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Accounting Information Systems: Controls and Processes
by
Turner, Leslie; Weickgenannt, Andrea
Publisher: John Wiley & Sons
Publishing Date: 2008/04/04
eText ISBN-10
0-470-37216-8
eText ISBN-13
978-0-470-37216-6
Print ISBN-10
0-471-47951-9
Print ISBN-13
978-0-471-47951-2
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Accounting Information Systems: Controls and Processes
by
Turner, Leslie; Weickgenannt, Andrea
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Copyright, ii
About the Authors, iii
Preface, v
Module 1. INTRODUCTION: D...
Module 2. CONTROL ENVIRON...
Module 3. BUSINESS PROCES...
Module 4. IT INFRASTRUCTU...
Index, 629
Table of Contents
Copyright, ii
About the Authors, iii
Preface, v
Module 1. INTRODUCTION: Defines business processes, AIS, and all foundational concepts. This module provides the knowledge building blocks to support the remaining chapters, 1
Chapter 1. Introduction to AIS, 1
Overview of Business Processes, 2
Overview of an Accounting Information System, 4
Business Process Linkage Throughout the Supply Chain, 6
IT Enablement of Business Processes, 8
Basic Computer and IT Concepts, 10
BASIC COMPUTER DATA STRUCTURES, 11
FILE ACCESS AND PROCESSING MODES, 12
DATA WAREHOUSE AND DATA MINING, 13
NETWORKS AND THE INTERNET, 14
Examples of IT Enablement, 15
E-BUSINESS, 15
ELECTRONIC DATA INTERCHANGE, 15
POINT OF SALE SYSTEM, 15
AUTOMATED MATCHING, 16
EVALUATED RECEIPT SETTLEMENT, 16
E-PAYABLES AND ELECTRONIC INVOICE PRESENTMENT AND PAYMENT, 16
ENTERPRISE RESOURCE PLANNING SYSTEMS, 16
The Internal Control Structure of Organizations, 17
ENTERPRISE RISK MANAGEMENT, 18
A CODE OF ETHICS, 20
COSO ACCOUNTING INTERNAL CONTROL STRUCTURE, 20
IT CONTROLS, 20
CORPORATE GOVERNANCE, 20
IT GOVERNANCE, 21
The Importance of Accounting Information Systems to Accountants, 22
USERS OF THE AIS, 22
DESIGN OR IMPLEMENTATION TEAM, 22
AN AUDITOR OF THE AIS, 22
The Relation of Ethics to Accounting Information Systems, 22
Summary of Study Objectives, 24
Key Terms, 25
End of Chapter Material, 26
CONCEPT CHECK, 26
DISCUSSION QUESTIONS, 27
BRIEF EXERCISES, 28
PROBLEMS, 29
CASES, 31
CONTINUING CASE: SPATELLI’S PIZZERIA, 32
SOLUTIONS TO CONCEPT CHECK, 37
Chapter 2. Foundational Concepts of the AIS, 39
Interrelationships of Business Processes and the AIS, 41
Types of Accounting Information Systems, 43
MANUAL SYSTEMS, 43
LEGACY SYSTEMS, 44
MODERN, INTEGRATED SYSTEMS, 47
Accounting Software Market Segments, 48
Input Methods Used in Business Processes, 50
SOURCE DOCUMENTS AND KEYING, 50
BAR CODES, 50
POINT OF SALE SYSTEMS, 51
ELECTRONIC DATA INTERCHANGE, 52
E-BUSINESS AND E-COMMERCE, 52
Processing Accounting Data, 52
BATCH PROCESSING, 53
ONLINE AND REAL-TIME PROCESSING, 54
Outputs from the AIS Related to Business Processes, 55
Documenting Processes and Systems, 55
