Summary of Electronic Commerce Systems.

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Summary

This chapter focused on Internet commerce, including business-to-consumer and business-to-business relationships. Internet commerce has been the source of intense interest because it enables thousands of business enterprises of all sizes and millions of consumers to congregate and participate in worldwide commerce. The chapter examined Internet technologies, including packet switching, the World Wide Web, Internet addressing, and protocols. Several advantages of Inter- net commerce were reviewed, including access to worldwide markets, reductions in inventory, creation of business partner- ships, reductions in prices, and better customer service.

Electronic commerce is also associated with unique risks. The primary concerns intranets pose (discussed in the appendix) come from employees. Internet risks were characterized as a number of specific fraud schemes that threaten consumer privacy and the security of transmitted and stored data. Several measures were examined that can reduce risks and promote an environment of security and trust. These include data encryption, digital certificates, firewalls, and third-party trust seals for Web sites.

The chapter concluded with a review of implications for accountants and the profession. The issues covered included privacy issues, continuous process auditing, electronic audit trails, and the auditors’ need for new skill sets to deal with highly technical, evidential matter that redefine traditional auditing concerns.

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