Report accounting information system e commerce business and accounting problems in e commerce

UNIVERSITY OF ECONOMICS AND LAW Faculty of Information Systems --- REPORT ACCOUNTING INFORMATION SYSTEM Topic: E-Commerce Business and Accounting problems in E-commerce Lecturer: M

UNIVERSITY OF ECONOMICS AND LAW

Faculty of Information Systems

-

REPORT

ACCOUNTING INFORMATION SYSTEM

Topic: E-Commerce Business and Accounting problems in

E-commerce

Lecturer: MSc Vũ Văn Điệp

Group members:

2 Phan Kỳ Khánh Chiêu K194060843

3 Phan Quang Minh Long K194060852

5 Nguyễn Ngọc Phương Uyên K194060879

Ho Chi Minh City, August, 2022

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Table of Contents

1 Overview E-commerce and Accounting Information System (AIS) 3

1.2.2 How can an AIS add value to an organization? 6 1.3 Accounting information system in e-commerce enterprises 7

2 Problems with accounting information systems at enterprises 8

2.1.2 Security of information systems in enterprises 8 2.2 Risk of external intrusion and viruses transmitted through the network 8 2.3 Risks in the process of managing business information 9

2.3.3 Risks in the process of changing orders after placing orders 9

2.6 Ensuring the effectiveness and reasonableness of accounting information in

3.1.2 Security the information system, prevent fraudulent actions when

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3.1.3 Develop measures to prevent outside intrusions and viruses transmitted

3.2 Ensure that electronic systems for transmitting, receiving, and processing customer order information operate efficiently and provide accurate information 12

3.7 Ensuring the effectiveness and reasonableness of accounting information in

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1 Overview E-commerce and Accounting Information System (AIS)

1.1 E-commerce

1.1.1 Definition

Ecommerce, also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services using the internet, the transfer of money and data to execute these transactions E-commerce is based on some technologies such as electronic money transfers, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), management systems inventory, and automated data collection systems

Simply defined, e-commerce is transactions conducted on the Internet between businesses and customers buying and using goods and services, or between businesses

1.1.2 Types of E-commerce

Classifying e-commerce according to the objects involved in the transaction, there are many different e-commerce models in the world today Here are some e-commerce models that have been developing

● Business-to-Consumer (B2C): Is an e-commerce model between businesses and

consumers The most common application of this model is shopping for goods and services, managing personal finances

● Business-to-Business (B2B): Businesses will conduct the exchange of goods,

services and information with each other via fax and the internet The main form

of B2B e-commerce model is sales and business support for businesses directly online; procurement of raw materials for the production process from suppliers

or through auctions; or a news site that provides information about a business product

● Consumer-to-Consumer (C2C): Is a model of e-commerce between consumers

This model allows consumers to trade directly with each other

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1.1.3 The benefit of E-commerce

• Market expansion: The market in e-commerce is a global market without

borders Thanks to the internet connection, organizations can quickly access all markets, large and small, across the globe

• Cost reduction: One of the biggest advantages of ecommerce to businesses that

keep sellers interested in online selling is cost reduction Many sellers have to pay lots to maintain their physical store In many cases, even after investing in services, stock, maintenance and workforce, sellers don’t receive desired profits and ROI

• Affordable advertising and marketing: Sellers don’t have to spend a lot of

money to promote their items The world of ecommerce has several affordable, quick ways to market online Ecommerce marketplaces are visual channels – and sellers can really show off their product

• Several payment modes: help consumers and businesses reduce significantly

transaction time and cost

• Helping businesses understand information about the market and partners

• Quickly and effectively reach the target customer market, thus meeting all customer needs in the best way

• Facilitating the establishment and strengthening of relationships between the actors involved in the trade process

1.1.4 E-commerce in Vietnam

Many enterprises have organized the deployment of e-commerce applications at various scales and levels from equipping computers, connecting to the Internet in different forms, exploiting basic applications of e-commerce such as electronic mail, using software for production, business,

A part of Vietnamese consumers in big cities are quite familiar with buying a variety of goods and services through e-commerce websites such as airline tickets, electronics, mobile phones, computers, books, tours, hotel rooms

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More and more families are connected to the Internet and the number of mobile subscribers increases, making the deployment of e-commerce applications to all consumer segments in society more favorable

1.2 Accounting Information System (AIS)

1.2.1 What is an AIS?

Accounting Information System (AIS) is a system that collects, records, stores, and processes data to produce information for decision makers

An AIS can be a very simple paper-and-pencil-based manual system, a very complex system using the very latest in computers and information technology, or somewhere between these two extremes Regardless of the approach taken, the process is the same The AIS and the people who use it must still collect, enter, process, store, and report data and information The paper and pencil or the computer hardware and software are merely the tools used to produce the information

There are six components of an AIS:

● The people who operate the system and perform various functions

● The procedures and instructions, both manual and automated, involved in

collecting, processing, and storing data about the organization's activities

● The data about the organization and its business processes

● The software used to process the organization's data

● The information technology infrastructure, including computers, peripheral

devices, and network communications devices used to collect, store, process, and transmit data and information

● The internal controls and security measures that safeguard the data and the AIS

The functions of an AIS are to:

• Collect and store data about events, resources, and agents

• Transform that data into information that management can use to make decisions

about events, resources, and agents

• Provide adequate controls to ensure that the entity’s resources (including data)

are:

