1. Accounting System Design
ACCOUNTING INFORMATION SYSTEMS
The Crossroads of Accounting & IT
Chapter 14
Accounting System Design
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2. What is the World’s Most Valuable Relational Database? Meet Oracle.
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3. External databases, such as Gartner Research.
Databases Types
Databases can be:
External databases, such as Gartner Research.
Internal databases, such as the database used to store accounting transactions.
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4. Databases Types Internal databases can be classified as:
Operational databases
Databases used in the operations of the business
Most are relational databases
Oracle is the largest provider of relational database tools.
Data warehouse
Contains data collected from a variety of sources
Data not used for routine business activities.
Often used for business intelligence (BI) purposes
XBRL databases
Contains XBRL data and metadata used for creating XBRL reports.
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5. RDBMS Relational database management system (RDBMS) software
Software used to create, manage, maintain, and manipulate a relational database.
Software that interacts with accounting software to insert, update, and delete data from the database.
All database programs (including MS Access, MS SQL Server, and Oracle) use RDBMS software.
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6. Databases Essentials Revisited
Database essentials an accountant needs to know include:
Field: pieces of information about events and objects.
Records: collection of related fields.
Table: a collection of related records with a unique table name.
Database: a collection of related tables with a unique database name.
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7. Database Integrity
Database integrity refers to data being accurate and complete.
Four rules helps to ensure database integrity:
Rule 1: Entity Integrity. Each record in the database must have a unique identifier called a primary key. No two records in the database table can have the same primary key value.
Rule 2. Primary Key Integrity. The primary key value cannot be null (empty). Each record must have a value for the primary key field.
Rule 3. Domain Integrity. The field values must be from a predefined domain. For example, the Date field must have a date and not any other values (Validation Rule).
Rule 4. Referential Integrity. Data referenced and stored in related tables must be consistent across the database. Referential integrity is improved when the customer address, for example, is stored in one location only, eliminating the possibility of the address differing from table to table.
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8. Database Anomalies
Database anomalies are problems within a database table that result in inaccurate or incomplete data.
A well-designed database is free of deletion, update, and insertion (DUI) anomalies and are removed through a process called normalization.
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9. Database Anomalies Three types of anomalies shown in Figure 14.2 are:
Deletion problem. Deleting Vincent as a customer will cause the deletion of four records. These four records hold vital information about four orders and four items.
Update problem. To update Vincent’s customer address, four records would need to be updated.
Insertion problem. To identify a unique record, we have to use the customer number, order number, and item number. That means these three fields together form the primary key. If we want to insert a new customer who hasn’t placed an order yet, then the order number and item number fields would be empty. (This violates database integrity Rule No 2: The Primary Key Value Cannot Be Null.)
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10. Database Modeling
Database modeling, also called data modeling, is a technique used to develop an anomaly-free database with database integrity.
When designing a database, you can think of it as three different realms:
Database designer realm
Database builder realm
Database user realm
The table shown here gives examples of how the terminology can differ between the three realms.
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11. This underscores the importance of good database design
This underscores the importance of good database design. If a database is designed well, it provides accurate data that can be retrieved easily. If a database is not well designed, then 80% of your time can be spent maintaining a poorly designed database. In addition, the result may be poor quality data that is inaccurate or irretrievable.
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12. What is ERD (Entity Relationship Diagram)?
Entity relationship diagram (ERD) depicts the relationship among entities in the database.
The ERD shows:
Entities: Customer and Sales Order
Relationship between entities: customer places an order
Relationship cardinality:one-to-one, one-to-many, or many- to-many.
An example of a relationship cardinality would be a One-to-Many relationship where one customer can place many orders.
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13. Database Entities Database Entities can be objects or events.
What an IT professional might call an object, an accounting professional might call people.
An example of people would be customers.
The database table required to store information about customers would be the Customer table.
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14. Entity Relationships
An entity relationship diagram shows the relationships among entities.
