Transcript E-business

Chapter
14-1
E-Commerce
and EBusiness
Chapter
14-2
Accounting Information Systems, 1st Edition
Study Objectives
1.
An introduction to e-commerce and e-business.
2.
The history of the Internet.
3.
The physical structure and standards of the Internet.
4.
E-commerce and the benefits of e-commerce.
5.
The privacy expectations in e-commerce.
6.
E-business and the IT enablement.
7.
E-business enabling examples.
8.
Intranets and extranets to enable e-business.
9.
Internal controls for the Internet, intranets, and extranets.
10. XML and XBRL as e-business tools.
11.
Chapter
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The ethical issues in e-business and e-commerce.
Introduction to E-commerce and E-business
E-commerce - electronically enabled transactions
between a business and its customers.
E-business - includes not only electronic trade with
customers, but also
 servicing customers and vendors,
 trading information with customers and vendors,
and
 electronic recording and control of internal
processes.
Chapter
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SO 1 An introduction to e-commerce and e-business.
Introduction to E-commerce and E-business
Exhibit 14-1
E-business and E-commerce
The most common method of conducting e-commerce and e-business is
to use the Internet to electronically exchange data.
Chapter
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SO 1 An introduction to e-commerce and e-business.
Introduction to E-commerce and E-business
Quick Review
Which of the following statements is true?
a. E-business is a subset of e-commerce.
b. E-commerce is a subset of e-business.
c. E-business and e-commerce are exactly the
same thing.
d. E-business and e-commerce are not elated.
Chapter
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SO 1 An introduction to e-commerce and e-business.
The History of the Internet
In 1965, a computer at MIT (Massachusetts) was
connected to a computer in California, using dial-up
telephone lines.
In 1969, computers at four major universities were
connected via leased telephone lines.
 Grew into a network called ARPANET.
 Purpose was to share military research data among
UCLA, UC Santa Barbara (UCSB), Stanford, and
the University of Utah.
 Over time, many other universities, NASA, and the
Rand Corporation were connected to this network.
Chapter
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SO 2 The history of the Internet.
The History of the Internet
Two technologies developed for ARPANET:

Packet switching

Router
E-mail was adapted to ARPANET in 1972.
BBN Technologies,
 developed the use of the @ symbol in e-mail address.
 developed a communication protocol to use in
ARPANET.
 in the 1970s, helped develop the TCP/IP protocol.
Chapter
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SO 2 The history of the Internet.
The History of the Internet
In 1986, the National Science Foundation (NSF) began
to develop a backbone set of servers, gateways, and
networks that eventually became the Internet.
Internet serves as backbone for World Wide Web.
In 1992, commercial enterprises began offering
Internet access to subscribers.
In 1993, first graphical user interface (GUI) browser
was developed.
In 1995, the NSF relinquished control of the Internet.
Since that time, all Internet traffic has been routed
through commercial networks.
Chapter
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SO 2 The history of the Internet.
The History of the Internet
Exhibit 14-2
Chart of the
Number of
Web Servers
Chapter
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The History of the Internet
Quick Review
An electronic hardware device that is located at the
gateway between two or more networks is a
a. packet switch.
b. URL.
c. router.
d. protocol.
Chapter
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SO 2 The history of the Internet.
The Physical Structure and Standards of the
Internet
The Network
Types of
organizations
that make up
the Internet.
Exhibit 14-3
Architecture of
the Internet
Chapter
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SO 3 The physical structure and standards of the Internet.
The Physical Structure and Standards of the
Internet
The Network
The Internet comprises,
 backbone providers,
 network access points,
 regional ISPs,
 local ISPs, and
 Internet subscribers.
Chapter
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SO 3 The physical structure and standards of the Internet.
The Physical Structure and Standards of the
Internet
The Network
The Internet comprises,
 backbone providers,
 network access points,
 regional ISPs,
 local ISPs, and
 Internet subscribers.
Chapter
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SO 3 The physical structure and standards of the Internet.
The Physical Structure and Standards of the
Internet
The Network
The Internet comprises,
 backbone providers,
 network access points,
 regional ISPs,
 local ISPs, and
 Internet subscribers.
Chapter
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 dial-up modems,
 digital subscriber
lines (DSL), or
 cable TV lines.
SO 3 The physical structure and standards of the Internet.