PROCESS MAPS, 56
SYSTEM FLOWCHARTS, 57
DOCUMENT FLOWCHARTS, 59
DATA FLOW DIAGRAMS, 60
ENTITY RELATIONSHIP DIAGRAMS, 62
Client-Server Computing, 63
Ethical Considerations at the Foundation of Accounting Information Systems, 65
Summary of Study Objectives, 66
Key Terms, 67
Appendix: Resources Events Agents (REA) in Accounting Information Systems, 67
End of Chapter Material, 69
CONCEPT CHECK, 69
DISCUSSION QUESTIONS%, 71
BRIEF EXERCISES, 72
PROBLEMS, 73
CASES, 74
CONTINUING CASE: SPATELLI’S PIZZERIA, 75
SOLUTIONS TO CONCEPT CHECK, 75
Module 2. CONTROL ENVIRONMENT: Describes the proper control environment to oversee and control processes, 77
Chapter 3. Fraud, Ethics, and Internal Control, 77
Introduction to the Need for a Code of Ethics and Internal Controls, 78
Accounting Related Fraud, 80
CATEGORIES OF ACCOUNTING-RELATED FRAUD, 82
The Nature of Management Fraud, 82
The Nature of Employee Fraud, 84
The Nature of Customer Fraud, 86
The Nature of Vendor Fraud, 86
The Nature of Computer Fraud, 86
INTERNAL SOURCES OF COMPUTER FRAUD, 87
EXTERNAL SOURCES OF COMPUTER FRAUD, 87
Policies to Assist in the Avoidance of Fraud and Errors, 89
Maintenance of a Code Of Ethics, 89
Maintenance of Accounting Internal Controls, 90
THE DETAILS OF THE COSO REPORT, 92
REASONABLE ASSURANCE OF INTERNAL CONTROLS, 100
Maintenance of Information Technology Controls, 101
Summary of Study Objectives, 103
Key Terms, 105
Appendix A: Recent History of Internal Control Standards, 105
Appendix B: Control Objectives for Information Technology (COBIT), 106
End of Chapter Material, 108
CONCEPT CHECK, 108
DISCUSSION QUESTIONS, 110
BRIEF EXERCISES, 111
PROBLEMS, 111
CASES, 113
CONTINUING CASE: SPATELLI’S PIZZERIA, 116
SOLUTIONS TO CONCEPT CHECK, 116
Chapter 4. Internal Controls and Risks in IT Systems, 119
An Overview of Internal Controls for IT Systems, 120
General Controls for IT Systems, 122
AUTHENTICATION OF USERS AND LIMITING UNAUTHORIZED USERS, 123
HACKING AND OTHER NETWORK BREAK-INS, 125
ORGANIZATIONAL STRUCTURE, 128
PHYSICAL ENVIRONMENT AND SECURITY, 129
BUSINESS CONTINUITY, 131
General Controls from an AICPA Trust Services Principles Perspective, 132
RISKS IN NOT LIMITING UNAUTHORIZED USERS, 133
RISKS FROM HACKING OR OTHER NETWORK BREAK-INS, 136
RISKS FROM ENVIRONMENTAL FACTORS, 136
PHYSICAL ACCESS RISKS, 137
BUSINESS CONTINUITY RISKS, 137
Hardware and Software Exposures in IT Systems, 137
THE OPERATING SYSTEM, 139
THE DATABASE, 141
THE DATABASE MANAGEMENT SYSTEM, 142
LANS AND WANS, 143
WIRELESS NETWORKS, 143
THE INTERNET AND WORLD WIDE WEB, 144
TELECOMMUTING WORKERS, 144
ELECTRONIC DATA INTERCHANGE, 145
Application Software and Application Controls, 145
INPUT CONTROLS, 146
PROCESSING CONTROLS, 152
OUTPUT CONTROLS, 153
Ethical Issues in IT Systems, 154
Summary of Study Objectives, 155
Key Terms, 156
End of Chapter Material, 157
