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 GLOBAL GLOBAL
EDITION EDITION

For these Global Editions, the editorial team at Pearson has

collaborated with educators across the world to address a wide range

Accounting Information Systems

of subjects and requirements, equipping students with the best possible
learning tools. This Global Edition preserves the cutting-edge approach
and pedagogy of the original, but also features alterations, customization,
and adaptation from the North American version.
Accounting
Information
Systems
FOURTEENTH EDITION

FOURTEENTH
Marshall B. Romney • Paul John Steinbart

EDITION
Steinbart
Romney
This is a special edition of an established title widely
used by colleges and universities throughout the world.
Pearson published this exclusive edition for the benefit
of students outside the United States and Canada. If you
EDITION
G LO B A L

purchased this book within the United States or Canada,

you should be aware that it has been imported without
the approval of the Publisher or Author.

Pearson Global Edition

Romney_14_1292220082_Final.indd 1 16/06/17 1:38 PM

 Contents

Preface  19

PART I Conceptual Foundations of Accounting Information

Systems  27

CHAPTER 1 Accounting Information Systems: An Overview   28

Introduction  29
Information Needs and Business Processes   30
Information Needs  31
Business Processes  32
Accounting Information Systems   36
How an AIS Can Add Value to an Organization   37
The AIS and Corporate Strategy   39
The Role of the AIS in the Value Chain   39
Summary and Case Conclusion   41 ■ Key Terms  42
AIS IN ACTION: Chapter Quiz   42 ■ Discussion Questions  43 ■ Problems  44
CASE 1-1 Ackoff’s Management Misinformation Systems   47
AIS IN ACTION SOLUTIONS: Quiz Key   48

CHAPTER 2 Overview of Transaction Processing and Enterprise

­Resource Planning Systems   50
Introduction  51
Transaction Processing: The Data Processing Cycle   52
Data Input  52
Data Storage  53
Data Processing  59
Information Output  59
Enterprise Resource Planning (ERP) Systems   61
Summary and Case Conclusion   64 ■ Key Terms  64
AIS IN ACTION: Chapter Quiz   64 ■ Discussion Questions  65 ■ Problems  66
CASE 2-1 Bar Harbor Blueberry Farm   72
AIS IN ACTION SOLUTIONS: Quiz Key   73

CHAPTER 3 Systems Documentation Techniques   76

Introduction  77
Data Flow Diagrams   78
Subdividing the DFD   80

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 8 CONTENTS

Flowcharts  84
Types of Flowcharts   84
Program Flowcharts  89
Business Process Diagrams   89
Summary and Case Conclusion   91 ■ Key Terms  92
AIS IN ACTION: Chapter Quiz   92 ■ Comprehensive Problem  93 ■ Discussion Questions  93 ■
Problems  94
CASE 3-1 Dub 5  101
AIS IN ACTION SOLUTIONS: Quiz Key   102 ■ Comprehensive Problem Solution   104

CHAPTER 4 Relational Databases  110

Introduction  110
Databases and Files   111
Using Data Warehouses for Business Intelligence   112
The Advantages of Database Systems   113
The Importance of Good Data   113
Database Systems  114
Logical and Physical Views of Data   114
Schemas  114
The Data Dictionary   116
DBMS Languages  116
Relational Databases  116
Types of Attributes  116
Designing a Relational Database for S&S, Inc.   118
Basic Requirements of a Relational Database   120
Two Approaches to Database Design   121
Creating Relational Database Queries   121
Query 1  123
Query 2  125
Query 3  126
Query 4  126
Query 5  128
Database Systems and the Future of Accounting   128
Summary and Case Conclusion   129 ■ Key Terms  130
AIS IN ACTION: Chapter Quiz   130 ■ Comprehensive Problem  131 ■
Discussion Questions  132 ■ Problems  132
CASE 4-1 Research Project  139
AIS IN ACTION SOLUTIONS: Quiz Key   140 ■ Comprehensive Problem Solution   141 ■
Appendix: Data Normalization   144 ■ Summary  147 ■ Second Normalization Example   147

PART II Control and Audit of Accounting Information

Systems  151

CHAPTER 5 Fraud  152
Introduction  153
AIS Threats  154
Introduction to Fraud   156
Misappropriation of Assets  157
Fraudulent Financial Reporting   158
SAS No. 99 (AU-C Section 240): The Auditor’s Responsibility to Detect Fraud   159
Who Perpetrates Fraud and Why   159
The Fraud Triangle  160

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 CONTENTS 9

Computer Fraud  164
The Rise in Computer Fraud   164
Computer Fraud Classifications   166
Preventing and Detecting Fraud and Abuse   168
Summary and Case Conclusion   169 ■ Key Terms  170
AIS IN ACTION: Chapter Quiz   170 ■ Discussion Questions  171 ■ Problems  172
CASE 5-1 David L. Miller: Portrait of a White-Collar Criminal   176
CASE 5-2 Heirloom Photo Plans  178
AIS IN ACTION SOLUTIONS: Quiz Key   179

CHAPTER 6 Computer Fraud and Abuse Techniques   182

Introduction  182
Computer Attacks and Abuse   183
Social Engineering  191
Malware  196
Summary and Case Conclusion   205 ■ Key Terms  206
AIS IN ACTION: Chapter Quiz   207 ■ Discussion Questions  208 ■ Problems  208
CASE 6-1 Shadowcrew  218
AIS IN ACTION SOLUTIONS: Quiz Key   219

CHAPTER 7 Control and Accounting Information Systems   222

Introduction  223
Why Threats to Accounting Information Systems are Increasing   223
Overview of Control Concepts   224
The Foreign Corrupt Practices and Sarbanes–Oxley Acts   225
Control Frameworks  226
COBIT Framework  226
COSO’S Internal Control Framework   228
COSO’S Enterprise Risk Management Framework   228
The Enterprise Risk Management Framework Versus the Internal Control
Framework  230
The Internal Environment   230
Management’s Philosophy, Operating Style, and Risk Appetite   231
Commitment to Integrity, Ethical Values, and Competence   231
Internal Control Oversight by the Board of Directors   232
Organizational Structure  232
Methods of Assigning Authority and Responsibility   232
Human Resources Standards that Attract, Develop, and Retain
Competent Individuals  232
External Influences  234
Objective Setting and Event Identification   234
Objective Setting  234
Event Identification  235
Risk Assessment and Risk Response   235
Estimate Likelihood and Impact   236
Identify Controls  237
Estimate Costs and Benefits   237
Determine Cost/Benefit Effectiveness   237
Implement Control or Accept, Share, or Avoid the Risk   237
Control Activities  238
Proper Authorization of Transactions and Activities   238
Segregation of Duties   239

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 10 CONTENTS

Project Development and Acquisition Controls   241

Change Management Controls   242
Design and Use of Documents and Records   242
Safeguard Assets, Records, and Data   242
Independent Checks on Performance   243
Communicate Information and Monitor Control Processes   244
Information and Communication   244
Monitoring  244
Summary and Case Conclusion   247 ■ Key Terms  248
AIS IN ACTION: Chapter Quiz   248 ■ Discussion Questions  250 ■ Problems  250
CASE 7-1 The Greater Providence Deposit & Trust Embezzlement   258
AIS IN ACTION SOLUTIONS: Quiz Key   259

CHAPTER 8 Controls for Information Security   262

Introduction  263
Two Fundamental Information Security Concepts   264
1. Security Is a Management Issue, Not Just a Technology Issue   264
2. The Time-Based Model of Information Security   265
Understanding Targeted Attacks   266
Protecting Information Resources   267
People: Creation of a “Security-Conscious” Culture   268
People: Training  268
Process: User Access Controls   269
Process: Penetration Testing  272
Process: Change Controls and Change Management   273
IT Solutions: Antimalware Controls   273
IT Solutions: Network Access Controls   273
IT Solutions: Device and Software Hardening Controls   277
IT Solutions: Encryption   280
Physical Security: Access Controls   280
Detecting Attacks  281
Log Analysis  281
Intrusion Detection Systems   282
Continuous Monitoring  282
Responding to Attacks  283
Computer Incident Response Team (CIRT)   283
Chief Information Security Officer (CISO)   283
Security Implications of Virtualization, Cloud Computing,
and the Internet of Things   284
Summary and Case Conclusion   285 ■ Key Terms  286
AIS IN ACTION: Chapter Quiz   286 ■ Discussion Questions  287 ■ Problems  288
CASE 8-1 Assessing Change Control and Change Management   292
CASE 8-2 Research Project  293
AIS IN ACTION SOLUTIONS: Quiz Key   293

CHAPTER 9 Confidentiality and Privacy Controls   296

Introduction  297
Preserving Confidentiality  297
Identify and Classify Information to Be Protected   298
Protecting Confidentiality with Encryption   298
Controlling Access to Sensitive Information   298
Training  300

