Review for Midterm ExamAccounting Information Systems

Romney and SteinbartLinda BatchFebruary 2012

Learning Objectives – Course Outline• LO1 - Demonstrate how an Accounting Information System satisfies key

information needs and data quality requirements for each of the five core transactions processing cycles. Ch 1, Week 1 PP deck

• LO – 2 Describe how ERP systems, e-business systems support business strategies for competitive advantage. Ch 2, Week 1 PP deck

• LO – 3 Compare the Semantic Data Modeling approach to other file and database organization methodologies and use it to design a simple Access2007-2010 relational database. Ch 4, Ch 17, MS Access exercises for weeks 1 to week 5, Week 2 PP deck, Week 3 PP deck (REA)

• LO – 4 Compose Data Flow diagrams. Ch 3 Week 2 PP deck,

Learning Objectives – Course Outline• LO – 5 Describe the circumstances and opportunities that give rise to

computer fraud, common computer abuses and their classification, and, methods of detection and prevention. Ch 5, Ch 6, Week 4 and Week 5 PP decks

• LO6 - Outline the elements of an organization’s internal control system and risk management for IS. Ch 7 p. 182 – 192, Ch 4 p. 97 - 104, Week 6 PP deck

LO 1 & LO2• Data vs Information• Value of Information – cost vs. benefit• Characteristics of Useful Information (table 1-1 all)• Business Processes

– Transaction– Transaction processing – give get exchanges (p. 5)– Five Major Business Processes (p. 7)– Common cycle activities (table 1-3) know 5 from each

• Accounting Information Systems– Know the 6 components of an AIS (p.10)– Three important business functions of an AIS (p.10)– How does an AIS add value to an organization (p.11)– How does an AIS improve decision making (p.12)– AIS and corporate strategy (how does an AIS assist with corporate strategy) (p.13)– Role of the AIS in the value chain (p. 13 – 14)

• Know your support activities vs primary activities

LO 1 & LO2• Transaction Processing (p.26 and 27)

– Data Input– Data Processing– Data Storage– Information Output– Common Business Activities and Source Documents (know a few)– Source Data automation– Turnaround documents– Data storage (know what it is but do not go into the Ledgers and Chart of Accounts)– Know what an audit trail is and why it matters (p. 31)– Entity and Attributes (p. 31)– Data processing (creating, reading, updating, deleting) (p. 33)– Information output (documents, reports, queries) (p. 34)

• ERP Systems (p. 36 and 37)– Typical modules (know at least 3)– Advantages (know at least 3)– Disadvantages (know at least 3)

LO4 – Data Flow Diagrams (Ch. 3)

• What is a data flow diagram used for• Key elements of a data flow diagram

– Figure 3 – 1– Context diagram– Level 0 DFD– Know how to categorize entities into a chart showing entities,

processes, data flows and storage and how to convert this into a Level 0 DFD

LO3 – Relational Databases (Ch. 4)• Relational Databases

– Advantages of a database system (p.89)– Importance of good data (p. 89)– Logical and physical views of data (p. 90) (not schemas)– Data dictionary (purpose only)– Types of attributes (primary key, foreign key, other non-key attributes)– Semantic data modeling of transactions (entities, attributes)– Do NOT know normalization for database design (not on test)– Entities (Resource, Event, Agent) Ch 17– Categorize parts of a transaction into a chart identifying resources,

events, and agents– Identify the data cardinalities between each– Know the rules of relating the entities in a REA diagram (week 3 and

week 4 PP decks and ch 17 text book)– Draw a REA diagram including the data cardinalities

LO3 – Relational Databases (Ch. 4)• Relational Databases Continued

LO3 – Relational Databases (Ch. 4)• Microsoft Access Expectations:

– create a new database,– name and save a database (not to your desktop!!!!)– create and name a table– create fields using design view– create a primary key– create a foreign key– create other non-key attributes– populate data using datasheet view– create a combo box– create a yes/no field– create text fields and have the data default to capital letters

and limit the field width– know how to limit the number of decimal places– create a validation rule for data input– establish a one to many relationship between tables– save your database, tables, and relationships

Information will be provided to allow you to do this. You may have to evaluate the validity of the table data you are provided and correct if necessary.

LO5 – Computer Fraud and Fraud and Abuse Techniques (ch 5 and 6)• Threats to accounting information systems (p.122)• What is fraud and what are the five legal requirements for a

fraud to have occurred (p.123, 124)• Types of fraud

– Misappropriation of assets– Fraudulent financial reporting– Which fraud is the biggest risk and why– Who perpetuates fraud and why– The fraud triangle – pressure, opportunity, rationalization

• Employee pressures• Financial statement pressures• Opportunities (commit, conceal, convert to personal gain)• Rationalizations

– What can be done to prevent fraud

LO5 – Computer Fraud and Fraud and Abuse Techniques (ch 5 and 6)• What is computer fraud (p. 130)• Why has computer fraud been allowed to escalate (p. 131)• Computer fraud classifications

– Input fraud, processor fraud, data fraud, computer instruction fraud, and output fraud

• Preventing and detecting fraud (table 5-5)– Reduce the likelihood– Increase the difficulty– Improve detection methods– Reduce fraud losses

• Three classifications of computer fraud (ch 6)– Computer attacks and abuse (give and explain two)– Social Engineering (give and explain two)– Malware (give and explain two)

Do not memorized lists from chapter 6,

just know a few

LO6 – Introduction to ERM and Internal Control (ch 7 and ch4)

• Have not developed the slide deck yet but keep in mind this is pending. Lecture will be next week.

Questions?

• 3 hour exam• Bring your computer• Bring a ethernet cable• Bring and pen, pencil• Give yourself the full 3 hours

– Multiple Choice– True False– Select multiple correct answers– Short Answer– Microsoft Access

• If anyone is entitled to academic accomodations, please let me know today so we can make arrangements.