1. ACCOUNTING INFORMATION SYSTEMS
Core Concepts of
ACCOUNTING INFORMATION SYSTEMS
Moscove, Simkin & Bagranoff
Developed by:
S. Bhattacharya, Ph.D.
Florida Atlantic University
John Wiley & Sons, Inc.

2. Chapter 9 Data Modeling Introduction An Overview of Databases
Steps in Creating a Database
Additional Database Design Concerns for AISs

3. An Overview of Databases
A database is a collection of data that is stored in related files. Reasons why databases are important are:
Valuable information
Volume
Complexity
Privacy
Irreplaceable data
Internet users

4. Storing Data in Databases
To be useful, the data in an organization’s databases must be stored and organized efficiently.
Three important concepts are
Data hierarchy
Record structures
Record keys

5. Data Hierarchy
Storing accounting data in computer files involves organizing the data into a data hierarchy.
The lowest level of information in a file is a binary digit.
Eight bits create a byte that represents a character.
A data field combines several characters.
A record combines related data fields.
A set of records forms a file.
A database is a collection of files that contain all the information for an application.

6. Record Structures and Record Keys
The specific data fields in each record of a computer file are part of the record structure.
Keys are identifiers for records:
Primary keys are unique to each record
Secondary keys are non-unique identifiers for records and used for searching files for specific information
Foreign keys enable database records to reference one or more records in other files

7. How to Create Databases With REA
An events-based accounting system (EBA) records activities simply because they happen not because the system requires it.
The REA is a tool for designing databases.
Using this model, an AIS captures data about an organization’s resources, events and agents (REA).
Resources are an organization’s assets.
Events are identifiable activities associated with a business processes.
Agents are the people associated with business activities.

8. Identify Relationships Among Entities
An entity-relationship (ER) diagram graphically depicts a database’s contents.
Entities are resources, events and agents.
ER diagrams depict entities being modeled and the relationships (cardinalities) among them.

9. Entity-Relationship Modeling
The E-R model uses diamond symbols to represent relationships.
E-R diagrams include symbols (“1” or “*”) that provide information on cardinality.
The cardinality of a relationship describes the number of occurrences of one entity that may be associated with a single occurrence of the other entity.

10. Cardinality Relationships
One-to-one (1:1)
One-to-many or many-to-one (1:*), (*:1)
Many-to-many (*:*)
Cardinalities provide useful information about the nature of the company being modeled and the business policies that it follows.

11. Create Database Records
A particular method used to organize records in a database is called the database’s structure.
The objective is to develop this structure efficiently so that data can be accessed quickly and easily.
Three types of structures are: 1) hierarchical, 2) network and 3) relational.

12. Hierarchical Structures
Accounting data are often organized in a hierarchy.
A hierarchical structure has successive levels of data in an inverted treelike pattern, also known as tree structures.
Higher level records are parent records and lower level records are child records.
Two records on same level are sibling records.

13. Network Structures
Databases can use a network structure to link related records together and capture many-to-many relationships.
The linking is accomplished with pointer fields.
The pointers maintain the data relationships.

14. Relational Structures
Relational databases are more flexible.
Users can define relationships at the time the database is created or at later points in time.

15. Database Concerns for AISs
Administration
Documentation
Data integrity
Processing Accuracy and Completeness
Concurrency
Backup and Security

16. Copyright Copyright 2005 John Wiley & Sons, Inc. All rights reserved.
Reproduction or translation of this work beyond that permitted in
Section 117 of the 1976 United States Copyright Act without the
express written permission of the copyright owner is unlawful.
Request for further information should be addressed to the
Permissions Department, John Wiley & Sons, Inc. The purchaser may
make backup copies for his/her own use only and not for distribution
or resale. The Publisher assumes no responsibility for errors,
omissions, or damages, caused by the use of these programs or from the use of the information contained herein.

17. Chapter 9