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 CONTENTS 11

Privacy  300
Privacy Controls  300
Privacy Concerns  301
Privacy Regulations and Generally Accepted Privacy Principles   303
Encryption  304
Factors That Influence Encryption Strength   305
Types of Encryption Systems   306
Hashing  308
Digital Signatures  308
Digital Certificates and Public Key Infrastructure   310
Virtual Private Networks (VPNS)   311
Summary and Case Conclusion   311 ■ Key Terms  312
AIS IN ACTION: Chapter Quiz   312 ■ Discussion Questions  314 ■ Problems  314
CASE 9-1 Protecting Privacy of Tax Returns   318
CASE 9-2 Generally Accepted Privacy Principles   319
AIS IN ACTION SOLUTIONS: Quiz Key   319

CHAPTER 10 Processing Integrity and Availability Controls   322

Introduction  322
Processing Integrity  323
Input Controls  323
Processing Controls  325
Output Controls  326
Illustrative Example: Credit Sales Processing   327
Processing Integrity Controls in Spreadsheets   328
Availability  329
Minimizing Risk of System Downtime   329
Recovery and Resumption of Normal Operations   330
Summary and Case Conclusion   334 ■ Key Terms  335
AIS IN ACTION: Chapter Quiz   335 ■ Discussion Questions  336 ■ Problems  337
CASE 10-1 Ensuring Systems Availability  344
CASE 10-2 Ensuring Process Integrity in Spreadsheets   345
AIS IN ACTION SOLUTIONS: Quiz Key   346

CHAPTER 11 Auditing Computer-Based Information Systems   348

Introduction  349
The Nature of Auditing   350
Overview of the Audit Process   350
The Risk-Based Audit Approach   352
Information Systems Audits  353
Objective 1: Overall Security   353
Objective 2: Program Development and Acquisition   355
Objective 3: Program Modification   356
Objective 4: Computer Processing   357
Objective 5: Source Data   360
Objective 6: Data Files   361
Audit Software  362
Operational Audits of an AIS   364
Summary and Case Conclusion   364 ■ Key Terms  365
AIS IN ACTION: Chapter Quiz   365 ■ Discussion Questions  366 ■ Problems  367
CASE 11-1 Preston Manufacturing  374
AIS IN ACTION SOLUTIONS: Quiz Key   374

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 12 CONTENTS

PART III Accounting Information Systems Applications   377

CHAPTER 12 The Revenue Cycle: Sales to Cash Collections   378

Introduction  380
Revenue Cycle Information System   382
Process  382
Threats and Controls   382
Sales Order Entry   385
Taking Customer Orders   385
Credit Approval  388
Checking Inventory Availability  390
Responding to Customer Inquiries   391
Shipping  392
Pick and Pack the Order   393
Ship the Order   394
Billing  397
Invoicing  397
Maintain Accounts Receivable  399
Cash Collections  403
Process  403
Threats and Controls   404
Summary and Case Conclusion   406 ■ Key Terms  407
AIS IN ACTION: Chapter Quiz   407 ■ Discussion Questions  408 ■
Problems  408
CASE 12-1 Research Project: How CPA Firms Are Leveraging
New Developments in IT   417
AIS IN ACTION SOLUTIONS: Quiz Key   417

CHAPTER 13 The Expenditure Cycle: Purchasing to Cash

­Disbursements  420
Introduction  421
Expenditure Cycle Information System   422
Process  422
Threats and Controls   425
Ordering Materials, Supplies, and Services   428
Identifying What, When, and How Much to Purchase   428
Choosing Suppliers  431
Receiving  435
Process  435
Threats and Controls   436
Approving Supplier Invoices   437
Process  437
Threats and Controls   439
Cash Disbursements  441
Process  441
Threats and Controls   441
Summary and Case Conclusion   443 ■ Key Terms  444
AIS IN ACTION: Chapter Quiz   444 ■ Discussion Questions  445 ■
Problems  446
CASE 13-1 Research Project: Impact of Information Technology on Expenditure Cycle Activities,
Threats, and Controls   455
AIS IN ACTION SOLUTIONS: Quiz Key   455

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 CONTENTS 13

CHAPTER 14 The Production Cycle   458

Introduction  459
Production Cycle Information System   461
Process  462
Threats and Controls   462
Product Design  463
Process  463
Threats and Controls   465
Planning and Scheduling   465
Production Planning Methods   465
Key Documents and Forms   465
Threats and Controls   469
Production Operations  470
Threats and Controls   470
Cost Accounting  472
Process  472
Threats and Controls   473
Summary and Case Conclusion   478 ■ Key Terms  479
AIS IN ACTION: Chapter Quiz   479 ■ Discussion Questions  480 ■ Problems  481
CASE 14-1 The Accountant and CIM   485
AIS IN ACTION SOLUTIONS: Quiz Key   485

CHAPTER 15 The Human Resources Management and

Payroll ­Cycle  488
Introduction  489
HRM/Payroll Cycle Information System   490
Overview of HRM Process and Information Needs   490
Threats and Controls   492
Payroll Cycle Activities  495
Update Payroll Master Database   496
Validate Time and Attendance Data   497
Prepare Payroll  500
Disburse Payroll  503
Calculate and Disburse Employer-Paid Benefits, Taxes, and Voluntary
Employee Deductions  505
Outsourcing Options: Payroll Service Bureaus and Professional
Employer Organizations  505
Summary and Case Conclusion   506 ■ Key Terms  507
AIS IN ACTION: Chapter Quiz   507 ■ Discussion Questions  508 ■ Problems  509
CASE 15-1 Research Report: HRM/Payroll Opportunities for CPAs   515
AIS IN ACTION SOLUTIONS: Quiz Key   515

CHAPTER 16 General Ledger and Reporting System   518

Introduction  519
General Ledger and Reporting System   520
Process  521
Threats and Controls   521
Update General Ledger   523
Process  523
Threats and Controls   523
Post Adjusting Entries  527
Process  527
Threats and Controls   528

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 14 CONTENTS

Prepare Financial Statements   528

Process  528
Threats and Controls   533
Produce Managerial Reports   534
Process  534
Threats and Controls   534
Summary and Case Conclusion   539 ■ Key Terms  540
AIS IN ACTION: Chapter Quiz   540 ■ Discussion Questions  541 ■ Problems  541
CASE 16-1 Exploring XBRL Tools  546
CASE 16-2 Evaluating a General Ledger Package   547
CASE 16-3 Visualization Tools for Big Data   547
AIS IN ACTION SOLUTIONS: Quiz Key   547

PART IV The REA Data Model   551

CHAPTER 17 Database Design Using the REA Data Model   552

Introduction  552
Database Design Process   553
Entity-Relationship Diagrams  554
The REA Data Model   555
Three Basic Types of Entities   556
Structuring Relationships: The Basic REA Template   556
Developing an REA Diagram   559
Step 1: Identify Relevant Events   559
Step 2: Identify Resources and Agents   561
Step 3: Determine Cardinalities of Relationships   562
What an REA Diagram Reveals About an Organization   566
Business Meaning of Cardinalities   566
Uniqueness of REA Diagrams   567
Summary and Case Conclusion   568 ■ Key Terms  569
AIS IN ACTION: Chapter Quiz   569 ■ Comprehensive Problem  572 ■
Discussion Questions  572 ■ Problems  573
CASE 17-1 REA Data Modeling Extension   577
AIS IN ACTION SOLUTIONS: Quiz Key   578 ■ Comprehensive Problem Solution   582

CHAPTER 18 Implementing an REA Model in a Relational

Database  586
Introduction  587
Integrating REA Diagrams Across Cycles   587
Merging Redundant Resource Entities   590
Merging Redundant Event Entities   591
Validating the Accuracy of Integrated REA Diagrams   592
Implementing an REA Diagram in a Relational Database   592
Step 1: Create Tables for Each Distinct Entity and M:N Relationship   592
Step 2: Assign Attributes to Each Table   594
Step 3: Use Foreign Keys to Implement 1:1 and 1:N Relationships   595
Completeness Check  596
Using REA Diagrams to Retrieve Information from a Database   597
Creating Journals and Ledgers   597
Generating Financial Statements   598
Creating Managerial Reports   599
Summary and Case Conclusion   599 ■ Key Term  600

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 CONTENTS 15

AIS IN ACTION: Chapter Quiz   600 ■ Comprehensive Problem  601 ■

Discussion Questions  601 ■ Problems  602
CASE 18-1 Practical Database Design  604
AIS IN ACTION SOLUTIONS: Quiz Key   605 ■ Comprehensive Problem Solution   607

