Chapter 1-1

Chapter 1-2

Chapter 1:Accounting Information Systems

and the Accountant

What Are Accounting Information Systems (AIS)?

What’s New in AIS?

Accounting and IT

Careers in AIS

Chapter 1-3

What is a system?

Name some examples of systems…

What do these examples have in common?

3

Chapter 1-4

Socio-technical systems (STS) model

views organizational work systems as 2 jointly interacting work systems: the social and the technical (Bostrom, 1980).

Outputs

The outputs of the system are

the result of joint interactions

between these two systems

Structure Technology

People Tasks

Social TechnicalSystem System

Inputs

Chapter 1-5

What is an information system?

More than just the technologythe collection of computer hardware

and software, procedures, documents, forms, and people responsible for the capture, movement, management and distribution of data and information.

Chapter 1-6

Accounting Information Systems

An Accounting Information System (AIS) Data and processing procedures Creates needed information for users

AIS Today Financial and non-financial data Enterprise-wide information system Business process focused

Chapter 1-7

Data Raw facts No organization or meaning Beginning of audit trail

Information Processed data Meaningful to users

Information (versus Data)

Chapter 1-8

AIS Components

Chapter 1-9

Computerized Data Processing Problems

Information overload for users

Unable to identify input errors

Difficult to follow audit trails

Chapter 1-10

AIS and ERP

Overlapping of the Systems Provide same information

Emphasize business processes

Integration into seamless databases

Chapter 1-11

Which of the following is likely to be information rather than data?

A. Sales price

B. Customer number

C. Net profit

D. Employee name

Study Break #1

Chapter 1-12

Which of the following is likely to be information rather than data?

A. Sales price

B. Customer number

C. Net profit

D. Employee name

Study Break #1 - Answer

Chapter 1-13

With respect to computerized AIS, computers:

A. Turn data into information in all cases

B. Make audit trails easier to follow

C. Cannot catch mistakes as well as humans

D. Do not generally process information more quickly than humans

Study Break #2

Chapter 1-14

With respect to computerized AIS, computers:

A. Turn data into information in all cases

B. Make audit trails easier to follow

C. Cannot catch mistakes as well as humans

D. Do not generally process information more quickly than humans

Study Break #2 - Answer

Chapter 1-15

What’s New in AIS?

Cloud Computing

Sustainability Reporting

Suspicious Activity Reporting

Forensic Accounting, Governmental Accountants, and Terrorism

Corporate Scandals and Accounting

Chapter 1-16

Cloud Computing

Chapter 1-17

Disadvantages of Cloud Computing

Reliability of Internet Connection

Data Security Measures of Provider

Quality of Service

Reliability of Service Provider

Chapter 1-18

Sustainability Reporting

Reporting Nonfinancial Measures Impacts on income, value, or future performance

Chapter 1-19

Suspicious Activity Reporting

Chapter 1-20

Forensic Accounting

Forensic Accounting Combines skills of investigation, accounting, and auditing Provides evidence of criminal activity

Examples of AIS Uses in Forensic Accounting Identifying and denying financial aid to terrorists Tracing arms and chemical orders to final destination Planning for catastrophic events Controlling cyber terrorism Detecting money laundering and illegal transfers

Chapter 1-21

Corporate Scandals and Accounting

Enron (2001) Manipulation of accounting records Understate liabilities and inflate earnings

Bernard Madoff (2008) Investment fund manager Ponzi scheme Resulted in billions of dollars in losses

Chapter 1-22

The Sarbanes-Oxley Act of 2002:

A. Enables U.S. officers to wire tap corporate phones if required

B. Has led to a decrease in the amount of work done by auditors and accountants

C. Forbids corporations from making personal loans to executives

D. Requires the CEO of a public company to take responsibility for the reliability of its financial statements

Study Break #3

Chapter 1-23

The Sarbanes-Oxley Act of 2002:

A. Enables U.S. officers to wire tap corporate phones if required

B. Has lead to a decrease in the amount of work done by auditors and accountants

C. Forbids corporations from making personal loans to executives

D. Requires the CEO of a public company to take responsibility for the reliability of its financial statements

Study Break #3 - Answer

Chapter 1-24

Accounting and IT

Chapter 1-25

The Accounting Cycle

Chapter 1-26

Financial Accounting

Non-Financial Data REA Accounting Resources, Events, and Agents

Real-Time Reporting

Interactive Data and XBRL Reusable data in multiple applications “Tagging” data

Chapter 1-27

Managerial Accounting Business Intelligence and

Dashboards

Chapter 1-28

Auditing

Traditional role Evaluate the accuracy and completeness of a

corporation’s financial statements

Present role Evaluate client’s compliance with HIPAA laws IT evaluations and audits (security, privacy) Management consulting

Chapter 1-29

Taxation

Taxation Software Example of AIS Create and evaluate tax strategies Transmit completed forms

Professional Usage Research challenging questions Access more up-to-date information Database access

Chapter 1-30

A dashboard is:

A. A computer screen used by data entry clerks for input tasks

B. A physical device dedicated to AIS processing tasks

C. A summary screen typically used by managers

D. A type of blackboard used by managers to present useful information to others

Study Break #5

Chapter 1-31

A dashboard is:

A. A computer screen used by data entry clerks for input tasks

B. A physical device dedicated to AIS processing tasks

C. A summary screen typically used by managers

D. A type of blackboard used by managers to present useful information to others

Study Break #5 - Answer

Chapter 1-32

Careers in Accounting Information Systems

Traditional Accounting Understanding of accounting and information systems Certified Information Technology Professional

Systems Consulting Designing systems and reengineering processes Software and hardware selection Value-added resellers (VARs)

Chapter 1-33

Careers in Accounting Information Systems

Certified Fraud Examiner Professional certification Association of Certified Fraud Examiners (ACFE)

IT Auditing and Security Risk analysis with Information Systems Aid financial auditors in evaluation of controls Certified Information Systems Auditors (CISAs) Penetration testing

Chapter 1-34

AIS at Work: Consulting Work for CPAs

Disaster Recovery Planning Assures continuity of operations Must test plan regularly

IT Exposure Viruses and Worms

Auditing Standard No. 60 Report lack of disaster plan

Chapter 1-35