393
CHAPTER 9 Transaction cycle — the
revenue cycle 397
9.1 Revenue cycle overview and key objectives 398
ais focus 9.1 Simply Energy 400
9.2 Technologies underpinning the revenue cycle 401
ais focus 9.2 Caffe Primo Chain 402
9.3 Data and decisions in the revenue cycle 403
9.4 Revenue cycle documentation 404
9.5 Revenue cycle activities and related risks and controls 410
9.6 Measuring revenue cycle performance 431
Summary 433
Key terms 434
Discussion questions 434
Self-test activities 435
Problems 436
Further reading 442
Self-test answers 442
End notes 442

CHAPTER 10 Transaction cycle — the
expenditure cycle 443
10.1 Expenditure cycle overview and key objectives 444
10.2 Technologies underpinning the expenditure cycle 447
ais focus 10.1 Getting behind the scenes — managing your supply chain 447
10.3 Data and decisions in the expenditure cycle 448
ais focus 10.2 Accounts payable processing at Telstra 450
10.4 Expenditure cycle documentation 451
10.5 Expenditure cycle activities and related
risks and controls 457
10.6 Measuring expenditure cycle performance 480
Summary 481
Key terms 482
Discussion questions 482
Self-test activities 483
Problems 484
Further reading 490
Self-test answers 490
End notes 490

CHAPTER 11 Transaction cycle — the
production cycle 491
11.1 Production cycle overview and key objectives 492
11.2 Technologies underpinning the production cycle 494
ais focus 11.1 Steel-Line Garage Doors — production
line display 495
11.3 Data and decisions in the production cycle 496
ais focus 11.2 Best strategic sustainability outcomes 498
11.4 Production cycle documentation 498
11.5 Production cycle activities and related risks and controls 505
11.6 Measuring production cycle performance 527
Summary 527
Key terms 529
Discussion questions 529
Self-test activities 530
Problems 531
Further reading 537
Self-test answers 537
End notes 537

CHAPTER 12 Transaction cycle — the HR management and payroll cycle 539
12.1 HR management and payroll cycle
overview and key objectives 540
ais focus 12.1 The value of position descriptions 543
12.2 Technologies underpinning the
HR management and payroll cycle 543
12.3 Data and the HR management and payroll cycle 544
ais focus 12.2 Recruitment system case study 545
12.4 HR management and payroll cycle
documentation 546
12.5 HR management and payroll cycle activities,
and the related controls and risks 553
12.6 Measuring HR management and payroll
process performance 570
Summary 570
Key terms 572
Discussion questions 572
Self-test activities 573
Problems 574
Further reading 578
Self-test answers 578

CHAPTER 13 Transaction cycle — the general
ledger and financial reporting cycle 579
13.1 General ledger and financial reporting cycle
overview and key objectives 580
13.2 Technologies underpinning the general ledger
and financial reporting cycle 584
ais focus 13.1 Storm clouds ahead: some pros and cons of data in the cloud 585
13.3 Data and decisions in the general ledger and financial reporting cycle 585
ais focus 13.2 School settled with Greentree for good 587
13.4 General ledger and financial reporting cycle documentation 589
 activities and related risks and controls 596
13.6 Measuring general ledger and financial reporting cycle performance 614
Summary 615
Key terms 617
Discussion questions 617
Self-test activities 618
Problems 619
Further reading 626
Self-test answers 626
End notes 626

Part 4 S ystems issues 627
CHAPTER 14 Systems development 629
14.1 Business size and complexity 630
14.2 Systems development lifecycle 631
ais focus 14.1 Supermarkets changing the way you shop 633
ais focus 14.2 Selecting a vendor based on RFPs 645
14.3 Software selection for SMEs 652
14.4 Alternative systems development approaches 655
14.5 Typical problems of systems development 657
14.6 Systems development management tools 659
ais focus 14.3 An integrated medical record system 663
Summary 666
Key terms 668
Discussion questions 668
Self-test activities 669
Problems 670
Further reading 674
Self-test answers 674
End notes 675

CHAPTER 15 Auditing and governance of
accounting information systems 679
15.1 Importance of the audit function 680
15.2 Internal auditing 681
15.3 External auditing 681
15.4 Audit committees 682
15.5 Influences on the auditor 683
15.6 Financial (statutory) audit 684
15.7 Information systems audit 686
ais focus 15.1 Westpac and cloud computing 688
ais focus 15.2 COBIT and IT governance case studies 690
ais focus 15.3 Protecting customer data 703
Summary 707
Key terms 708
Discussion questions 708
Self-test activities 708
Problems 709
Further reading 713
Self-test answers 713
End notes 713

CHAPTER 16 Ethics and cybercrime 715
16.1 The importance of ethics 716
16.2 Ethical decision making 719
16.3 Ethical issues in AIS 722
ais focus 16.1 Sony data breach 722
ais focus 16.2 RFID: the good, the bad and the ugly 724
16.4 Cybercrime 728
ais focus 16.3 News of the World 730
16.5 Internet fraud and scams 731
16.6 Reducing the risk of cybercrime 733
16.7 Future trends and issues with new technologies 734
Summary 736
Key terms 737
Discussion questions 737
Self-test activities 737
Problems 738
Further reading 739
Self-test answers 740

End notes 740
Glossary 743
Index 751