CHAPTER 19 Special Topics in REA Modeling   610

Introduction  611
Additional Revenue and Expenditure Cycle Modeling Topics   611
Additional Revenue Cycle Events and Attribute Placement   611
Additional Expenditure Cycle Events and Attribute Placement   613
Sale of Services   616
Acquisition of Intangible Services   616
Digital Assets  617
Rental Transactions  617
Additional REA Features   619
Employee Roles  619
M:N Agent–Event Relationships  619
Locations  619
Relationships Between Resources and Agents   619
Production Cycle REA Model   620
Additional Entities—Intellectual Property   620
Production Cycle Events   622
New REA Feature   622
Combined HR/Payroll Data Model   623
HR Cycle Entities   623
Tracking Employees’ Time  624
Financing Activities Data Model   625
Summary and Case Conclusion   626
AIS IN ACTION: Chapter Quiz   629 ■ Discussion Questions  630 ■ Problems  631
CASE 19-1 Practical Database Assignment  636
AIS IN ACTION SOLUTIONS: Quiz Key   636 ■ Appendix: Extending the REA Model to Include
I­nformation About Policies   640

PART V The Systems Development Process   643

CHAPTER 20 Introduction to Systems Development and Systems

­Analysis  644
Introduction  645
Systems Development  647
The Systems Development Life Cycle   647
The Players  648
Planning Systems Development   649
Planning Techniques  649
Feasibility Analysis  651
Capital Budgeting: Calculating Economic Feasibility   652
Behavioral Aspects of Change   654
Why Behavioral Problems Occur   654
How People Resist Change   654
Preventing Behavioral Problems   655
Systems Analysis  656
Initial Investigation  656
Systems Survey  657

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 16 CONTENTS

Feasibility Study  659
Information Needs and Systems Requirements   659
Systems Analysis Report  661
Summary and Case Conclusion   662 ■ Key Terms  663
AIS IN ACTION: Chapter Quiz   664 ■ Comprehensive Problem  665 ■
Discussion Questions  665 ■ Problems  666
CASE 20-1 Audio Visual Corporation  674
AIS IN ACTION SOLUTIONS: Quiz Key   675 ■ Comprehensive Problem Solution   678

CHAPTER 21 AIS Development Strategies   680

Introduction  681
Purchasing Software  681
Selecting a Vendor  682
Acquiring Hardware and Software   682
Evaluating Proposals and Selecting a System   683
Development by In-House Information Systems Departments   685
End-User-Developed Software  685
Advantages and Disadvantages of End-User Computing   686
Managing and Controlling End-User Computing   687
Outsourcing the System   688
Advantages and Disadvantages of Outsourcing   688
Methods for Improving Systems Development   689
Business Process Management   690
Prototyping  691
Agile Methodologies  693
Computer-Aided Software Engineering   696
Summary and Case Conclusion   697 ■ Key Terms  697
AIS IN ACTION: Chapter Quiz   698 ■ Comprehensive Problem Freedom from
Telemarketers—the Do Not Call List   699 ■ Discussion Questions  699 ■
Problems  700
CASE 21-1 Wong Engineering Corp.  704
AIS IN ACTION SOLUTIONS: Quiz Key   705 ■ Comprehensive
Problem Solution  707

CHAPTER 22 Systems Design, Implementation, and Operation   708

Introduction  709
Conceptual Systems Design   709
Evaluate Design Alternatives  709
Prepare Design Specifications and Reports   711
Physical Systems Design   711
Output Design  712
File and Database Design   712
Input Design  713
Program Design  714
Procedures and Controls Design   715
Systems Implementation  716
Implementation Planning and Site Preparation   716
Selecting and Training Personnel   717
Complete Documentation  718
Testing the System   718
Systems Conversion  719
Operation and Maintenance   720

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 CONTENTS 17

Summary and Case Conclusion   721 ■ Key Terms  722

AIS IN ACTION: Chapter Quiz   722 ■ Comprehensive Problem Hershey’s Big Bang ERP   723 ■
Discussion Questions  724 ■ Problems  725
CASE 22-1 Citizen’s Gas Company  730
AIS IN ACTION SOLUTIONS: Quiz Key   731 ■ Comprehensive Problem Solution   733

Glossary  734
Index  755

A01_ROMN0086_14_GE_FM.indd 17 05/05/17 11:33 AM

This page intentionally left blank
 Preface

To the Instructor
This book is intended for use in a one-semester course in accounting information systems at
either the undergraduate or graduate level. Introductory financial and managerial accounting
courses are suggested prerequisites, and an introductory information systems course that cov-
ers a computer language or software package is helpful, but not necessary.
The book can also be used as the main text in graduate or advanced undergraduate man-
agement information systems courses.
The topics covered in this text provide information systems students with a solid under-
standing of transaction processing systems that they can then build on as they pursue more in-
depth study of specific topics such as databases, data warehouses and data mining, networks,
systems analysis and design, cloud computing, virtualization, computer security, and informa-
tion system controls.

ENHANCEMENTS IN THE FOURTEENTH EDITION

We made extensive revisions to the content of the material to incorporate recent developments,
while retaining the features that have made prior editions easy to use. Every chapter has been
updated to include up-to-date examples of important concepts. Specific changes include:
1. We discuss the new revision to the COSO framework and have updated the discussion of
IT controls to reflect the new distinction between governance and management that was
introduced in COBIT 5.
2. Updated discussion of information security countermeasures, including the security and
control implications associated with virtualization and cloud computing.
3. Updated end-of-chapter discussion questions and problems, including Excel exer-
cises that are based on articles from the Journal of Accountancy so that students can
­develop the specific skills used by practitioners. Most chapters also include a problem
that consists of multiple-choice questions that we have used in our exams to provide
students with an additional chance to check how well they understand the chapter
material.
4. Many new computer fraud and abuse techniques have been added to help students under-
stand the way systems are attacked.
5. Chapter 21 includes a new section on agile development technologies that discusses
scrum development, extreme programming, and unified process development.

19

A01_ROMN0086_14_GE_FM.indd 19 05/05/17 11:33 AM

 20 PREFACE

SUPPLEMENTAL RESOURCES
As with prior editions, our objective in preparing this fourteenth edition has been to simplify
the teaching of AIS by enabling you to concentrate on classroom presentation and discussion,
rather than on locating, assembling, and distributing teaching materials. To assist you in this
process, the following supplementary materials are available to adopters of the text:
●● Solutions Manual prepared by Marshall Romney at Brigham Young University and Paul
John Steinbart at Arizona State University
●● Instructors Manual prepared by Robyn Raschke at University of Nevada–Las Vegas
●● Test Item File prepared by Lawrence Chui at University of St. Thomas
●● TestGen testing software, a computerized test item file
●● PowerPoint Presentation slides developed by Robyn Raschke at University of Nevada–
Las Vegas
The fourteenth edition includes an entirely new set of PowerPoint slides that make ex-
tensive use of high-quality graphics to illustrate key concepts. The slides do not merely con-
sist of bullet points taken verbatim from the text, but instead are designed to help students
notice and understand important relationships among concepts. The large number of slides
provides instructors a great deal of flexibility in choosing which topics they wish to empha-
size in class.
In addition, you can access all these supplements from the protected instructor area acces-
sible from www.pearsonglobaleditions.com/Romney.

To the Student
As did previous editions, the fourteenth edition of Accounting Information Systems is de-
signed to prepare you for a successful accounting career whether you enter public practice, in-
dustry, or government. All of you will be users of accounting information systems. In addition
to being users, some of you will become managers. Others will become internal and external
auditors, and some of you will become consultants. Regardless of your role, you will need to
understand how accounting information systems work in order to effectively measure how
cost-effectively they perform, to assess their reliability and that of the information produced,
or to lead the redesign and implementation of new and better systems. Mastering the material
presented in this text will give you the foundational knowledge you need in order to excel at
all those tasks.
This text discusses important new IT developments, such as virtualization and the move
to cloud computing, because such developments affect business processes and often cause
organizations to redesign their accounting systems to take advantage of new capabilities. The
focus, however, is not on IT for the sake of IT, but on how IT affects business processes and
controls. Indeed, new IT developments not only bring new capabilities, but also often create
new threats and affect the overall level of risk. This text will help you understand these issues
so that you can properly determine how to modify accounting systems controls to effectively
address those new threats and accurately assess the adequacy of controls in those redesigned
systems. We also discuss the effect of recent regulatory developments, such as the SEC man-
date to use XBRL and the pending switch from GAAP to IFRS, on the design and operation
of accounting systems.
In addition to technology- and regulatory-driven changes, companies are responding to
the increasingly competitive business environment by reexamining every internal activity in
an effort to reap the most value at the least cost. As a result, accountants are being asked to
do more than simply report the results of past activities. They must take a more proactive role
in both providing and interpreting financial and nonfinancial information about the organiza-
tion’s activities. Therefore, throughout this text we discuss how accountants can improve the
design and functioning of the accounting information system (AIS) so that it truly adds value
to the organization by providing management with the information needed to effectively run
an organization.