The Physical Structure and Standards of the
Exhibit 14-4
Internet
A Simple Web Page and
the HTML Source Code.
The Common Standards of the Internet
HTML - language to present data on websites.
Chapter
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SO 3 The physical structure and standards of the Internet.
The Physical Structure and Standards of the
Exhibit 14-4
Internet
A Simple Web Page and
the HTML Source Code.
The Common Standards of the Internet
Chapter
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SO 3 The physical structure and standards of the Internet.
The Physical Structure and Standards of the
Exhibit 14-4
Internet
A Simple Web Page and
the HTML Source Code.
The Common Standards of the Internet
URL - uniform resource locater address.
Domain Name - http://www.google.com.
Common suffix portions of domain names:
.com - commercial
.edu - educational
.org - nonprofit
.gov - governmental
.mil - military
.net - network
URL system actually uses IP addresses.
Chapter
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SO 3 The physical structure and standards of the Internet.
The Physical Structure and Standards of the
Internet
Quick Review
The type of organization that serves as the main
trunk line of the Internet is called a
a. local ISP.
b. regional ISP.
c. global ISP.
d. backbone provider.
Chapter
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SO 3 The physical structure and standards of the Internet.
E-Commerce and its Benefits
Benefits of E-commerce for the Customer
Access to broader market for goods and services.
More convenient times for shopping.
More choices to the customer.
Lower prices.
Exchange information with businesses before, during,
and after the purchase.
Quicker delivery of the product.
Receive targeted marketing from businesses.
Chapter
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SO 4 E-commerce and the benefits of e-commerce.
E-Commerce and its Benefits
Disadvantages of E-commerce for Customer
Opportunity for fraud.
Theft of assets.
Theft of data.
Inability to handle or try out the product.
Chapter
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SO 4 E-commerce and the benefits of e-commerce.
E-Commerce and its Benefits
Benefits of E-commerce for the Business
Access to broader market.
Reduced marketing costs.
Potential for much richer marketing concepts.
Quickly react to changes in market conditions.
Likely to experience reduced order-processing and
distribution costs.
Customer convenience likely to result in higher sales.
Higher sales with reduced marketing, order processing,
and distribution costs can lead to higher profits.
Chapter
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SO 4 E-commerce and the benefits of e-commerce.
E-Commerce and its Benefits
Disadvantages of E-commerce for Business
IT system usually more complex and costly.
World Wide Web opens a business to:
 chances for fraud,
 hackers, and
 compromised customer privacy.
Chapter
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SO 4 E-commerce and the benefits of e-commerce.
E-Commerce and its Benefits
E-Commerce and Traditional Commerce
Brick and mortar.
Etailers.
Clicks and mortar (bricks and clicks).
Chapter
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SO 4 E-commerce and the benefits of e-commerce.
E-Commerce and its Benefits
Quick Review
Which of the following is not a direct advantage for
the consumer from e-commerce?
a. Access to a broader market.
b. More shopping convenience.
c. Reduced order-processing cost.
d. Information sharing from the company.
Chapter
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SO 4 E-commerce and the benefits of e-commerce.
E-Commerce and its Benefits
Quick Review
Each of the following represents an application of
B2C commerce except
a. software sales.
b. electronic retailing.
c. data exchanges.
d. stock trading.
Chapter
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SO 4 E-commerce and the benefits of e-commerce.
Privacy Expectations of Business in E-commerce
Personal information to be protected:
Name.
Address.
Social Security number or other ID number.
Employment history.
Personal or family health conditions.
Personal or family financial information.
History of purchases or other transactions.
Credit records.
Chapter
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SO 5 The privacy expectations in e-commerce.
Privacy Expectations of Business in E-commerce
Ten privacy practices to ensure adequate
customer confidence regarding privacy of
information:
6. Access.
1. Management.
2. Notice.
7. Onward transfer and
disclosure.
3. Choice and consent.
8. Security.
4. Collection.
9. Quality.
5. Use and retention.
10. Management and enforcement.
Chapter
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SO 5 The privacy expectations in e-commerce.
Privacy Expectations of Business in E-commerce
Quick Review
Before forwarding customer data, an organization
should receive explicit or implicit consent of the
customer. This describes which of the AICPA Trust
Services Principles online privacy practices?
a. Consent.
b. Use and retention.
c. Access.
d. Onward transfer and disclosure.
