33:010:458 33:010:458 Accounting Information Accounting - - PowerPoint PPT Presentation

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33:010:458 33:010:458 Accounting Information Accounting - - PowerPoint PPT Presentation

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33:010:458 33:010:458 Accounting Information Accounting Information Systems Systems Dr. Peter R. Gillett Associate Professor Department of Accounting, Business Ethics and Information Systems Rutgers Business SchoolNewark and New

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33:010:458 33:010:458 Accounting Information Accounting Information Systems Systems

  • Dr. Peter R. Gillett

Associate Professor Department of Accounting, Business Ethics and Information Systems Rutgers Business School–Newark and New Brunswick Academic Director Prudential Business Ethics Center at Rutgers

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SLIDE 2

October 22, 2007

  • Dr. Peter R. Gillett

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A.I.S. Class 14: Outline

Identifying Attributes COBIT Learning Objectives for Chapter 3 Chapter 3 Quiz Database Foundations Group Work for Chapter 3 ACCESS Classes Mid-Term Examination Review

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SLIDE 3

October 22, 2007

  • Dr. Peter R. Gillett

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Identifying Attributes

Cash Account

* Cash Account Number * Cash Account Name / Description * Bank Name * Bank Account Number * Balance ? These items are each stored once per record

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SLIDE 4

October 22, 2007

  • Dr. Peter R. Gillett

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Identifying Attributes

Raw Materials Order

* Purchase Order # * Purchase Order Date * Requisition # * Purchase Order Clerk * Vendor # * Target Delivery Date

These items are each stored once per record

* {Raw Materials #, Order Quantity, Order Price} These sets of three items are each stored multiple times per record

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SLIDE 5

October 22, 2007

  • Dr. Peter R. Gillett

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Identifying Attributes

Shipper

* Shipper # * Shipper Name * Shipper Address Line 1 * Shipper Address Line 2 * Shipper City * Shipper State * Shipper Zip * Shipper Telephone Number * Shipper Contact Person Name

These items are each stored once per record – note that there are two distinct address lines, each stored once

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SLIDE 6

October 22, 2007

  • Dr. Peter R. Gillett

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Identifying Attributes

Shipper

* Shipper # * Shipper Name * {Shipper Address Line} * Shipper City * Shipper State * Shipper Zip * Shipper Telephone Number * Shipper Contact Person Name

These items are each stored once per record – except that there may be an unknown number of address lines

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SLIDE 7

October 22, 2007

  • Dr. Peter R. Gillett

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Identifying Attributes

Shipper

* Shipper # * Shipper Name * Shipper Address * Shipper City * Shipper State * Shipper Zip * Shipper Telephone Number * Shipper Contact Person Name

These items are each stored once per record

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SLIDE 8

October 22, 2007

  • Dr. Peter R. Gillett

8

COBIT

Internal Control Frameworks

* SAS 55, 78, 94 – COSO

Internal Control is a process effected by an entity’s board of

directors, and other personnel, that is designed to provide reasonable assurance regarding the achievement of objectives in the following categories: – effectiveness and efficiency of operations – reliability of financial reporting – compliance with applicable laws and regulations * Sarbanes-Oxley Act (SOX) focuses on internal controls over

financial reporting

* COBIT * ISO/IEC 17799:2005 (The Code of Practice for Information

Security Management)

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SLIDE 9

October 22, 2007

  • Dr. Peter R. Gillett

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COBIT

Control OB

OBjectives for Information and related Technology

Information Systems Audit and Control Association Management “best practices” 34 high level control objectives 215 detailed control objectives IT processes in four domains

* Planning & organization * Acquisition & implementation * Delivery & support * Monitoring & evaluation

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SLIDE 10

October 22, 2007

  • Dr. Peter R. Gillett

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COSO / COBIT

COSO

* Effectiveness * Efficiency * Reliability * Compliance

COBIT

* Effectiveness * Efficiency * Confidentiality * Integrity * Availability * Compliance * Reliability

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SLIDE 11

October 22, 2007

  • Dr. Peter R. Gillett

11

COBIT 4.1 – May 2007

The complete COBIT package is a set

consisting of six publications:

* Executive Summary * Framework * Control Objectives * IT Assurance Guide (formerly Audit

Guidelines)