A01_ROMN0086_14_GE_FM.indd 20 30/05/17 1:01 PM

 PREFACE 21

Key Learning Objectives

When you finish reading this text, you should understand the following key concepts:
●● The basic activities performed in the major business cycles
●● What data needs to be collected to enable managers to plan, evaluate, and control the
business activities in which an organization engages
●● How IT developments can improve the efficiency and effectiveness of business processes
●● How to design an AIS to provide the information needed to make key decisions in each
business cycle
●● The risk of fraud and the motives and techniques used to perpetrate fraud
●● The COSO and COSO-ERM models for internal control and risk management, as well as
the specific controls used to achieve those objectives
●● The Control Objectives for Information and Related Technology (COBIT) Framework
for the effective governance and control of information systems and how IT affects the
implementation of internal controls
●● The AICPA’s Trust Services framework for ensuring systems reliability by developing
procedures to protect the confidentiality of proprietary information, maintain the privacy
of personally identifying information collected from customers, assure the availability of
information resources, and provide for information processing integrity
●● Fundamentals of information security
●● Goals, objectives, and methods for auditing information systems
●● Fundamental concepts of database technology and data modeling and their effect on an AIS
●● The tools for documenting AIS work, such as REA diagrams, data flow diagrams, busi-
ness processing diagrams, and flowcharts
●● The basic steps in the system development process to design and improve an AIS

Features to Facilitate Learning

To help you understand these concepts the text includes the following features:
1. Each chapter begins with an integrated case that introduces that chapter’s key con-
cepts and topics and identifies several key issues or problems that you should be able
to solve after mastering the material presented in that chapter. The case is referenced
throughout the chapter and the chapter summary presents solutions to the problems and
issues raised in the case.
2. Focus Boxes and real-world examples to help you understand how companies are using
the latest IT developments to improve their AIS.
3. Hands-on Excel exercises in many chapters to help you hone your computer skills.
Many of these exercises are based on “how-to” tutorials that appeared in recent issues of
the Journal of Accountancy.
4. Numerous problems in every chapter provide additional opportunities for you to dem-
onstrate your mastery of key concepts. Many problems were developed from reports in
current periodicals. Other problems were selected from the various professional examina-
tions, including the CPA, CMA, CIA, and SMAC exams. One problem consists of a set of
multiple-choice questions in order to provide practice in answering exam-style questions.
Each chapter also has one or more cases that require more extensive exploration of
specific topics.
5. Chapter quizzes at the end of each chapter enable you to self-assess your understanding
of the material. We also provide detailed explanations about the correct answer to each
quiz question.
6. Extensive use of Full-Color Graphics. The text contains hundreds of figures, diagrams,
flowcharts, and tables that illustrate the concepts taught in the chapters. Color is used to
highlight key points.

A01_ROMN0086_14_GE_FM.indd 21 30/05/17 1:01 PM

Another Random Scribd Document
with Unrelated Content
four thousand men, had been forced to surrender to the American
troops. No longer was it possible for England to make terms.
At home there was consternation, irresolution, and a sense of
deep resentment against the Government which had so blundered.
Chatham was a dying man, but he yet had something to say.
Weakness, irresolution, or fear were unknown words to him, even
though now he admitted—
"I tremble for this country; I am almost led to despair that we
shall ever be able to extricate ourselves."
On the 7th of April 1778 he lifted up his voice for the last time,
this time against an ignominious surrender, which the discomfited
Government, terrified by the action of France, were all too ready to
accept. Conscious himself of his fast-ebbing strength, Chatham, the
Imperialist minister of the eighteenth century, summoned all his old
fire and eloquence to his aid, and spoke with intense feeling,
rejoicing, he said, "that the grave had not yet closed on him,
pressed down as he was by the hand of infirmity."
Panic-stricken, the Government were inclined to offer absolute
independence to all the Colonies. Chatham vigorously opposed the
idea.
"His Majesty," he declared, "succeeded to an empire as great in
extent as its reputation was unsullied. Shall we tarnish the lustre of
this nation by an ignominious surrender of its rights and fairest
possessions? Shall this great kingdom, that has survived whole and
entire the Danish degradations, the Scottish invasion, the Norman
Conquest, that has stood the threatened invasion of the Spanish
Armada, now fall prostrate before the house of Bourbon? Shall a
people that seventeen years ago was the terror of the world, now
stoop so low as to tell its ancient and insatiate enemy, 'Take all we
have: only give us peace.' In God's name, if it be absolutely
necessary to declare for peace or war, and the former cannot be
preserved with honour, why is not the latter commenced without
hesitation? My Lords, any state is better than despair. Let us at least
make an effort; and if we must fall, let us fall like men!"
With this brave appeal Chatham sat down exhausted. A few
moments later he was carried fainting out of the House, which at
once adjourned. And within a month, he who has been described as
"the first Englishman of his time," had passed from the troubled
arena of politics.
 WILLIAM PITT FIRST EARL OF CHATHAM.