Chapter
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SO 5 The privacy expectations in e-commerce.
E-Business and IT Enablement
The supply chain is the set of linked processes that
take place from the,
 acquisition and delivery of raw materials,
 through the manufacturing,
 distribution,
 wholesale, and
 delivery of the product
to the customer.
Chapter
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SO 6 E-business and the IT enablement.
E-Business and IT Enablement
B2B—A Part of E-Business
Chapter
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Exhibit 14-6
E-commerce B2C vs.
E-Business B2B4
SO 6 E-business and the IT enablement.
E-Business and IT Enablement
Quick Review
Which of the following processes within a supply
chain can benefit from IT enablement?
a. All processes throughout the supply chain.
b. Only internal processes within the supply chain.
c. Only external processes within the supply chain.
d. Exchange processes between a company and its
suppliers.
Chapter
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SO 6 E-business and the IT enablement.
E-Business and IT Enablement
E-Business Enablement Examples
Chapter
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SO 7 E-business enabling examples.
Intranets and Extranets to Enable E-Business
Three levels of network platforms
Chapter
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Exhibit 14-7
Internet, Extranet,
and Intranet
SO 8 Intranets and extranets to enable e-business.
Intranets and Extranets to Enable E-Business
Quick Review
Intranets are used for each of the following except
a. communication and collaboration.
b. business operations and managerial monitoring.
c. web publishing.
d. customer self-service.
Chapter
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SO 8 Intranets and extranets to enable e-business.
Internal Controls for the Internet, Intranets
and Extranets
Exhibit 14-8
Controls to Limit
Access to Intranets
and Extranets
Chapter
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SO 9 Internal controls for the Internet, intranets, and extranets.
Internal Controls for the Internet, Intranets
and Extranets
Exhibit 14-8
Controls to Limit
Access to Intranets
and Extranets
Chapter
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SO 9 Internal controls for the Internet, intranets, and extranets.
Internal Controls for the Internet, Intranets
and Extranets
Quick Review
Which of the following IT controls would not be
important in an extranet?
a. Encryption.
b. Password.
c. Antivirus software.
d. Penetration testing.
e. All of the above are important IT controls.
Chapter
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SO 9 Internal controls for the Internet, intranets, and extranets.
XML and XBRL as Tools to Enable E-Business
Two languages as tools to enable e-business:
 XML (eXtensible Markup Language)
 XBRL (eXtensible Business Reporting Language)
XML In Internet EDI
 Internet EDI is alternative to traditional EDI.
 Uses the Internet to transmit business information
between companies.
 XML allows data exchange over Internet in a rich
format.
Chapter
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SO 10 XML and XBRL as e-business tools.
XML and XBRL as Tools to Enable E-Business
Traditional EDI and VAN versus Internet EDI
Chapter
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Exhibit 14-9
SO 10 XML and XBRL as e-business tools.
XML and XBRL as Tools to Enable E-Business
XBRL for Financial Statement Reporting
Major advantages:
Easily used in several formats.
 Printed in paper format.
 Displayed as an HTML web page.
 Sent electronically to the SEC.
 Transmitted to banks or regulatory agencies.
 Computer program can extract pieces of
information from the XBRL file.
Chapter
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SO 10 XML and XBRL as e-business tools.
XML and XBRL as Tools to Enable E-Business
Quick Review
An extensible markup language designed specifically
for financial reporting is
a. Internet EDI.
b. XML.
c. XBRL.
d. XFRL.
Chapter
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SO 10 XML and XBRL as e-business tools.
Ethical Considerations
Online privacy policies of the AICPA Trust services
Principles represent ethical obligations to customers.
Ethical obligations would dictate that companies take
adequate care to guard the security and privacy of
data collected through e-commerce.
Chapter
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SO 11 The ethical issues in e-business and e-commerce.
Copyright
Copyright © 2008 John Wiley & Sons, Inc. All rights reserved.
Reproduction or translation of this work beyond that permitted
in Section 117 of the 1976 United States Copyright Act without
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to the Permissions Department, John Wiley & Sons, Inc. The
purchaser may make back-up copies for his/her own use only
and not for distribution or resale. The Publisher assumes no
responsibility for errors, omissions, or damages, caused by the
use of these programs or from the use of the information
contained herein.
Chapter
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