History of Database Technology Past and Present

History of Database Technology Past and Present

The term database was popularized with the growth of the computer industry and is typically thought of as software used to store, index, manipulate, and retrieve information (Vaughn). Database software has been in use since the Census Bureau used a punch card system to meet the requirements for the collection, sorting, and reporting of data for the 1890 census (National Research Council). These earliest databases were flat file databases. The flat-file style of database works well for small amounts of data that need to be organized to be read and edited by hand. Flat file databases are made up of tables that store a set number of characters in each field. The individual tables are not linked and are difficult to search and navigate. In order to view a particular record in a flat file database, the end user would have to sequentially navigate through all the records that came before it. In addition, the system itself does not detect when a file is being used or modified. Therefore, if two or more users are simultaneously accessing the data, it is possible for a data to be erased by multiple processes that are fighting to save new data at the same time. Although flat file databases are still in use today, they are not commonly used to store large amounts of compact data, due to the propensity for data corruption and the difficulties inherent in accessing records (Wise).

In 1970, Edgar Codd wrote several papers outlining in theory a new approach to database construction that would use a table of records and a unique identifier called a ÐŽ§keyЎЁ to search for related records within the table. Codd demonstrated that such a system could provide sets of data in a single operation without the need for the end user navigation required by earlier flat file models. CoddÐŽ¦s theory resulted in the introduction of relational database management systems. Relational databases organize information in multiple tables that are linked together and include built-in functions allowing them to retrieve, sort, and edit the data in numerous ways. Instead of duplicating records in each table, the data can be stored in one table and simply linked to other tables that might utilize it. In addition, data retrieval speed is increased by the ability of a relational system to access any of the linked tables with a single connection instead of requiring multiple tables to be opened for data extraction (Wise).

Another area in which database management systems continue to evolve with industry growth is the area of forensic accounting. Forensic accounting covers two broad areas: litigation support and investigative accounting. Internal auditors are frequently called upon to perform electronic forensics procedures using many different types of forensic computer software. Computers are often used in committing crimes or acts contrary to company policy. Finding the smoking gun may require the auditor to look deeply into the companies system. Without the proper equipment, the evidence-gathering process can be discouraging. To preserve the collection, analysis, and documentation of evidence, internal auditors use a number of different database tools.

In 2002, it was estimated by the Association of Certified Fraud Examiners that 6% or $6000 billion of the revenue lost was a result of occupational fraud. Fraud investigators, computer audit specialists and forensic accountants use computer-assisted audit tools and techniques (CAATT) to detect fraud in large companies (Brazina & Leauby, 08/04).

CAATTs may be classified in the following groups (Le Grand, 10/01):

„« Electronic Working Papers

„« Information Retrieval and Analysis

„« Fraud Detection

„« Network Security

„« Electronic Commerce and Internet Security

„« Continuous Monitoring

„« Audit Reporting

„« Database of Audit History

„« Computer Based Training

„« Time Tracking

Two of the most commonly used data extraction tools in the auditing environment are Interactive Data Extraction and Analysis (IDEA), and Audit Control Language (ACL) software. For the most part these two are relatively similar. IDEA is an excellent data-manipulating utility that permits auditors to translate data files to or from word processors, relational databases, spreadsheets, and integrated accounting systems using a number of data formats. The purpose of IDEA is to allow external auditors to examine and sample extracted data files. IDEA software incorporates a database that produces statistics and summaries, by extracting data that meets a specified criterion being queried. The user can then browse through data displaying it graphically, or by printing custom-designed reports.

The ACL software uses a combination of data access, analysis and integrated reporting capabilities, to reach data from virtually any source, across any system, through a consistent user interface. ACL technology enables audit, financial, and control professionals to gain immediate insight into transactional data underlying their business processes and financial reporting.

Another frequently used CAATT is the Generalized Audit Software (GAS), which allows data to be extracted and analyzed. The main reasons for the widespread use of GAS is that it requires very