CONCEPT CHECK, 157
DISCUSSION QUESTIONS, 159
BRIEF EXERCISES, 160
PROBLEMS, 161
CASES, 163
CONTINUING CASE: SPATELLI’S PIZZERIA, 164
SOLUTIONS TO CONCEPT CHECK, 164
Chapter 5. Corporate Governance and the Sarbanes-Oxley Act, 169
An Overview of Corporate Governance, 170
Participants in the Corporate Governance Process, 171
Functions within the Corporate Governance Process, 175
MANAGEMENT OVERSIGHT, 175
INTERNAL CONTROLS AND COMPLIANCE, 176
FINANCIAL STEWARDSHIP, 178
ETHICAL CONDUCT, 179
The History of Corporate Governance, 179
The Sarbanes–Oxley Act of 2002, 180
The Impact of the Sarbanes–Oxley Act on Corporate Governance, 186
The Importance of Corporate Governance in the Study of Accounting Information Systems, 189
Ethics and Corporate Governance, 190
Summary of Study Objectives, 192
Key Terms, 193
End of Chapter Material, 194
CONCEPT CHECK, 194
DISCUSSION QUESTIONS, 196
BRIEF EXERCISES, 197
PROBLEMS, 197
CASES, 198
CONTINUING CASE: SPATELLI’S PIZZERIA, 198
SOLUTIONS TO CONCEPT CHECK, 198
Chapter 6. IT Governance, 201
Introduction to IT Governance, 202
An Overview of the SDLC, 206
Elements of the Systems Planning Phase of the SDLC, 209
THE MATCH OF IT SYSTEMS TO STRATEGIC OBJECTIVES, 210
FEASIBILITY STUDY, 211
PLANNING AND OVERSIGHT OF THE PROPOSED CHANGES, 212
Elements of the Systems Analysis Phase of the SDLC, 212
SYSTEM SURVEY: THE STUDY OF THE CURRENT SYSTEM, 213
DETERMINATION OF USER REQUIREMENTS, 214
ANALYSIS OF THE SYSTEM SURVEY, 215
Elements of the Systems Design Phase of the SDLC, 216
IN-HOUSE DESIGN, 218
CONCEPTUAL DESIGN, 219
EVALUATION AND SELECTION, 220
DETAILED DESIGN, 222
Elements of the Systems Implementation Phase of the SDLC, 224
SOFTWARE PROGRAMMING, 224
TRAINING EMPLOYEES, 224
SOFTWARE TESTING, 224
DOCUMENTING THE SYSTEM, 225
DATA CONVERSION, 226
SYSTEM CONVERSION, 226
USER ACCEPTANCE, 227
POST-IMPLEMENTATION REVIEW, 227
Elements of the Operation and Maintenance Phase of the SDLC, 227
The Critical Importance of IT Governance in an Organization, 228
SDLC AS PART OF STRATEGIC MANAGEMENT, 228
SDLC AS AN INTERNAL CONTROL, 228
Ethical Considerations Related to IT Governance, 230
ETHICAL CONSIDERATIONS FOR MANAGEMENT, 230
ETHICAL CONSIDERATIONS FOR EMPLOYEES, 230
ETHICAL CONSIDERATIONS FOR CONSULTANTS, 231
Summary of Study Objectives, 232
Key Terms, 233
End of Chapter Material, 234
CONCEPT CHECK, 234
DISCUSSION QUESTIONS, 236
BRIEF EXERCISES, 236
PROBLEMS, 237
CASES, 238
CONTINUING CASE: SPATELLI’S PIZZERIA, 239
SOLUTIONS TO CONCEPT CHECK, 239
Chapter 7. Auditing Information Technology-Based Processes, 241
Introduction to Auditing IT Processes, 242
Types of Audits and Auditors, 242
Information Risk and IT-Enhanced Internal Control, 244
Authoritative Literature Used in Auditing, 245
Management Assertions and Audit Objectives, 246
Phases of an IT Audit, 248