His monument in the Abbey shows him to us as he must often

have looked when, wearing his Parliamentary robes, he addressed
the House in that clear, sweet voice of his, which he could use with
such wonderful effect, and the sculptor has well caught the
expression of his fearless strength. Near him stand Prudence and
Fortitude; below is Britannia, Mistress of the Seas; and the
inscription tells how, under his administration, Great Britain was
exalted to a height of prosperity and glory, unknown in any former
age.
His second son, William, was born in 1759, the year that was
perhaps the most successful in his father's life, and as he was too
delicate to go to school, the older man personally supervised the
early education of this his favourite child. When quite small,
Chatham began to give him lessons in public speaking, making him
stand on a platform to recite poetry or speeches, and later on
teaching him to argue their points. With such a teacher and such a
ready pupil, it is not surprising to hear of excellent progress made.
Little Willy Pitt, as he was called, soon showed in which
direction his inclinations lay. "I am glad I am not the eldest son," he
remarked, when he was seven, "as I want to speak in the House of
Commons like papa."
He was only nineteen when his father died, but it was he who
had helped the old statesman to his place in the House of Lords on
the last day of his life, he who assisted to carry him out, and he who
stood as chief mourner at that impressive funeral in the Abbey, his
elder brother being abroad. The thought of any life but a political
and a public one, never entered his mind, and two years later he
became a member of Parliament. The first step up the ladder was
taken. Already a trained speaker, his gifts were at once recognised
by the House. Members of both parties generously praised him, and
prophesied that his would be a great career. "I doubt not," said
honest William Wilberforce, "but that I shall one day see him the
first man in the country." His likeness to his father was remarkable.
"Language, gesture, and manner were all the same," wrote his
delighted tutor. "All the old members recognised him instantly, and
most of the young ones said this was the very man they had so
often heard described."
But it was not on his father's merits that William Pitt sprang into
immediate fame; his own personality was his passport.
Thirteen years before, another young man had entered
Parliament, Charles James Fox, the brilliant, excitement-loving son of
Lord Holland. After Eton and Oxford he had been sent abroad to
complete his education, but so great were his follies and
extravagances, that his father had to firmly summon him home. This
mandate, we are told, "he obeyed with great reluctance," and he
seems to have gone back with an extensive wardrobe of clothes in
the latest and most costly fashions, leaving behind him enormous
debts in every town he had visited.
Lord Holland, who flattered himself that he had studied the
world and human nature with great attention and success, decided
that a seat in the House of Commons would best steady this
irrepressible young man, and provide him with occupation and
ambition, so, though he was only nineteen, and therefore legally not
entitled to become a member, he was duly elected, the Speaker, by
wilful or accidental oversight, offering no opposition. He too from the
first delighted the House as a speaker, for he was fresh, forcible, and
graceful, with a great personal charm of manner and an entire
absence of conceit, and no one gave a more cordial welcome to Pitt
than he did, little dreaming in how short a time this young man
would be his lifelong and his successful rival. Rockingham, who had
succeeded North as Prime Minister, died suddenly in 1782, and from
every point of view Fox appeared to be the man who ought to have
succeeded him. But the King cordially disliked Fox, and sent instead
for Lord Shelburne. Fox, ever impetuous and hasty, refused to serve
under him, and Shelburne turned to Pitt, who thus at the age of
twenty-three became Chancellor of the Exchequer and leader of the
House of Commons. A year later Lord Shelburne resigned, and the
Premiership was offered to Pitt, an honour greater perhaps than any
honour ever offered to a young man of twenty-four. He declined it;
the Duke of Portland accepted it; and Fox became leader in the
House of Commons, with what seemed to be a strong coalition
Government at the back of him. For the moment the Whigs were all-
powerful, and against them stood Pitt, who refused to be a member
of any coalition, with a handful of men who had belonged to the old
Chatham party. No one hated the present arrangement more than
the King, and before long he saw an opportunity of crushing it. Fox,
chiefly by his own magnetic influence, had carried a bill concerning
India through the Commons, but the Lords, influenced by the King,
threw it out, whereupon he dismissed the Government, and
persuaded Pitt to accept the office of Prime Minister. Never before
had such a state of things prevailed. The Premier was a youth of
twenty-four, with a majority of two to one against him in the House
of Commons! Whatever he brought forward was defeated. Fox used
all his eloquence against him, and over and over again he was put in
an impossible position. Pitt, Lord Rosebery has told us, was never
young. Certainly, at this crisis, his patience, his caution, his firmness,
and his cool judgment would have done credit to a statesman of half
a century's experience. He did not make a mistake, and gradually he
won the country to his side. Before many months were over,
Parliament was dissolved; an election had taken place; and Pitt came
back into power with a large majority. For seventeen years he
remained in office. Nothing could have been greater than the
contrast between him and his strenuous opponent Fox, who was the
most impulsive, genial, and lovable of men; extravagant in every
direction, in his likes, his hates, and his sympathies; easily stirred
and able to pour forth a torrent of passionate eloquence; living
always in the excitement and impulses of the moment, with never a
thought for the morrow. Pitt, on the contrary, was cool and
thoughtful. He stood, as it were, aloof from all the world, though on
the rare occasions when he unbent, he was full of charm. "Smiles
were not natural to him," said a contemporary. "He is," said
Wilberforce, who unfeignedly admired him, even though he could
not always follow him, "one of the most public-spirited and upright
men I ever knew." And he was called upon to guide the ship of State
through troubled waters. It was his task to raise the money in
payment of the American war bill, for a debt of about twenty millions
stared him in the face. Then he had to face more than the usual
amount of difficulty with Ireland, where the celebrated Dublin
Parliament which Henry Grattan, its brilliant leader, had forced Fox to
agree to, proved itself so unable to cope with the task undertaken,
that riots and disturbances broke out in every quarter. Pitt believed
that only one solution was possible, namely, that instead of a
separate Parliament at Dublin, the Irish members with the Scotch
should sit at Westminster, and in the year 1799 he brought in the Act
of Union, which was carried during the next session, in spite of a
strong speech against it by Grattan, who was dragged from his sick-
room for the occasion. Pitt had also to contend with a restless wave
which swept over England, the result of the French Revolution. But
though the young minister was always ready for reform, he would
have nothing to do with violent changes or with revolution, neither
was he afraid to bring in such measures as seemed likely to repress
the revolutionary spirits in England. The French leaders, not content
with having executed their king and queen, and having waged war
on Austria, when that country moved to rescue the luckless Austrian
princess, now Queen Marie Antoinette, went to the further length of
declaring that every country not agreeing with the doctrines of the
Revolution was to be regarded as an enemy, and was to be forced
into war. For some while Pitt managed to hold the English people
from plunging into the conflict. He was altogether a peace minister.
But public opinion was too strong for him; the old hatred of France
was there, and the events of the last few years had fanned it into
life. Pitt had to bow to the will of the nation, though it was the
French who finally declared war in 1793 by an attack on Holland,
after which England could no longer stand aloof, though Fox, in his
hot-headed way, declared that in his opinion we had no right to
demand the withdrawal of French troops from the Netherlands. From
that time until the day of victory at Waterloo in 1815, the fight
between England and France continued with more or less intensity.
And the final issue was due in no small degree to Pitt, who,
though he hated the war, had during his long ministry of peace
freely spent millions of pounds on the British navy, recognising that
so long as England was mistress of the seas she was safe. From the
moment, too, that war was declared, he threw himself heart and
soul into every measure for carrying it through successfully; never
for a moment did he show a weak front, or fail to be the leader in
every sense of the word. When Napoleon, elated by his series of
triumphs on the Continent, prepared to invade England, it was Pitt
who gave an impetus to the volunteer movement by himself raising
a force of 3000 men, and placing himself at their head. "His spirit
will lead him to be foremost in the battle, and I am uneasy at it,"
said Wilberforce; "yet it is his proper post, and I can say nothing
against it." In an incredibly short time a volunteer force of 300,000
was enrolled, "their good sense and firmness supplying their want of
experience." But though his spirit was as strong as ever, his delicate
frame was giving way under the high pressure at which he had lived.
True to his promise to Wilberforce, he had pushed forward the
Abolition of Slavery Bill, and he did not relax an effort as regards his
war policy, though on the Continent Napoleon was still all victorious.
Wellesley, a young soldier, had just come back from India with a
good reputation, and Pitt, then a dying man, sent for him. He knew
that what England wanted now was a great soldier to lead her
armies; her navy was safe under such commanders as St. Vincent,
Collingwood, and Nelson. For hours he talked to Wellesley, only
ceasing when he fainted from exhaustion. "The greatest minister
that has ever ruled England," was the verdict of the soldier
statesman. Then came the news of the victory at Trafalgar,
saddened only by the death of the heroic Nelson. But Pitt was
drifting far away from all these things. His mind wandered as his life
flickered out; only just at the end there was a rally. "Oh my country!"
he cried; "how I leave my country!" That was his last thought and
his last speech.
When the usual proposal was brought forward that he should be
buried at Westminster at the expense of Parliament, and that a
monument should be erected, Fox characteristically felt bound to
oppose it. "He could not honestly," he said, "call a man an excellent
statesman who had consistently supported so bad a system." But
when it was further suggested that Parliament should pay the debts
he had left and provide for his nearest relations, no one agreed so
cordially or so readily as Fox. Wrong-headed he often was; wrong-
hearted never.
Into the same grave as his father William Pitt was laid in the
presence of all the distinguished people of the day, his pall-bearers
being six men each of whom had been, or was to be, a Prime
Minister of England. "The figure of the first William Pitt," wrote
Wilberforce, "seemed to be looking down with consternation into the
grave of his favourite son, the last perpetuator of the name he had
ennobled. It was an affecting ceremony."
Pitt was still a young man, only forty-seven, yet into those years
he had crowded a glorious life, and it was with truth that the herald
proclaimed over his grave, "He lived not for himself, but for his
country."
Eight months later, Fox, who did not live to enjoy the power his
rival's death had placed within his reach, was buried close to him in
the Abbey. During his short spell of office, he had carried
Wilberforce's Slave Bill, and had frequently said he could retire
happily when once that bill was made safe. He disdainfully refused a
Peerage. "I will not close my politics in that foolish way," was his
remark. Near together too, though not in the Statesmen's Corner,
are the monuments of these two whose lives were throughout so
interwoven. Pitt towers in lonely state over the west door, standing
there as if he were about to pour forth his magnificent eloquence on
the statues below and charm them back into life for one brief
moment. Fox lies surrounded by weeping figures, one of whom
represents the negro whose cause he had so powerfully
championed. And so the great Mother Church gathers them both to
herself, claiming each as a noble son of England.
Henry Grattan, the Irishman, is buried close to Fox, his friend
and hero. He had often told his followers that he wished to lie in a
quiet churchyard of his loved Ireland, but they had other ideas. "Well
then," he said resignedly, "Westminster Abbey!" His funeral had a
very distinctive touch, for it was attended by hundreds of Irish
children from various charitable institutions, all of whom wore
dresses of bright green.
Next to the imposing monument of Chatham is a statue to Lord
Palmerston, that most English of statesmen. He went into political
life more from a sense of duty than from any particular liking for it,
or from any feelings of ambition. But into every office that he held
he carried with him a sturdy independence, a dogged tenacity of
purpose, a fund of common sense, and a very clear idea of what he
meant to attain. Add to this that he was the essence of good-nature,
the most genial of friends, simple and straight, manly and cheery,
and we have some idea of the man whom the nation insisted on
having for Prime Minister, when he was over seventy years of age, at
a critical moment when it was felt that only a strong, fearless,
popular statesman could guide the ship out of the storm.
And then, in contrast to the kindly, contented Palmerston,
comes the tomb of Lord Castlereagh, a statesman as much out of
touch with the people as "Pam" was their hero. He was Secretary of
State for War in those days when the struggle with France was
beginning, and because at first things went badly he was made the
scapegoat. It was he who planned that combination of forces which
at last broke down the French resistance, but that was not realised
till long afterwards; in those early days his policy was not successful,
so it was unpopular. He stood aloof from all men; he was cold,
indifferent, wanting in tact, with no gifts as a speaker, and yet,
looking back now on his work, it is easy to see how well he faced a
period of unexampled difficulty. Nevertheless, he was invariably
misunderstood, and therefore unjustly disliked, so that at last his
mind gave way under the storm of hatred and abuse levelled against
him, and, in a dark moment, he put an end to his life. Even at his
funeral in the Abbey, the crowds could not forget their dislike of him,
and shouted exultantly as the coffin was carried inside the doors.
But the Abbey gave him a welcome and a resting-place.
On the opposite side stand the statues of the three Cannings:
George Canning, the statesman; his youngest son, Lord Canning,
first Viceroy of India; and their cousin, Lord Stratford de Radcliffe,
"the wise old man of the East," who was our ambassador at
Constantinople during those years which led up to the Crimean War,
and whose influence, supported by the Government at home and
France, made it possible for Turkey to hold Russia at bay. The verse
on the statue:

