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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

On October 2, 2002, a clerk at Bear Stearns had erroneously entered an order to sell nearly $4 billion worth of securities. The trader had sent an order to sell $4 million worth. Only $622 million of the orders were executed, and the remainder of the orders was canceled prior to execution. Reports stated that it was a human error, not a computer error, and that it was the fault of the clerk, not the trader. What is your opinion of these reports? What controls could have prevented this error?

Summary Introduction

To discuss: The given situation

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

Discuss the given situation:

On October 2, 2002, a clerk at Company B has wrongly entered to sell securities worth $4 billion rather than $4 million...

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