Audit Planning, 249
Use of Computers in Audits, 251
Tests of Controls, 252
General Controls, 253
Application Controls, 256
Tests of Transactions and Tests of Balances, 260
Audit Completion/Reporting, 262
Other Audit Considerations, 263
DIFFERENT IT ENVIRONMENTS, 263
CHANGES IN A CLIENT’S IT ENVIRONMENT, 265
SAMPLING, 266
Ethical Issues Related to Auditing, 266
Summary of Study Objectives, 270
Key Terms, 271
End of Chapter Material, 272
CONCEPT CHECK, 272
DISCUSSION QUESTIONS, 275
BRIEF EXERCISES, 276
PROBLEMS, 277
CASES, 278
CONTINUING CASE: SPATELLI’S PIZZERIA, 279
SOLUTIONS TO CONCEPT CHECK, 279
Module 3. BUSINESS PROCESSES: The sets of business processes and the internal controls in organizations. With process maps, document flowcharts, and data flow diagrams, the core business processes are described and the necessary controls to manage risk are discussed, 283
Chapter 8. Revenue and Cash Collection Processes and Controls, 283
Introduction to Revenue Processes, 284
Sales Processes, 287
Risks and Controls in Sales Processes, 292
AUTHORIZATION OF TRANSACTIONS, 293
SEGREGATION OF DUTIES, 293
ADEQUATE RECORDS AND DOCUMENTS, 293
SECURITY OF ASSETS AND DOCUMENTS, 294
INDEPENDENT CHECKS AND RECONCILIATIONS, 294
COST–BENEFIT CONSIDERATIONS, 294
Sales Return Processes, 296
Risks and Controls in Sales Return Processes, 296
AUTHORIZATION OF TRANSACTIONS, 296
SEGREGATION OF DUTIES, 296
ADEQUATE RECORDS AND DOCUMENTS, 299
SECURITY OF ASSETS AND DOCUMENTS, 300
INDEPENDENT CHECKS AND RECONCILIATION, 300
COST–BENEFIT CONSIDERATIONS, 300
Cash Collection Processes, 302
Risks and Controls in Cash Collection Processes, 302
AUTHORIZATION OF TRANSACTIONS, 302
SEGREGATION OF DUTIES, 305
ADEQUATE RECORDS AND DOCUMENTS, 306
SECURITY OF ASSETS AND DOCUMENTS, 306
INDEPENDENT CHECKS AND RECONCILIATIONS, 307
COST–BENEFIT CONSIDERATIONS, 307
IT Enabled Systems of Revenue and Cash Collection Processes, 309
E-Business Systems and the Related Risks and Controls, 311
SECURITY AND CONFIDENTIALITY RISKS, 313
PROCESSING INTEGRITY RISKS, 313
AVAILABILITY RISKS, 314
Electronic Data Interchange (EDI) Systems and the Risks and Controls, 315
Point of Sale (POS) Systems and the Related Risks and Controls, 319
Ethical Issues Related to Revenue Processes, 320
Corporate Governance in Revenue Processes, 323
Summary of Study Objectives, 324
Key Terms, 325
End of Chapter Material, 326
CONCEPT CHECK, 326
DISCUSSION QUESTIONS, 329
BRIEF EXERCISES, 329
PROBLEMS, 330
CASES, 337
CONTINUING CASE: SPATELLI’S PIZZERIA, 343
SOLUTIONS TO CONCEPT CHECK, 344
Chapter 9. Expenditures Processes and Controls—Purchases, 347
Introduction to Expenditures Processes, 348
Purchasing Processes, 351
Risks and Controls in the Purchasing Process, 357
AUTHORIZATION OF TRANSACTIONS, 357
SEGREGATION OF DUTIES, 357
ADEQUATE RECORDS AND DOCUMENTS, 358
SECURITY OF ASSETS AND DOCUMENTS, 358
