Controls are used to ensure that only authorized

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Controls are used to ensure that only authorized individuals input data to the system. Con- trols increase the system’s reliability and allow information to be traced back to its source. Decision Insight Geek Chic Cyberfashion pioneers are creating geek chic, a kind of wearable computer. Cyberfashion draws on digital cellular phones, lithium batteries, and miniature monitors. Special thread is woven into clothing to carry low-voltage signals from one part of the system to another, and fabric keyboards are sewn into clothes. These creations give new meaning to the term software . Decision Insight Information Processors Information processors are systems that interpret, transform, and summarize information for use in analysis and reporting. An important part of an information processor in accounting systems is professional judgment. Accounting principles are never so structured that they limit the need for professional judgment. Other parts of an information processor include journals, ledgers, working papers, and posting procedures. Each assists in transforming raw data to useful information. Increasingly, computer technology (both computing hardware and software) is assisting man- ual information processors. This assistance is freeing accounting professionals to take on in- creased analysis, interpretive, and managerial roles. Web-based application service providers (ASPs) offer another type of information processor. Information Storage Information storage is the accounting system component that keeps data in a form accessible to information processors. After being input and processed, data are stored for use in future analyses and reports. The database must be accessible to preparers of periodic financial reports. Auditors rely on this database when they audit both financial statements and a company’s con- trols. Companies also maintain files of source documents. Older systems consisted almost exclusively of paper documents, but most modern systems depend on electronic storage devices. Advances in information storage enable accounting systems Point: Understanding a manual accounting system is useful in understanding an electronic system. Point: BusinessWeek reported that 75% of all e-mail traffic is spam. Point: A financial accounting database can be designed to support a wide range of internal reports for management.
Chapter 7 Accounting Information Systems 275 to increasingly store more detailed data. This means managers have more data to access and work with in planning and controlling business activities. Information storage can be online, meaning that data can be accessed whenever, and from wherever, it is needed. Off-line storage means ac- cess often requires assistance and authorization. Information storage is increasingly augmented by Web sources such as SEC databases, benchmarking services, and financial and product markets.

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