Second, the logic of a business process is more easily understood when it is not shrouded by technology.

The information needed to trigger and support events such as selling, warehousing, and shipping is fundamental and independent of the technology that underlies the

information system. For example, a shipping notice informing the billing process that a product has been shipped serves this purpose whether it is produced and

processed manually or digitally. Once students understand what tasks need to be performed, they are better equipped to explore different and better ways of performing

these tasks through technology. Finally, manual procedures facilitate understanding internal control activities, including segregation of functions, supervision,

independent verification, audit trails, and access controls. Because human nature lies at the heart of many internal control issues, we should not overlook the

importance of this aspect of the information system.

The Flat-File Model
The flat-file approach is most often associated with so-called legacy systems. These are large mainframe systems that were implemented in the late 1960s through the

1980s. Organizations today still use these systems extensively. Eventually, modern database management systems will replace them, but in the meantime accountants must

continue to deal with legacy system technologies. The flat-file model describes an environment in which individual data files are not related to other files. End users

in this environment own their data files rather than share them with other users. Thus, stand-alone applications rather than integrated systems perform data

processing. When multiple users need the same data for different purposes, they must obtain separate data sets structured to their specific needs. Figure 1-12

illustrates how customer sales data might be presented to three different users in a durable goods retailing organization. The accounting function needs customer sales

data organized by account number and structured to show outstanding balances. This is used for customer billing, AR maintenance, and financial statement preparation.

Marketing needs customer sales history data organized by demographic keys. They use this for targeting new product promotions and for selling product upgrades. The

product services group needs customer sales data organized by products and structured to show scheduled service dates. Such information is used for making after-sales

contacts with customers to schedule preventive maintenance and to solicit sales of service agreements. The data redundancy demonstrated in this example contributes to

three significant problems in the flat-file environment: data storage, data updating, and currency of information. These and other problems associated with flat files

are discussed in the following sections.

Data Storage
An efficient information system captures and stores data only once and makes this single source available to all users who need it. In the flat-file environment, this

is not possible. To meet the private data needs of users, organizations must incur the costs of both multiple collection and multiple storage procedures. Some commonly

used data may be duplicated dozens, hundreds, or even thousands of times.

Data Updating
Organizations have a great deal of data stored in files that require periodic updating to reflect changes. For example, a change to a customer’s name or address must

be reflected in