"Thou third great Canning, stand among our best

And noblest, now thy long day's work hath ceased;
Here silent, in our Minster of the West,
Who wert the voice of England in the East,"
is the work of Tennyson, who has only written one other epitaph in
the Abbey. Close together are the monuments of Sir Robert Peel and
Benjamin Disraeli, Earl of Beaconsfield. Peel was the Minister who, in
the face of violent opposition, caused the tax on imported corn to be
repealed, thereby making bread cheaper; and Disraeli, who first won
his reputation by the persistent manner in which he fought this
policy of Peel's, doggedly forged his way to the front against much
prejudice, until he, though not an Englishman by race, held the
proud position of being the loved and trusted Prime Minister of
Queen Victoria. The statue of Beaconsfield—for by his own desire he
was buried next to his wife in the country churchyard at Hughenden
—casts its shadow over the grave of William Ewart Gladstone, whose
family only consented to his being laid there on the condition that
Mrs. Gladstone should eventually rest beside him, even as Lady
Palmerston lay by her husband's side. The coffin which contained
this old statesman, who was better loved and better hated perhaps
than any public man of our generation, was placed for some time in
Westminster Hall, and nearly a quarter of a million people passed
through to pay their last token of respect. The time has not yet
come when his place in English history as a statesman can be fairly
judged, but friend and foe alike can bear tribute to his brilliant
intellect; his talents as a financier; his excellent learning; his
wonderful personality; his rich eloquence; his generous sympathies;
his stainless private life; and to those other qualities which his
political opponent Lord Salisbury so finely described as making him
"a great Christian." "God bless you, and this place, and the land you
love," had been his last public utterance, and in the spirit of that
message we leave him, who in life stirred up such sharp dissensions,
sleeping peacefully in the Abbey.

CHAPTER XX
INDIAN STATESMEN AND SOLDIERS: LAWRENCE
AND THE HEROES OF THE MUTINY

The Indian Mutiny, which produced "such a breed of warlike men,"

the equals of whom have rarely, if ever, been found awaiting their
country's need of them, is especially commemorated in the Abbey,
which holds the graves of Lord Lawrence; Colin Campbell, Lord
Clyde; and Sir James Outram. Only a monument does honour to
Warren Hastings, whose name is so indissolubly linked with
Westminster and with India, for it was at Westminster School that he
was educated, the favourite pupil of the head-master Dr. Nichols,
who found him "a hard student, bold, full of fire, ambitious in no
ordinary degree;" and it was to India that he went, when eighteen,
into the service of the East India Company. To the building up of the
British Empire in India he gave his life, working with unfaltering
courage under a thousand difficulties, sometimes no doubt making
errors of judgment, more often the victim of other men's intrigues
and treachery, but always the dauntless, enthusiastic servant of the
State. And his reward was disgrace, confiscation, and impeachment.
He was used by Ministers at home as a cat's-paw in the game of
politics. Burke and Fox charged him in Parliament with cruelty,
extortion, and corruption, while Sheridan's brilliant eloquence so
dazzled the Commons as to obscure all their calm judgment, and
they impeached Warren Hastings at the bar of the House of Lords
for "high crimes and misdemeanours." In the February of 1788 this
most famous of trials commenced in Westminster Hall, and it took
Burke two days to get through his list of charges. All the force of his
great powers as an orator was brought to bear against the accused,
who "stood there small, spare, and upright, his bearing a mixture of
deference and dignity, his soft sad eyes flashing defiance on his
accusers; the lines of his mouth and chin firm, his face very pale but
calm."
The trial lingered on and on; it was seven years before the
verdict was given, a verdict which practically cleared Hastings, and
proved that, if on occasions he had been unnecessarily ruthless or
hard in his rule, he had not so acted from any selfish or unworthy
motive, but because he believed that thereby he was best serving
the interests both of England and of India. Though he was
acquitted, he was practically a ruined man. The trial had cost him
more than £70,000, and he was not rich, neither could he hope for
any employment under Fox or Pitt. The East India Company voted
him a pension for twenty-eight years, but refused him when he
asked that it might be continued during the lifetime of his wife, "the
dearest object of all his concerns." And so he died a bitterly
disappointed man.
 RT. HON. WARREN HASTINGS.

