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Week 1a

Week 1a. ACTG 551. Accounting Information Systems Professor: Stacey Poli, CPA. Administrative – 1/2. Send me an email. Put ACTG551- Fall 2008 in the subject line. Send it from the email address you will rely on for class info Sign it Send it by Friday, October 3

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Week 1a

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  1. Week 1a

  2. ACTG 551 Accounting Information Systems Professor: Stacey Poli, CPA

  3. Administrative – 1/2 • Send me an email. Put ACTG551- Fall 2008 in the subject line. • Send it from the email address you will rely on for class info • Sign it • Send it by Friday, October 3 • Some readings and updates will be e-mailed to you. • I will distribute in class in Week 2

  4. Administrative – 2/2 • My website content: • Most updated Syllabus • Reading material and cases (ID and Password required ) • Projects • Lecture Power Points (avail. week following lecture)

  5. Class Decisions • Break(s)? • 2 breaks for a total of approximately 30 minutes, leave at 9:20 • 1 break of about 10 minutes, leave at 9:00 And the winner is?

  6. What we will cover in this course • General place of AIS in accounting • Conceptual place of AIS • Functionality • Documentation techniques • Accounting cycle analysis • Risk assessments • Accounting controls • Models—COSO/COBIT and ERM based • Matrices • Sarbanes-Oxley Act of 2002 • ERP system implementations • Change management

  7. What we will not cover in this course • Accounting calculations (leave your calculators at home) • Information technology (this is not an IT course) • One correct answer for all questions (logic matters)

  8. Me My journey……

  9. What I hope you will take away • Why AIS are important to everyone • Ability to perform accounting cycle analysis, risk assessments and gap identifications • Effectively utilize internal control frameworks • Clearly communicate/document AIS • Provide value during a ERP system implementation • Consider change management issues

  10. Student Introductions • Name: • Relevant experience, if any: • What you want to walk away with from this class:

  11. AIS Group Assignment • Discussion

  12. What is an Accounting Information System (AIS) • Interrelated components that interact to: • Collect • Record • Store • Process What? Data Resulting in? Information

  13. Classifying Accounting Systems • Single Entry • Money, Quicken • Bookkeeping Systems (organized around A=L + OE) • Peachtree, Quickbooks • Multidimensional Accounting • GEAC’s SmartEnterprise, Solomon’s Solomon IV • Modular Integration • JBA Software’s System 21, Lawson’s Insight II Enterprise Suite • Single Source ERP • SAP, Oracle Financials, JD Edwards’, Microsoft Dynamics

  14. Information • An effective AIS results in useful and meaningful information for decision makers (external-shareholders/auditors & internal-management/BOD) • What makes it useful and meaningful?

  15. Useful—Relevant • Connected to business objectives • Logical, supportable thread from metrics to objectives • Meaningful for the purpose intended, valid • Predictive value (leading) • Training, investment in IT, advertising • Feedback value (lagging) • ROI, net income, productivity

  16. Useful—Reliable • Accurate for the purpose intended • Representational faithfulness • Verifiable • Neutral • meaning objective, but not purposeless • relieves us of the need to assess “values” of the data/information • Acknowledge inherent bias in any metric/measure

  17. Useful—Complete • Covers the time frame required or indicated • Entire population are included, even if located in different locations or systems

  18. Meaningful • Understandable • Avoid information overload • Match audience (numbers vs graphs vs charts) • Make industry specific if appropriate • Sort according to requirements • Verifiable • Can trace back to source document, preferably external • Evidence of approval (e.g. signature, electronic correspondence)

  19. Meaningful (cont) • Credible • What users value and trust • Assess and report on the accuracy of key sources • Institute a data-quality program for key data • Timeliness • Available within time required • Includes most current data • Accessibility • Physically • Cognitively

  20. Measurement issues • What to measure • How often • Measurement attributes • What to report • Abstractions • What basis for measuring? For whom? To meet what objective(s)?

  21. Lagging Indicators • Measures of output, end-process measures, record effects • Reflect past performance • Generally quantitative • Example: Quantity of toxic emission; last year’s percentage of on-time deliveries • Strength: Easy to quantify and understand, preferred by regulators and public—deterministic rather than probabilistic • Weakness: Time lag in feedback, ignore present activities

  22. Leading Indicators • In-process metrics of performance, proactive • Reflect current status/activities—for future performance • Quantitative or qualitative • Example: percent of facilities conducting self-audit; training of logistics managers • Strength: Represent current actions and future trends • Weakness: Harder to build support for use, harder to track to performance—probabilistic rather than deterministic

  23. Other AIS objectives • Provide adequate controls to mitigate risks • Integrate data to minimize duplication of effort and maximize efficiency

  24. Factorsinfluencing AIS design • Strategy • Information technology • Organizational culture • Societal demands • …what do we need to account FOR

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