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Accounting Information Systems

11th Edition
Ulric J. Gelinas + 3 others
ISBN: 9781337552127

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BuyFindarrow_forward

Accounting Information Systems

11th Edition
Ulric J. Gelinas + 3 others
ISBN: 9781337552127
Textbook Problem

With an EDI system, a customer’s order may be entered directly into the OE/S system without human intervention. Discuss your control concerns under these circumstances.

Summary Introduction

To determine: The procedures should control the process under the given circumstances.

Introduction:

Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.

Explanation

Describe the procedures should control the process under the given circumstances:

It is given that the order of the customers can be directly entered into the order entry/ sales application without the help of humans. Business process or application control and entity-level or pervasive or IT general controls are the categories, which would control the process.

A business process or application control:

In order to determine that the order is not from unauthorized sources and to make sure that the order is from the valid customer, the value-added network or Electronic Data Interchange (EDI) translator can be used. Digital signatures can be used for this purpose. The incoming order should be matched with the customer master data to determine the validity of the customer.

It will be done the order entry/sales (OE/S) application. It can also be used to perform a credit check and inventory availability check...

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