John Lawrence was the son of a soldier, and from boyhood he

had chosen the army for his profession, as a matter of course. Three
of his brothers had already gone to India, two into the cavalry, and
one into the artillery, and John was hoping to enter the service of
the East India Company in the same way, when to his disgust he
was offered an appointment, not in their army, but in the Civil
Service. There could be no question as to which of the two branches
offered the better opening to any hard-working, ambitious young
man, but John would hear none of this. "A soldier I was born, a
soldier I will be," he said firmly. And he was only moved in his
resolution by the simple, sensible arguments of his invalid sister
Letitia, to whom he was entirely devoted. So to the East India
College at Haileybury he went, and sailed for India at the age of
eighteen, considered by his elders to be a reliable, intelligent lad,
but nothing more. The old longing for a soldier's life came back to
him on landing, and for the first few weeks he was so entirely
miserable, that, as he said afterwards, "the offer of £100 a year
would have taken me straight home again." Then he firmly pulled
himself together and resolved that there should be no turning back
now; he would go forward, and do the work which came to him with
all his might. Delhi was his first destination, and soon he found
himself in charge of a district, so good a reputation had he made for
being both self-reliant and cautious. It was a turbulent, unsettled
piece of country that he was given to bring into order, but his
firmness, justice, and conscientious hard work accomplished
wonders, and prepared him for greater things. Without a single
soldier he kept perfect order among his people through the great
drought, which filled his district with starving men and with bands of
robbers, but at last his health gave way under the strain of eleven
years' work, and he came home to England on sick leave. Two years
later he returned to his post, now a married man, and was soon
brought into close contact with that sturdy soldier, Sir Henry
Hardinge, who was in command of the fierce campaign then being
waged against the Sikhs. Hardinge entirely depended on being able
to get sufficient supplies, guns, and ammunition from the base at
Delhi, and it was to the civilian magistrate there, John Lawrence,
that he appealed for help. Splendidly that help was given. Lawrence
organised a system of carts, each to be driven by his owner; and in
an incredibly short time a long train of guns, ammunition, and food
of all sorts, reached the camp, as much to the delight as to the
astonishment of the General. A few days after the arrival of these
welcome supplies, the battle which ended the campaign was fought
and won. Hardinge did not forget the man who had made this
victory possible, and gave him for reward a most responsible piece
of work, the charge of the newly won Sikh province of Jalandhar.
A second Sikh war, which ended in the complete submission of
the Sikh army, gave the whole province of the Punjab into the hands
of the Viceroy.
"What shall we do with it?" he asked of Lawrence.
"Annex it at once," was the answer; and when Lord Dalhousie
pointed out the difficulties, Lawrence, who had known and realised
them all, met every objection with the words: "Action, action,
action!"
So the Punjab was annexed, and it was decided to govern it by
a Board, which included Henry Lawrence and John Lawrence.
Frankly, let us admit at once that the arrangement was not a happy
one. Both brothers were men of strong character and great ability,
but they saw things from very different points of view. Henry was
enthusiastic, imaginative, and easily moved; John was entirely
practical and clear-headed. Each loved and respected the other, but
neither would give way on what seemed to each vital questions of
importance. Finally, both sent in their resignations, and Lord
Dalhousie, wisely recognising that John Lawrence was specially fitted
for the special work required at the moment in the Punjab, made
him the Chief Commissioner, and moved Henry to another field. It
was a great province to reduce to law and order, even when it was
divided into seven districts, ruled over by picked men. But Lawrence
was a born organiser. Not only could he work himself indefatigably,
but he knew how to choose other men for the posts that had to be
filled, and having chosen them, he trusted them and supported them
loyally. He had only to recognise "grit," or "metal," in a subordinate,
and there was nothing he would not do to help him on. "Human
nature is human nature," he would say, and "A strong horse if held
with a tight hand will do more than a weak horse to whom you may
give his head." So he managed to keep his brilliant colleagues all in
one team; he smoothed over their disagreements, he dealt with
them all quite frankly, criticising where he held it needful, praising
generously whenever it was possible, and thus he gathered around
him that band of men, including Nicholson, Chamberlain, and
Edwardes, who came to the fore so vigorously a little later in the
hour of the crisis. But Lawrence was to do still greater things in the
near future.
A year later saw the outbreak of the Mutiny, which came as a
thunderbolt to the British Government in India. The first rising,
terrible in its suddenness, was at Meerut, where a maddened crowd
of sepoys, thirsting for the blood of all Europeans, seized the arms
and ammunition, released their prisoners, murdered whoever
resisted them, and then made for Delhi, at which place all the rebels
from the country round were assembling. Within Delhi, the native
regiments joined the mutineers; Europeans were ruthlessly
massacred, and though the tiny garrison made a magnificent
defence, expecting every hour to be relieved by a strong British
force, they at last had to realise that resistance was useless and that
each one must escape for his life as best he could.
To Lawrence, just starting for his holiday, came the well-known
message from Delhi, "The sepoys have come in from Meerut, and
are burning everything. We must shut up," followed by a second
telegram which told that Delhi was in the hands of the rebels.
Strange to say nothing was being done from Meerut, where there
was a fairly large force of British troops, to avenge the murderous
outbreak.
John Lawrence, however, was a man of action, and his younger
colleagues were not a whit less determined. At all costs Delhi must
be regained—that was the first move unanimously agreed on; but
every hour's delay meant danger, for each day brought recruits to
the rebels, and the disarming of the doubtful native troops must be
carried out at once if it were not to be too late. Lawrence had a
twofold task. He must make safe and hold secure for England the
Punjab, that vast inflammable province containing more than thirty
thousand sepoys, for which work he knew he could rely on
Chamberlain, Nicholson, and Edwardes; but more than this, he must
put forth every power to assist in the retaking of Delhi. When at last
an army of about three thousand men took up their stand on a ridge
outside Delhi, they knew that within the walls of the city at least a
hundred thousand foes awaited them, with numbers of guns and an
unlimited supply of ammunition. Overwhelming indeed were the
odds against them. But one fact gave them confidence. Behind them
lay the road leading to the Punjab and to the man whom they knew
would send along it, to their help, his best officers, his best troops,
ample supplies and ammunition, who would never cease watching,
working, and urging until once more the British flag waved over
Delhi.
For twelve weary weeks the struggle waged, and Lawrence
strained every nerve. The position in the Punjab was highly critical;
only the ceaseless vigour of its Chief Commissioner, and his strong,
fearless policy, held in check the rebellion all ready to break out. Had
the Punjab failed, nothing but disaster could have overtaken the
Delhi Field Force. But John Lawrence never doubted, never
despaired, even when there reached him the appalling news of the
Cawnpore massacre, followed by the tidings from beleaguered
Lucknow, where Henry Lawrence had fallen at his post with the
dying request that on his tomb might be recorded the words: "He
tried to do his duty."
At last the tide turned. Delhi was saved, and though all was not
yet won, Lawrence knew that the crisis was over. But that moment
was clouded, for the man who, above all others, had brought about
the capture of Delhi, was no more. John Nicholson had fallen in the
proudest hour of his life, and when the news came to Lawrence he
completely broke down.
"He was a glorious soldier," he said. "He seems to have been
specially raised up for this juncture, and so long as British rule shall
endure in India his fame shall never perish; without him, Delhi could
not have fallen."
It was a generous tribute and a just one. But we must never
forget that behind John Nicholson was John Lawrence.
"Not a bayonet or a rupee has reached Delhi from Calcutta or
England," wrote Edwardes. "It has been recovered by Lawrence and
his resources. Honour, all honour to Coachman John, and honour,
too, to the team that pulled the coach. He alone was at the helm,
and bore all the responsibility on his own shoulders"!
The district of which Delhi was the capital was at once handed
over to the Punjab Government, and Lawrence hurried thither in a
mail-cart, that law and order might be restored without delay. His
policy was just what might have been expected of him—a generous
combination of strength, mercy, and justice; and within six months
he was able to report that "perfect order reigned throughout the
Delhi territory."
It was just at this juncture that Colin Campbell arrived in India
as Commander-in-Chief.
"When will you be ready to start?" Lord Palmerston had asked
him in offering the command.
"To-morrow!" said the soldier promptly. And on the morrow he
started.
He had distinguished himself in the Crimea. There he had held
the command of the Highland Brigade, a post of all others for which
he was fitted. A Highlander himself, he perfectly understood how to
handle the men of his own race, and the advance on the Alma was
splendidly made by his troops, who exhibited such rare courage
combined with perfect coolness that when Lord Raglan rode up to
compliment their commander, "his eyes filled with tears and his
countenance quivered."
"The army is watching you, make me proud of the Highland
Brigade," Campbell said to his men on the day of Balaclava.
"Remember," he added, "there is no retreat from here! You die
where you stand."
"Aye, aye, Sir Colin; we'll do that!" was the answer.
 Rarely has a more touching farewell order been issued than that
from Campbell to his men, when at the end of the campaign he was
about to return to England. Part of it ran thus:—
"A long farewell! I am now old, and shall not be called to serve
any more; and nothing will remain to me but the memory of my
campaigns, and the memory too of the enduring, hardy, generous
soldiers with whom I have been associated.... When you go home
you will tell the story of your immortal advance up the heights of
Alma, and you may speak of the old brigadier who led you and who
loved you so well.... And the bagpipes will never sound near me
without carrying me back to those bright days when I was at your
head and wore the bonnet you gained for me, and the honourable
decorations on my breast, many of which I owe to your conduct.
Brave soldiers, kind comrades, farewell!"
But the old soldier had not done yet, and he promptly left
England for India, where he arrived at the darkest hour, before the
fall of Delhi, and when Havelock had been foiled in his brave attempt
to relieve Lucknow.
Sir Colin and John Lawrence were old friends, and the
Commander-in-Chief at once wrote: "It will be a matter of real
gratification to me if we exchange our plans and ideas from time to
time.... I am thankful you were in the Punjab to face the storm."
The chief concentrated all his energy on bringing order and
organisation out of chaos at Calcutta, so that efficient
reinforcements, properly equipped, might be speedily got together,
and meanwhile Outram went to the assistance of Havelock. "Outram
is a fine soldier and a fine man," Lawrence had written of him
affectionately, and this "Bayard of India, who had served that
country for forty years in war and council," as it is recorded in the
Abbey, showed himself full worthy of the highest praises that could
be bestowed on him. When he reached Cawnpore with
reinforcements which would make possible the relief of Lucknow, he
refused, though the senior officer, to take the command. Havelock
had borne the heat and burden of the day, Havelock must be the
hero when the hour of victory was at hand. "I cheerfully waive my
rank and accompany the force to Lucknow, tendering my services to
Brigadier-General Havelock as a volunteer," he said, with a fine
chivalry which was characteristic of one "who ever esteemed others
better than himself, who was valiant, self-denying, and
magnanimous—in all the true knight!" The column forced its way
into Lucknow, but even so, it was impossible to fully relieve the
garrison. Once inside the walls Outram took over the command, and
made the best of the position directly he realised that for the present
he could only reinforce, not relieve. But Colin Campbell was on his
way with the army of about five thousand men which he had
collected after great efforts. A miscellaneous force indeed it was:
Lancers, Sikhs, Punjab infantry, the Queen's, and the 93rd
Highlanders, which the Commander-in-Chief had formed up, so that
he might address them, and the Highlanders burst into cheers at the
sight of their beloved General.
"You are my own lads," he said to them; "I rely on you to do
yourselves and me credit."
"Aye, aye! Sir Colin," answered a voice from the ranks; "ye ken
us, and we ken you. We'll bring the women and bairnies out of
Lucknow, or we'll leave our ain banes there!"
 Magnificently they kept their word. When it came to the last
assault, Sikhs and Highlanders positively raced with each other to be
first through the breach, and seemed impervious alike to the heavy
fire poured on them, or the desperate hand-to-hand struggle. Over
five hundred killed and wounded made up their casualty list; but the
women and the bairnies were saved. And though Sir Colin longed to
make a second decisive attack on the enemy, he held back with
great self-control, deeming it his first duty to withdraw all the sick
with the women and children in safety to Alumbagh, a feat difficult
enough under any circumstances, and requiring all his available
troops. Hardly had he accomplished this than news came that
Cawnpore, with its tiny garrison, was once more surrounded by the
enemy, and was, so the message said, "at its last gasp."
"How dare you say of her Majesty's troops that they are at their
last gasp," thundered the chief. And forthwith made for the
entrenchments, where his very presence saved the situation.
 WEST TRANSEPT.