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o Available when needed

o Accurate and reliable

1.2.2 How can an AIS add value to an organization?

As a support activity, the AIS adds value by providing accurate and timely information

so the five primary value chain activities can be performed more effectively and efficiently Well-designed AIS can do this by:

● Improve the quality and reducing the costs of products or services: For example,

an AIS can monitor machinery so operators are notified immediately when performance falls outside acceptable quality limits This helps maintain product quality It also reduces the amount of wasted materials and the costs of having to rework anything

● Improving efficiency: A well-designed AIS can make operations more efficient

by providing more timely information For example, a just-in-time manufacturing approach requires constant, accurate, up-to-date information about raw materials inventories and their locations

● Sharing knowledge: A well-designed AIS can make it easier to share knowledge

and expertise, perhaps thereby improving operations and even providing a competitive advantage

● Improving the efficiency and effectiveness of its supply chain: For example,

allowing customers to directly access the company's inventory and sales order entry systems can reduce the costs of sales and marketing activities Moreover,

if such access reducing the customers' costs and time of ordering, both sales and customer retention rates may increase

● Improving the internal control structure: Security, control, and privacy are

important issues in today's world An AIS with the proper internal control structure can protect systems from problems such as fraud, errors, equipment and software failures, and natural and political disasters

● Improving decision making: An AIS can improve decision making by providing

accurate information in a timely manner

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1.3 Accounting information system in e-commerce enterprises

he information system in an e-commerce enterprise is automatic and the linkage between other information systems within the enterprise is very high In the environment of an e-business, electronic transactions will automatically connect to systems after online transactions are made, such as internal reporting system, inventory management system, etc audit system, …

Due to its high degree of automation, in order for the financial accounting information

to reflect properly, the system needs to ensure that all transactions entered into the information processing system need to be recognized and recorded correctly separate and complete In addition, automatic information processing needs to ensure that recorded transactions are reflected correctly

For programs that automatically enter data, data changes also need to be saved To monitor and control the recording and modification of data in the information processing software system to ensure that information is processed correctly and without errors

To ensure the accuracy of the accounting information system before accepting a transaction for processing, the system needs to be designed to check the accuracy of business information and the connection of information between systems consistent with each other

For an e-commerce enterprise, the application of information technology and its information infrastructure is considered as an integral part of the information system Because the electronic business process has a direct effect on the accounting system, and therefore, on the effectiveness of any information or data provided by that system Therefore, the issue of security and safety is always taken into account when designing information processing systems in e-commerce enterprises and there must be a process for implementing risk management of information systems in enterprises

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2 Problems with accounting information systems at enterprises

2.1 Problems related to information security

2.1.1 Confidentiality of customer information

Any customer who wants to order online through the company's website must register for a personal account and declare personal information such as full name, address, phone, email, etc For online payment, customers also need to provide information related to their bank account This customer account is used in identifying customers, making statistics of purchases and having preferential policies for loyal customers or customers who buy in large quantities This information is very personal, so if it is disclosed, it will cause many dangers for both customers and the company Aware of the importance of this confidentiality, the company has committed to customers that will keep the information that customers have declared when registering for an account Therefore, the company always faces the risk of this information being leaked out

2.1.2 Security of information systems in enterprises

In e-commerce business, placing and processing orders mainly relies on information system application, so it is necessary to ensure that the system correctly processes orders To be accurate, information systems are designed to prevent objects inside the enterprise from accessing and having behaviors that falsify the information system The application of information technology in automatic processing creates the possibility that the company's employees or outside objects can gain unauthorized access to the system to edit data about orders, or payment orders to misappropriate assets and cause losses to the company

2.2 Risk of external intrusion and viruses transmitted through the network

Along with the development of information technology, the ability of hackers and destructive programs (viruses) also grows and becomes more dangerous If the information system is paralyzed or compromised, it will lead to extremely dangerous consequences for the company's business This can lead to loss of assets and business information of the company Sometimes the business will be delayed due to the website

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being crippled if vandalized, it may cause trouble to customers, discrediting the company's business

2.3 Risks in the process of managing business information

2.3.1 Providing inaccurate information

An effective and accurate information system needs to be regularly and accurately updated with relevant information (for example, selling price, inventory, information

on discounts, promotions, etc., shown on the website needs to be accurate with the company's current sales policy)

Providing inaccurate information to customers causes terrible damage to the company,

in particular, will seriously affect revenue recognition

2.3.2 Inaccurate inventory information

Failure to accurately track inventory can pose a risk that inventory may not be sufficient

to supply orders received when the company has no intention of re-stocking or incoming goods may not be able to meet demand This leads to the risk that the customer will have to wait longer to receive the goods or the order will be canceled Obviously, the above cases will cause losses to the company not only in terms of refund costs for canceled orders, but also the company will lose credibility and trust in customers when they are not satisfied with the service that the company provides when there is a long wait for the order or the order is canceled after placing the order and payment

2.3.3 Risks in the process of changing orders after placing orders

During the purchase process, the customer may change the order after placing the order

To do that, customers need to contact the company's sales staff directly and it can be difficult and time consuming to change orders On the other hand, if the number of orders changes too much, the staff may make mistakes or forget to process the order Therefore, this may cause confusion in customer delivery and revenue recognition in the accounting information system

2.4 Risks in payment

● Payment in cash:

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