Accounting Information Systems: The Processes and Controls, 2nd Edition

E-BUSINESS AND ELECTRONIC DATA INTERCHANGE (EDI) (STUDY OBJECTIVE 8)

Chapter 8 described e-business and EDI advantages, risks, and controls from the perspective of the seller. In addition, it was explained earlier in this chapter that the buyer and seller exchange goods and cash with each other; the buyer receives goods and pays cash in the exchange, while the seller receives cash and ships goods. When these exchanges are viewed from the buyer's perspective, a mirror image of the seller's perspective can be seen. The electronic exchange of transaction information is much the same for the buyer as for the seller. You should find it useful at this point to reexamine Chapter 8, Exhibit 8-18, regarding EDI exchanges. The similarity in processes between buyer and seller means that most of the previous description of advantages, risks, and controls from the seller's perspective applies to the same features from the buyer's perspective, as addressed in this chapter. To avoid repeating those entire sections, the description here will focus only on the risks and controls and will cover both e-business and EDI in this single section.