1.

The database approach pools data into a common database shared by all users,
which resolves problems.
No data redundancy as each data element is only stored once.
As such, only a single update procedure is required.
Changes any user makes updates values for all users.
Users have access to all firm data, subject to authorizations.
Database management system (DBMS) is a special software system that controls
access to the database.
Three conceptual models: hierarchical model, network model and relational model.
Hierarchical and network databases are navigational or structured models with data
elements using predefined paths.
Relational model is flexible and allows users to create paths.
2. Data Storage - creates excessive storage costs of paper documents and/or
magnetic form.
Data Updating - any changes or additions must be performed multiple times.
Currency of Information has the potential problem of failing to update all affected
files.
Task-Data Dependency - user unable to obtain additional information as his or her
needs change
3. Insertion Anomaly: A new item cannot be added to the table until at least one
entity uses a particular attribute item.
Deletion Anomaly: If an attribute item used by only one entity is deleted, all
information about that attribute item is lost.
Update Anomaly: A modification on an attribute must be made in each of the rows
in which the attribute appears.
4. RESOURCES, EVENTS, AGENTS
-Economic resources are things of economic value.
-Objects that are scarce and under control of the organization.
-Used in exchanges and increased or decreased by the exchange.

5. a. Reliable, Verifiable, and Objective

The accounting profession has been willing to move away from the cost principle if there are
reliable, verifiable, and objective amounts involved. For example, if a company has an investment in
stock that is actively traded on a stock exchange, the company may be required to show the current
value of the stock instead of its original cost.

b. Consistency
Accountants are expected to be consistent when applying accounting principles, procedures, and
practices. For example, if a company has a history of using the FIFO cost flow
assumption, readers of the company's most current financial statements have every reason to
expect that the company is continuing to use the FIFO cost flow assumption. If the company changes
this practice and begins using the LIFO cost flow assumption, that change must be clearly
disclosed.

c. Comparability
Investors, lenders, and other users of financial statements expect that financial statements of one
company can be compared to the financial statements of another company in the same
industry.Generally accepted accounting principles may provide for comparability between
the financial statements of different companies. For example, the FASB requires that expenses
related to research and development (R&D) be expensed when incurred. Prior to its rule, some
companies expensed R&D when incurred while other companies deferred R&D to the balance sheet
and expensed them at a later date.

6. The Deregulation of ENRON

While the term regulation within a commercial and corporate setting typically
applied to the governments ability to regulate and authorize commercial activity
and behavior with regard to individual businesses, the ENRON executives applied for
and were subsequently granted government deregulation. As a result of this
declaration of deregulation, ENRON executives were permitted to maintain agency
over the earnings reports that were released to investors and employees alike.
Misrepresentation
By misrepresenting earnings reports while continuing to enjoy the revenue provided
by the investors not privy to the true financial condition of ENRON, the executives of
ENRON embezzled funds funneling in from investments while reporting fraudulent
earnings to those investors; this not only proliferated more investments from
current stockholders, but also attracted new investors desiring the enjoy the
apparent financial gains enjoyed by the ENRON corporation.
Embezzlement

An ENRON Scandal Summary of the acts of Embezzlement undertaken by ENRON

Executives may be defined as the criminal activity involving the unlawful and
unethical attainment of monies and funding by employees; typically, funds that are
embezzled are intended for company use in lieu of personal use. While the ENRON
executives were pocketing the investment funds from unsuspecting investors, those
funds were being stolen from the company, which resulted in the bankruptcy of the
company.