Advanced Accounting Systems

1.) Business processes should mandate the use of IT because the models created are a representation of the reality of each of the business processes that occur on a day to day basis. Companies can create these models in order to show reality in an easier and more understandable way. These models can also be customized to each company that they pertain to. If an IT department decided to use a standard system it would not be able to depict all of the different processes the each business has. Davey Tree’s business processes are different than Microsoft’s. There is no way a standardized IT database would be able to fit each companies needs. REA Ontology is one way in which companies show the business processes.
REA Ontology consists of four different levels: the value system, the value chain level, the business process level, and the task level. The value system level of the REA model focuses on the resources exchanged between the enterprise and external business suppliers such as creditors. An IT database would have to be created to represent the different types of external business suppliers of different types of businesses. The value chain level of the REA model focuses on the resource flows between economic events and business processes. Each business will have different events that are modeled for it. The business process level of the REA model focuses on the interconnected business processes such as the acquisition and payment process. The last level of the REA model is the task level. This focuses on the individual steps needed to complete certain events within a company. Each organization could have similar events but could perform these tasks in different orders or steps.

2.)
Purchase [1,1] --------   [1,M] Purchase Order

• One Purchase is associated with at least One Purchase Order.
• One Purchase is associated with at most Many Purchase Orders.
• One Purchase Order is associated with at least One Purchase.
• One Purchase Order is associated...