Three different types of relationships among entities are:
One-to-one relationships
One-to-many relationships
Many-to-many relationships
An ERD uses symbols to show if the relationship is one-to-one, one-to-many, or many-to-many.
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15. Entity Relationships
For a single occurrence of one entity (one customer), cardinality defines the maximum and minimum number of occurrences that might relate to the other entity (sales orders).
The name given to the relationship (one-to-one, one-to-many, and many-to-many) refers to the maximum cardinalities (Steps 1 and 3 in Figure 14.8).
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16. Entity Relationships
ERD’s use crow’s feet symbols to indicate the type of relationship. Both the minimum and maximum must be specified as shown here.
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17. How To Build an ERD
Step 1: Determine the relevant business transactions that the organization must support.
Step 2: Determine the business rules for a specific business transaction.
Step 3: Determine business entities and the relationship among them.
Step 4: Determine the entity identifier(s) for each entity.
Step 5: Draw entity relationship diagram.
Step 6: Optimize the entity relationship diagram by removing many-to- many relationships.
Step 7: Add business-related attributes to the entity relationship diagram.
Step 8: Implement relationships.
Step 9: Develop relational database tables.
Step 10: Build relational database tables.
There are 10 steps to building an ERD.
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18. ERD Relationship Cardinality Symbols
The crow’s feet symbols are illustrated here.
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19. One-to-Many Relationship Possibilities
There are four different one-to-many relationship possibilities using the crow’s feet symbols.
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20. ERD Using Intersection Table to Remove Many-to-Many Relationships
Many-to-many relationships must be removed using intersection tables.
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21. EspressoCoffee Sales Transaction ERD with Foreign Keys
Sales transaction ERD is shown here with crow’s feet symbols and an intersection table.
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22. Conceptual Database Tables
Conceptual database tables are prepared using the format shown here.
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23. MS Access and MS SQL Server EspressoCoffee Sales Transaction ERD
Notice how similar the database tables are between MS Access software and MS SQL server.
This is what the database tables look like after they are built in a database software.
Pair and Share: Compare the MS Access screen and the MS SQL Server screen. What is similar? What is different?
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24. Relational Database Design and Development
This diagram summarizes the 10 steps to relational database design and development.
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25. What is REA (Resources, Events, and Agents)?
REA (resources, events, and agents) is a database modeling tool which is sometimes used to teach accounting databases.
It is not used by IT professional database designers. Instead, database designers use ERD or UML to design and develop relational databases.
To design an REA diagram for a specific business transaction, first identify agents, resources, and events.
The four rules for drawing REA diagrams are:
Rule 1. Resource-Event Relationship.
Rule 2. Event-Event Relationship.
Rule 3. Agent-Event Relationship.
Rule 4. Agent-Agent Relationship.
REA is a database modeling tool sometimes used to teach accounting databases, but it is typically not used by IT professionals.
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26. REA Diagram for Sales Order Transaction
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27. Basic REA Template
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28. Basic REA Template
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29. REA Diagram for Complete Customer Module
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30. How is SQL Used in Database Queries?
Structured query language (SQL) is a 4th generation, non- procedural language designed to define and manipulate relational database objects.
SQL can query many records from one or more tables with a single statement.
SQL statements, also called commands, are divided into two distinct categories:
Data definition language (DDL)
Data manipulation language (DML)
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31. DDL Statements
DDL statements create, alter, and drop database objects.
Examples:
CREATE statement is used to create relational database objects such as creating a database or a table.
ALTER statement is used to change the relational database object such as adding a new field to a specific table.
DROP statement is used to delete a database object such as deleting a table or removing an existing field from a specific table.
Data definition language (DDL) can create, alter, or drop database objects.
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32. DML Statements
DML statements are used to manipulate data within a relational database.
DML statements select, insert, update, and delete database records.
The SELECT statement is the primary one used to create database queries.
Data manipulation language (DML) can select, insert, update and delete database records.
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