INDEPENDENT CHECKS AND RECONCILIATION, 358
COST–BENEFIT CONSIDERATIONS, 359
Purchase Return Process, 360
Risks and Controls in the Purchase Return Processes, 365
AUTHORIZATION OF TRANSACTIONS, 365
SEGREGATION OF DUTIES, 365
ADEQUATE RECORDS AND DOCUMENTS, 365
SECURITY OF ASSETS AND DOCUMENTS, 365
INDEPENDENT CHECKS AND RECONCILIATION, 365
COST–BENEFIT CONSIDERATIONS, 366
Cash Disbursement Processes, 367
Risks and Controls in the Cash Disbursement Processes, 372
AUTHORIZATION OF TRANSACTIONS, 372
SEGREGATION OF DUTIES, 373
ADEQUATE RECORDS AND DOCUMENTS, 373
SECURITY OF ASSETS AND DOCUMENTS, 373
INDEPENDENT CHECKS AND RECONCILIATIONS, 374
COST–BENEFIT CONSIDERATIONS, 374
IT Systems of Expenditures and Cash Disbursement Processes, 375
Computer-Based Matching, 377
Risks and Controls in Computer-Based Matching, 379
SECURITY AND CONFIDENTIALITY RISKS, 379
PROCESSING INTEGRITY RISKS, 379
Evaluated Receipt Settlement, 380
Risks and Controls in Evaluated Receipt Settlement, 381
SECURITY AND CONFIDENTIALITY, 382
PROCESSING INTEGRITY, 382
AVAILABILITY, 382
E-Business and Electronic Data Interchange (EDI), 382
Risks and Controls in E-Business and EDI, 383
SECURITY AND CONFIDENTIALITY, 383
PROCESSING INTEGRITY, 384
AVAILABILITY, 384
E-Payables, 385
Procurement Cards, 386
Ethical Issues Related to Expenditures Processes, 386
Corporate Governance in Expenditure Processes, 388
Summary of Study Objectives, 389
Key Terms, 391
End of Chapter Material, 391
CONCEPT CHECK, 391
DISCUSSION QUESTIONS, 394
BRIEF EXERCISES, 395
PROBLEMS, 396
CASES, 399
CONTINUING CASE: SPATELLI’S PIZZERIA, 404
SOLUTIONS TO CONCEPT CHECK, 405
Chapter 10. Expenditures Processes and Controls—Payroll and Fixed Assets, 409
Introduction to Payroll and Fixed Asset Processes, 410
Payroll Processes, 412
Risks and Controls in the Payroll Processes, 420
AUTHORIZATION OF TRANSACTIONS, 421
SEGREGATION OF DUTIES, 421
ADEQUATE RECORDS AND DOCUMENTS, 422
SECURITY OF ASSETS AND DOCUMENTS, 422
INDEPENDENT CHECKS AND RECONCILIATIONS, 422
COST–BENEFIT CONSIDERATIONS, 423
IT Systems of Payroll Processes, 424
Fixed Asset Processes, 426
FIXED ASSETS ACQUISITION, 426
FIXED ASSETS CONTINUANCE, 430
FIXED ASSETS DISPOSALS, 431
Risks and Controls in Fixed Asset Processes, 434
AUTHORIZATION OF TRANSACTIONS, 434
SEGREGATION OF DUTIES, 435
ADEQUATE RECORDS AND DOCUMENTS, 435
SECURITY OF ASSETS AND DOCUMENTS, 435
INDEPENDENT CHECKS AND RECONCILIATIONS, 435
COST–BENEFIT CONSIDERATIONS, 437
IT Systems of Fixed Asset Processes, 437
Ethical Issues Related to Payroll and Fixed Assets Processes, 438
Corporate Governance in Payroll and Fixed Assets Processes, 441
Summary of Study Objectives, 442
Key Terms, 444
End of Chapter Material, 444
CONCEPT CHECK, 444
DISCUSSION QUESTIONS, 447
BRIEF EXERCISES, 448
PROBLEMS, 448
CASES, 450
CONTINUING CASE: SPATELLI’S PIZZERIA, 453