* Implementation Tool Set * Management Guidelines

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SLIDE 12

October 22, 2007

  • Dr. Peter R. Gillett

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COBIT – High level Control Objectives

Plan and Organize

* PO1 Define a Strategic IT Plan and direction * PO2 Define the Information Architecture * PO3 Determine Technological Direction * PO4 Define the IT Processes, Organization and Relationships * PO5 Manage the IT Investment * PO6 Communicate Management Aims and Direction * PO7 Manage IT Human Resources * PO8 Manage Quality * PO9 Assess and Manage IT Risks * PO10 Manage Projects

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SLIDE 13

October 22, 2007

  • Dr. Peter R. Gillett

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COBIT – High level Control Objectives

Acquire and Implement

* AI1 Identify Automated Solutions * AI2 Acquire and Maintain Application Software * AI3 Acquire and Maintain Technology Infrastructure * AI4 Enable Operation and Use * AI5 Procure IT Resources * AI6 Manage Changes * AI7 Install and Accredit Solutions and Changes

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SLIDE 14

October 22, 2007

  • Dr. Peter R. Gillett

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COBIT – High level Control Objectives

Deliver and Support

* DS1 Define and Manage Service Levels * DS2 Manage Third-party Services * DS3 Manage Performance and Capacity * DS4 Ensure Continuous Service * DS5 Ensure Systems Security * DS6 Identify and Allocate Costs * DS7 Educate and Train Users * DS8 Manage Service Desk and Incidents * DS9 Manage the Configuration * DS10 Manage Problems * DS11 Manage Data * DS12 Manage the Physical Environment * DS13 Manage Operations

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SLIDE 15

October 22, 2007

  • Dr. Peter R. Gillett

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COBIT – High level Control Objectives

Monitor and Evaluate

* ME1 Monitor and Evaluate IT Performance * ME2 Monitor and Evaluate Internal Control * ME3 Ensure Compliance with External Requirements * ME4 Provide IT Governance

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SLIDE 16

October 22, 2007

  • Dr. Peter R. Gillett

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Learning Objectives for Chapter 3

Important topics covered include:

* Differences between double-entry bookkeeping and

database accounting systems

* Advantages and disadvantages of database

accounting systems

* Business activity classifications * Transaction cycles * The relationship between accounting systems and

database systems

* A brief history leading to the development of

database management systems (DBMS’s)

* Functions of database management systems

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SLIDE 17

October 22, 2007

  • Dr. Peter R. Gillett

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Learning Objectives for Chapter 3

Important topics covered include:

* Theory and application of relational database

management systems (RDBMS’s)

* The structure of database objects to capture

accounting events

* The importance of normalizing tables * Performing database selections, projections, and joins * How accountants use the REA model when designing

accounting databases

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SLIDE 18

October 22, 2007

  • Dr. Peter R. Gillett

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Chapter 3 Quiz

?

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SLIDE 19

October 22, 2007

  • Dr. Peter R. Gillett

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Accounting Databases in Transaction Cycles

Advantages of Database Accounting Systems

* Reduce data storage costs * Eliminate data redundancy * Eliminate data inconsistencies * Avoid duplicate processing * Facilitate add, delete, and update maintenance tasks * Make data independent of applications * Centralize data management * Centralize data security

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SLIDE 20

October 22, 2007

  • Dr. Peter R. Gillett

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Accounting Databases in Transaction Cycles

Advantages of Database Accounting Systems

* Make report modifications and updates easier * Provide ad hoc query capabilities * Facilitate cross-functional data analysis * Permit multiple users simultaneous data access

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SLIDE 21

October 22, 2007

  • Dr. Peter R. Gillett

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Accounting Databases in Transaction Cycles

Disadvantages of Database Accounting Systems

* Greater hardware requirements * Database software itself * Employing a database administrator * System operation becomes critical * Incorrect data entry corrupts many users’ work * Territorial disputes over data ownership

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SLIDE 22

October 22, 2007

  • Dr. Peter R. Gillett

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Accounting Databases in Transaction Cycles

Service Firms

* Income and expenses

Merchandising Firms

* Income, cost of goods sold, and expenses

Manufacturing Firms

* Income, cost of goods sold, cost of goods

manufactured, and expenses

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SLIDE 23

October 22, 2007

  • Dr. Peter R. Gillett

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Transaction Cycles Revenue

* Events

Customer orders Sales Customer payments

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SLIDE 24

October 22, 2007

  • Dr. Peter R. Gillett

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Transaction Cycles Revenue

* Reports

Sales orders Invoices Shipping documents Remittance advices Cash receipts summaries Sales analyses Balances owed by customers

