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Chapter 1--Introduction
This chapter begins with a discussion of the fundamental purpose of accounting. The traditional view of accounting and the double-entry model of accounting is contrasted with a more modern view of accounting called the “database approach” to accounting. The information customers served by accounting are presented, and the diversity in their information needs was discussed. The traditional accounting model is then presented, and the problems with traditional manual accounting are noted. The narrow, financial data focus of traditional accounting is noted as one of the impediments to allowing the accounting information system to serve the needs of non-accountants. Information customers are demanding real-time reports while still requiring assurance about the reliability of information. Computerized bookkeeping, made possible by accounting software packages or custom-developed COBOL programs, resulted simply in the automation of traditional manual accounting. In contrast, the database approach results in the development of an integrated enterprise database system which meets the information needs of all users. Financial and non-financial data is stored at the most disaggregated level. Real-time reporting and flexible views of the database are easily supported. The various roles that future accounting professionals can play are discussed. Accountants can either serve as information professionals within an organization, as auditors capable of dealing with database-oriented information systems, or as consultants involved in the design and development of information systems to a wide-ranging clientele. The chapter concludes with an overview of the remainder of the book.
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Chapter 2--Elements of information systems
This chapter begins by drawing a distinction between data and information. Data are unprocessed facts, whereas information represents data made meaningful through processing. The hierarchy of data from bits and bytes to files and databases was then presented. Alternative field formats such as text, numeric, and currency are discussed. Various record keys such as primary and secondary keys are then described. Coding systems including sequence, block, and group codes are explained. Mnemonic codes, which make codes suggestive of the item being coded, are also discussed. The various file types such as transaction, master, reference, history, and backup files are then described. The data processing cycle is then presented. The five steps in the data processing cycle are data input, data preparation, data processing, file maintenance, and information output. Alternative data input options such as batch and online are described. File organization and access methods are then discussed. The two primary file update options—batch versus online—are then compared and contrasted in terms of their relative advantages and disadvantages. The chapter concludes with a discussion of the systems approach which involves taking a holistic view of information systems such that it is seen as much more than just the sum of its parts.
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Chapter 3--Technology...hardware and software
This chapter focuses on information technology. Hardware concepts are described in terms of input, processing, storage, and output technologies. Regarding input, various technologies such as key input, mouse input, and automatic input of data using bar code scanners and similar devices are described. Newer technologies such as voice input are also discussed. Systems software is discussed in terms of the two broad categories of systems software and applications software. Systems software includes the operating system, utilities for performing functions like formatting disks, and language translators for converting source code programs into object code (machine language). A number of programming languages are also discussed, including the generations of languages from the first to the fourth generation. Special purpose application software, specifically accounting software packages, are discussed in some detail. Alternative systems configurations are then presented, ranging from super computers to notebook computers
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Chapter 8--Logical modeling for database systems design
This chapter begins by explaining the distinction between logical and physical modeling. The focus of this chapter is logical data modeling using the entity relationship approach and logical process modeling using data flow diagrams. The entity-relationship approach first proposed by Peter Chen is explored in some detail. The ER approach uses two symbols -- rectangles to represent entities and diamonds to represent relationships between entities. ER modeling is data oriented, focusing on the data that need to be represented in the system. Extended entity relationship modeling using McCarthy’s Resources-Events-Agents approach is then presented. The process of depicting business rules using relationship cardinality, entity and relationship attributes, and the optional or mandatory participation in relationships is explained. Logical process modeling using data-flow diagrams is then discussed. Data flow diagrams focus on processes and the logical flow of data in the system. The different levels of data flow diagrams, from context diagrams to "level 0" and "level 1" diagrams are described. The REA modeling approach is described in detail, including the process of analyzing scenarios to identify the significant business events, the resources involved in these events, and the agents who perform or are affected by the events. A nine-step REA modeling approach is described. Two comprehensive examples are presented wherein narrative descriptions of a student registration system and a public library~s lending system are used as the basis for constructing extended entity relationship diagrams, context diagrams, and Level 0 data flow diagrams using the event-oriented modeling approach.