SOLUTIONS TO CONCEPT CHECK, 455
Chapter 11. Conversion Processes and Controls, 457
Basic Features of Conversion Processes, 458
Components of the Logistics Function, 460
PLANNING, 460
RESOURCE MANAGEMENT, 463
OPERATIONS, 465
Cost Accounting Reports Generated by Conversion Processes, 469
Risks and Controls in Conversion Processes, 470
AUTHORIZATION OF TRANSACTIONS, 470
SEGREGATION OF DUTIES, 470
ADEQUATE RECORDS AND DOCUMENTS, 471
SECURITY OF ASSETS AND DOCUMENTS, 471
INDEPENDENT CHECKS AND RECONCILIATIONS, 471
COST–BENEFIT CONSIDERATIONS, 472
IT Systems of Conversion Processes, 473
Ethical Issues Related to Conversion Processes, 476
Corporate Governance in Conversion Processes, 477
Summary of Study Objectives, 478
Key Terms, 479
End of Chapter Material, 480
CONCEPT CHECK, 480
DISCUSSION QUESTIONS, 482
BRIEF EXERCISES, 483
PROBLEMS, 484
CASES, 485
CONTINUING CASE: SPATELLI’S PIZZERIA, 489
SOLUTIONS TO CONCEPT CHECK, 490
Chapter 12. Administrative Processes and Controls, 493
Introduction to Administrative Processes, 495
Source of Capital Processes, 497
Investment Processes, 498
Risks and Controls in Capital and Investment Processes, 500
General Ledger Processes, 501
Risks and Controls in General Ledger Processes, 504
AUTHORIZATION OF TRANSACTIONS, 504
SEGREGATION OF DUTIES, 506
ADEQUATE RECORDS AND DOCUMENTS, 509
SECURITY OF THE GENERAL LEDGER AND DOCUMENTS, 509
INDEPENDENT CHECKS AND RECONCILIATIONS, 509
Reporting as an Output of the General Ledger Processes, 510
EXTERNAL REPORTING, 511
INTERNAL REPORTING, 511
Ethical Issues Related to Administrative Processes and Reporting, 513
UNETHICAL MANAGEMENT BEHAVIOR IN CAPITAL SOURCES AND INVESTING, 513
INTERNAL REPORTING ETHICAL ISSUES, 514
Corporate Governance in Administrative Processes and Reporting, 515
Summary of Study Objectives, 516
Key Terms, 517
End of Chapter Material, 517
CONCEPT CHECK, 517
DISCUSSION QUESTIONS, 519
BRIEF EXERCISES, 520
PROBLEMS, 521
CASE, 522
CONTINUING CASE: SPATELLI’S PIZZERIA, 522
SOLUTIONS TO CONCEPT CHECK, 522
Module 4. IT INFRASTRUCTURE TO ENABLE PROCESSES: The hardware, software, and systems that support business processes, 525
Chapter 13. Data and Databases, 525
The Need for Data Collection and Storage, 526
Storing and Accessing Data, 527
DATA STORAGE TERMINOLOGY, 528
DATA STORAGE MEDIA, 529
Data Processing Techniques, 529
Databases, 531
THE HISTORY OF DATABASES, 532
The Need for Normalized Data, 535
TRADE-OFFS IN DATABASE STORAGE, 537
Use of a Data Warehouse to Analyze Data, 538
BUILD THE DATA WAREHOUSE, 539
IDENTIFY THE DATA, 539
STANDARDIZE THE DATA, 539
CLEANSE, OR SCRUB, THE DATA, 540
UPLOAD THE DATA, 540
Data Analysis Tools, 540
DATA MINING, 541
OLAP, 542
Distributed Data Processing, 542
DDP AND DDB, 543
CLIENT/SERVER SYSTEMS, 544
IT Controls for Data and Databases, 545
Ethical Issues Related to Data Collection and Storage, 546