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SLIDE 25

October 22, 2007

  • Dr. Peter R. Gillett

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Transaction Cycles Revenue

* Tables

Cash receipt Customer Finished goods inventory Sales Sales order Salesperson

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SLIDE 26

October 22, 2007

  • Dr. Peter R. Gillett

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Transaction Cycles Purchase

* Events

Purchase orders Receipt of goods ordered Payments to vendors

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SLIDE 27

October 22, 2007

  • Dr. Peter R. Gillett

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Transaction Cycles Purchase

* Reports

Backorder reports Balances owed to vendors Checks Goods received summaries Purchase orders Purchase summaries Receiving reports

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SLIDE 28

October 22, 2007

  • Dr. Peter R. Gillett

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Transaction Cycles Purchase

* Tables

Cash disbursement Purchase orders Raw materials inventory Raw materials inventory receipt Vendor

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SLIDE 29

October 22, 2007

  • Dr. Peter R. Gillett

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Transaction Cycles Payroll

* Events

Employees earn pay Payment to employees Payment of payroll taxes, etc

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SLIDE 30

October 22, 2007

  • Dr. Peter R. Gillett

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Transaction Cycles Payroll

* Reports

Checks Employee commission reports Employee earnings records Employee time reports Payroll registers

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SLIDE 31

October 22, 2007

  • Dr. Peter R. Gillett

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Transaction Cycles Payroll

* Tables

Cash disbursement Employee Time worked

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SLIDE 32

October 22, 2007

  • Dr. Peter R. Gillett

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Transaction Cycles Production

* Events

Materials inventory costs flow into production Labor costs flow into production Overhead costs flow into production Total production costs flow into finished goods

inventory

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SLIDE 33

October 22, 2007

  • Dr. Peter R. Gillett

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Transaction Cycles Production

* Reports

Bills of materials Job cost reports

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SLIDE 34

October 22, 2007

  • Dr. Peter R. Gillett

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Transaction Cycles Production

* Tables

Finished goods inventory Job Raw materials inventory Time worked

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SLIDE 35

October 22, 2007

  • Dr. Peter R. Gillett

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Database Foundations

Functions of a DBMS

* Efficient data maintenance * User-accessible catalog

the data dictionary is itself a database file accessible by the user

* Concurrency control

proper lock-out of multiple users

* Transaction support

an entire transaction is processed, or none of it is (in the event of a

system failure)

* Recovery services * Security and authorization services * Integrity facilities

conditions or restrictions on valid data in database

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SLIDE 36

October 22, 2007

  • Dr. Peter R. Gillett

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Database Foundations Terminology

* Relation, tuple, attribute * Table, row, column * File, record, field

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SLIDE 37

October 22, 2007

  • Dr. Peter R. Gillett

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Database Foundations Other main topics already covered

* Historical v. Modern information systems * Advantages and disadvantages of DBMS * RDBMS terminology * Database Normalization * Entity-Relationship Models

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SLIDE 38

October 22, 2007

  • Dr. Peter R. Gillett

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Database Foundations SQL

* Select

Determines which rows are included in dyansets

* Project

Determines which columns are included in dynasets

* Join

Combines data from different tables

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SLIDE 39

October 22, 2007

  • Dr. Peter R. Gillett

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Database Foundations Equijoins (p. 144) Outer Joins (p. 144) Recursive relations (p. 150)

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SLIDE 40

October 22, 2007

  • Dr. Peter R. Gillett

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Group Work for Chapter 3 Discussion Questions 1, 2

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SLIDE 41

October 22, 2007

  • Dr. Peter R. Gillett

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ACCESS Classes

The next three classes, on October 24, 29 & 31,

will all be held in Levin Lab 003

From now on, there is no purpose in reading

the ACCESS textbook by itself – it is vital you read at the computer, and follow the exercises with the keystrokes given

If you have not done this, you will find the Lab

classes a waste of your time, and may wish to consider how best to use your limited time . . .

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SLIDE 42

October 22, 2007

  • Dr. Peter R. Gillett

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Mid-Term Examination Review