All this while John Lawrence had not relaxed his efforts, and just
at this moment he sent the welcome intelligence to Sir Colin that he
had three thousand cavalry and twelve guns waiting for him. With
those and other welcome reinforcements the chief was able to make
his final attack on Lucknow, which continued fiercely during nineteen
days, but which ended in complete victory for the British troops,
though they were but a force of 30,000 against 120,000 of the
rebels. With the fall of Lucknow the burning flames of the Mutiny
may be said to have been extinguished; what remained was the
smouldering of the fire. To Sir Colin the Queen wrote an autograph
letter which thrilled him with pride, part of which ran thus:—
 "The Queen has had many proofs already of Sir Colin Campbell's
devotion to his Sovereign and his country, and he has now greatly
added to the debt of gratitude which both owe him. But Sir Colin
must bear one reproof from his Queen, and this is, that he exposes
himself too much. His life is most precious, and she entreats that he
will neither put himself where his noble spirit would urge him to be—
foremost in danger—nor fatigue himself so as to injure his health."
A little later her Majesty signified her intention of conferring on
him a peerage.
"We dinna ken hoo tae address ye, Sir Colin, now that the
Queen has made ye a lord!" said one of the Highlanders sadly.
"Just call me Sir Colin, John, the same as in the old times: I like
the old name best," was the answer.
Although Lucknow was taken in the March of 1858, it was more
than two years before Sir Colin Campbell was able to return to
England, having finished his work; and then after three years spent
at home, surrounded by "honour, love, and troops of friends," the
old warrior passed away from the battle-field of life.
Lawrence, now a baronet, and greatly worn out by the heavy
strain he had been through, had reached England in 1859, where he
found the British public eager to shower honours on one whom they
held to be the saviour of India. His great modesty led him to shrink
from it all.
"If I was placed in a position of extreme danger and difficulty,"
he declared, "I was also fortunate in having around me some of the
ablest civil and military officers in India. And I hope that some
rewards will be extended to those who so nobly shared with me the
perils of the struggle, and by whose aid my efforts were crowned
with success."
He settled down to work as a member of the Council of India,
and Lord Derby, then at the India Office, was deeply impressed not
only by his great ability but by his "heroic simplicity." "Even if his
opportunity had never come," he declared, "you would always have
felt that you were in the presence of a man capable of accomplishing
great things, and capable also of leaving the credit of them to any
one who chose to take it."
The death of Outram was a great sorrow to Lawrence, and he it
was who went to the Dean to beg that his old friend should be
buried in the Abbey, as the one place worthy of him. He too made all
the arrangements for the funeral, and it was at his suggestion that
the sergeants of Outram's old regiment carried their beloved leader
to his grave.
Quite unexpectedly the Government called on him to return to
India as Viceroy, and though he would far rather have remained in
England, he felt that he ought to go. To him the call of duty was
ever the one call to which the heart of every true man must
unfailingly respond. His appointment was for five years, and during
this time he remained at his post, carrying out the policy of his life,
by which he desired "to avoid complications, to consolidate our
power in India, to give to its people the best government we can, to
organise our administration in every department on a system which
will combine economy with efficiency, and so to make our
Government strong and respected."
"I do not wish to shorten my term of office, nor do I wish to
prolong it," he said in answer to the question as to what his feelings
were now that he was about to deliver over the government of the
country.
"It was a proud moment for me," he added, "when I walked up
the steps of this house, feeling that without political interest or
influence I had been chosen to fill the highest office under the
Crown, the Viceroy of the Queen. But it will be a happier moment for
me when I walk down the steps with the feeling that I have tried to
do my duty."
On his return home he was made a peer, and for some years he
devoted himself untiringly to public and philanthropic work, acting as
Chairman to the London School Board until his failing eyesight and
his broken health put an end to his public life. "It is overpowering to
see him thus laid low and worn out," wrote one who saw him daily.
"But to us he seems grander than ever in his affliction, and we
realise the truth that 'he who ruleth his spirit is greater than he who
taketh a city.'"
Ten years after he had left India the end came, and Honest
John, as he was affectionately called, was carried to the Abbey, to
be buried there with all the honour that was his due.

CHAPTER XXI
DICKENS, BROWNING, AND TENNYSON

It is impossible to wander round the Poets' Corner without a longing

that the Abbey could claim as her own all the great singers and
seers who have made the literature of our country. Chaucer and
Spenser indeed we have, with other writers of the Elizabethan and
Stuart periods; but many familiar names are missing altogether, or
marked only by a bust or slab. John Philips, Matthew Prior, John Gay,
and Thomas Campbell—these were the last poets buried in
Westminster for many a long day. Shakespeare, Milton, Goldsmith,
Coleridge, Burns, Keble, Wordsworth, Thackeray, Matthew Arnold,
Kingsley, Ruskin, have monuments, and so we have their names; but
how many a one is there for whom we look in vain in this national
temple of honour. Langland, Herrick, Herbert, Sidney, Pope, Byron,
Shelley, Keats, Bunyan, Sir Thomas More, Defoe, and Swift are
unknown English writers so far as the Abbey is concerned.
Towards the latter end of the nineteenth century, however, there
came a change. Macaulay and Grote, historians, were both buried
within its walls, and when Charles Dickens died in 1870, Dean
Stanley at once suggested Westminster to his family, who declined
the offer. Then there appeared an article in the Times declaring that
the Abbey was the one place worthy to receive so distinguished a
writer. Still his family hesitated, and at last only consented on the
condition that the ceremony should be entirely private. So it came to
pass that, one evening after dark, when the Abbey was closed, a
grave was dug in the Poets' Corner close to Thackeray's bust, and in
the early summer morning the funeral took place in solitary
simplicity. But in a few hours the news had spread, and before the
day was over thousands of persons had been to take a last look at
the grave of the writer they loved, many of them the very poorest
people, who yet brought with them a few flowers or some other
humble token of remembrance.
 There was no aspect of their life he had not understood and
sympathised with, for his boyhood's days had been spent in their
midst. His father, unable to pay his debts, had been cast into prison
at Marshalsea, so the Dickens family had settled in the
neighbourhood, little Charles supporting himself by pasting labels on
to blacking-pots, and making the acquaintance of all those queer
people and odd characters with whom his writings have taught us to
be familiar. "David Copperfield" is to a great extent an autobiography
of Charles Dickens himself, who started life "a prey to the cruel
chances of the London streets, and who, for all the care that was
taken of him, might easily have become a little robber or vagabond,
but for the mercy of God," to use his own words. However, brighter
days were in store for him, for the elder Dickens managed to get
clear of his debts and became Parliamentary reporter to the Morning
Herald; and Charles, after a few years at school, during which he
had managed to learn as much as was possible, decided to take up
newspaper work, though in many ways stage life was what attracted
him most. "I was always an actor and a writer from a mere baby,"
he said.
Fortunately regular work was offered him on the staff of the
Morning Chronicle, and before long he had made his name as the
"best Parliamentary reporter in the Peers' Gallery." From
henceforward he determined that writing should be his career, and
under the name of Boz he launched a book of Sketches, "illustrating
everyday life and everyday people," into the world. The sketches
were just what they claimed to be, but it was a master-hand that
had drawn them, and these everyday people were described with
such a perfect touch that the general public, delighted and greatly
entertained, at once set the young author on a pedestal of
popularity.
The "Pickwick Papers," which followed shortly afterwards,
increased his reputation and established his position. Here was a
writer bubbling over with a fresh, keen sense of humour, and in
every page of his book the humour came out, never strained or
forced, always natural, kindly, and infectious. From "Pickwick" he
turned to quite a different style, for in "Oliver Twist" he gave to the
world a brilliant picture of the "dregs of life." The subject was sad
enough, and Dickens, before all things a truthful writer, did not seek
to conceal anything, and yet so wonderful was his sympathy with all
humanity, even the most degraded, that he never failed to recognise
goodness and nobleness however deep down they might be hidden
away. He saw below the surface, and in all that he wrote he forced
his readers to think the better of mankind. Dickens went on from
one success to another; he thoroughly understood his public and his
own line, and his great heart was so full, so responsive, so in tune
with the tender emotions which belong to all men and women in
common, that he never grew stale or dull. Master alike of pathos
and of humour, he appealed direct to the hearts of his readers.
"Nicholas Nickleby," "The Old Curiosity Shop," "Martin Chuzzlewit,"
"The Christmas Books," "Dombey & Son," "David Copperfield,"
"Bleak House," and "The Tale of Two Cities," in their turn won for
him countless friends and admirers from every class of life in
England and in America, for all his characters were living people, and
though he never moralised or lectured, he always purified and
uplifted.
 "Do not harden your hearts," was his message to the world.
"Sympathise, pity, help, understand, love. Laugh if you will, so long
as you laugh not in scorn; but love always, love everywhere."
A gravestone in Westminster is his only monument there, but
that was by his own desire. To a great crowd assembled in the
Abbey on the Sunday after his funeral, Dean Stanley read aloud
these words from his will, "sacred words," he said, "which come with
a new meaning and a deeper force, because they come from the lips
of a lost friend, because they are the most solemn utterance of lips
now for ever closed in the grave":—
"'I direct that my name be inscribed in plain English letters on
my tomb.... I conjure my friends on no account to make me the
subject of any monument, memorial, or testimonial whatever. I rest
my claims to be remembered of my country upon my published
works, and to be remembered of my friends upon their experience
of me in addition thereto.... And I exhort my dear children humbly to
try to guide themselves by the teaching of the New Testament in its
broad spirit, and to put no faith in any man's narrow construction of
its letter here or there.'"
It was in this "broad spirit" of Christ's Teaching that Dickens
lived and wrote. He tore down the veil that hid the lives of the poor
and suffering from the lives of the rich and prosperous. The
remembrance of those dark sights and scenes of his boyhood never
passed away from him. "They pierce through my happiness, they
haunt me day and night," he said. He could never rest till he had
lifted up his voice in the cause of those "little ones" whom he loved
and in whom he could recognise so much that was beautiful and
true. Kindness, tenderness, sympathy, generosity, and divine pity,
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