ETHICAL RESPONSIBILITIES OF THE COMPANY, 546
ETHICAL RESPONSIBILITIES OF EMPLOYEES, 548
ETHICAL RESPONSIBILITIES OF CUSTOMERS, 548
Summary of Study Objectives, 549
Key Terms, 551
End of Chapter Material, 551
CONCEPT CHECK, 551
DISCUSSION QUESTIONS%, 553
BRIEF EXERCISES, 554
PROBLEMS, 555
CASES, 556
CONTINUING CASE: SPATELLI’S PIZZERIA, 557
SOLUTIONS TO CONCEPT CHECK, 557
Chapter 14. E-Commerce and E-Business, 559
Introduction to E-Commerce and E-Business, 560
The History of the Internet, 562
The Physical Structure and Standards of the Internet, 565
THE NETWORK, 565
THE COMMON STANDARDS OF THE INTERNET, 566
E-Commerce and Its Benefits, 569
BENEFITS AND DISADVANTAGES OF E-COMMERCE FOR THE CUSTOMER, 569
BENEFITS AND DISADVANTAGES OF E-COMMERCE FOR THE BUSINESS, 570
THE COMBINATION OF E-COMMERCE AND TRADITIONAL COMMERCE, 571
Privacy Expectations in E-Commerce, 572
E-Business and IT Enablement, 574
B2B: A PART OF E-BUSINESS, 576
E-BUSINESS ENABLEMENT EXAMPLES, 578
Intranets and Extranets to Enable E-Business, 580
Internal Controls for the Internet, Intranets, and Extranets, 581
XML and XBRL as Tools to Enable E-Business, 583
XML IN INTERNET EDI, 583
XBRL FOR FINANCIAL STATEMENT REPORTING, 585
Ethical Issues Related to E-Business and E-Commerce, 586
Summary of Study Objectives, 588
Key Terms, 589
End of Chapter Material, 590
CONCEPT CHECK, 590
DISCUSSION QUESTIONS%, 591
BRIEF EXERCISES, 593
PROBLEMS, 593
CASES, 594
CONTINUING CASE: SPATELLI’S PIZZERIA, 595
SOLUTIONS TO CONCEPT CHECK, 595
Chapter 15. IT Infrastructure for E-Business, 597
Overview of ERP Systems, 598
History of ERP Systems, 601
Current ERP System Characteristics, 603
ERP Modules, 605
FINANCIALS, 605
HUMAN RESOURCES, 606
PROCUREMENT AND LOGISTICS, 606
PRODUCT DEVELOPMENT AND MANUFACTURING, 606
SALES AND SERVICES, 606
ANALYTICS, 606
SUPPLY CHAIN MANAGEMENT, 607
CUSTOMER RELATIONSHIP MANAGEMENT, 607
Market Segments of ERP Systems, 607
TIER ONE SOFTWARE, 608
TIER TWO SOFTWARE, 609
Implementation of ERP Systems, 609
HIRING A CONSULTING FIRM, 609
THE BEST FIT ERP SYSTEM, 610
WHICH MODULES TO IMPLEMENT, 610
BEST OF BREED VERSUS ERP MODULES, 610
BUSINESS PROCESS REENGINEERING, 611
CUSTOMIZATION OF THE ERP SYSTEM, 612
THE COSTS OF HARDWARE AND SOFTWARE, 612
TESTING OF THE ERP SYSTEM, 612
DATA CONVERSION, 612
TRAINING OF EMPLOYEES, 613
THE METHODS OF CONVERSION TO THE ERP SYSTEM, 613
Benefits and Risks of ERP Systems, 615
BENEFITS OF ERP SYSTEMS, 615
RISKS OF ERP SYSTEMS, 617
ERP Systems and the Sarbanes-Oxley Act, 618
Summary of Study Objectives, 619
Key Terms, 621
End of Chapter Material, 621
CONCEPT CHECK, 621
DISCUSSION QUESTIONS, 623
BRIEF EXERCISES, 624
PROBLEMS, 624
CASES, 625
CONTINUING CASE: SPATELLI’S PIZZERIA, 626
SOLUTIONS TO CONCEPT CHECK, 626
Index, 629
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