Accounting information systems 12th SIMKIN and norman chapter 01

Accounting Information SystemsAn Accounting Information System AIS  Data and processing procedures  Creates needed information for users AIS Today  Financial and non-financial data 

Chapter 1:

Accounting Information Systems

and the Accountant

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

The Accountant’s Challenge

Provide information to support decision-making

Business and Government processes

Accounting and Finance

AIS Components

Computerized Data Processing Problems

Information overload for users

Unable to identify input errors

Difficult to follow audit trails

AIS and ERP

Accounting Information Systems

 Internal and External users

 Financial information

Enterprise Resource Planning Systems

 Internal users

AIS and ERP

Overlapping of the Systems

 Provide same information

 Emphasize business processes

 Integration into seamless databases

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

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

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

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

AIS: Role in Organizations

Information Age

Knowledge workers

AIS: Role in Organizations

E-Business

E-Commerce

What’s New in AIS?

Cloud Computing

Sustainability Reporting

Suspicious Activity Reporting

Forensic Accounting, Governmental

Cloud Computing

Disadvantages of Cloud

Computing

Reliability of Internet Connection

Data Security Measures of Provider

Quality of Service

Reliability of Service Provider

Sustainability Reporting

Reporting Nonfinancial Measures

Suspicious Activity Reporting

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

Corporate Scandals and

Accounting

Enron (2001)

 Manipulation of accounting records

 Understate liabilities and inflate earnings

Bernard Madoff (2008)

 Investment fund manager

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

Study Break #3

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

Study Break #3 - Answer

The acronym SAR stands for:

A Simple accounting receipts

B Suspicious accounting revenue

C Suspicious activity reporting

D Standard accounts receivable

Study Break #4

The acronym SAR stands for:

A Simple accounting receipts

B Suspicious accounting revenue

C Suspicious activity reporting

D Standard accounts receivable

Study Break #4 - Answer

Accounting and IT

The Accounting Cycle

Managerial Accounting

Objective

 Provide relevant information

 Internal users (Managers)

Components

 Cost Accounting

Cost Accounting

Measure and Control Costs

 Acquisition, processing, distribution, and selling

Activity-Based Costing

Assigning of Overhead

 Increased automation created difficulties

 Lacked direct relationship between labor and

overhead

AIS Implementation

Easier assignment of overhead

Corporate Performance

Measurement

Responsibility Accounting System

 Trace unfavorable performance to responsible

department or individuals

 Immediate corrective action by managers

Balanced Scorecard

 Financial Performance

Business Intelligence and

Dashboards

Definition

 Financial projection for the future

 Short-range and long-range

Usefulness

 Managerial control

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

Study Break #5

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

Study Break #5 - Answer

Assigning overhead costs based on the resources, rather

than only direct labor, used in manufacturing is an example of:

A Activity-based costing (ABC)

B Budgeting

C Cost-plus accounting

Study Break #6

Assigning overhead costs based on the resources, rather

than only direct labor, used in manufacturing is an example of:

A Activity-based costing (ABC)

B Budgeting

C Cost-plus accounting

Study Break #6 - Answer

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)

Taxation Software

 Example of AIS

 Create and evaluate tax strategies

 Transmit completed forms

Professional Usage

Careers in Accounting Information Systems

Traditional Accounting

 Understanding of accounting and information systems

 Certified Information Technology Professional

Systems Consulting

 Designing systems and reengineering processes

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

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

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Chapter 1