AIS and the Acountant

2. AIS and the Acountant Chapter 1

3. Chapter 1:AIS and the Accountant • Introduction: Why Study Accounting Information Systems (AIS)? • Careers in AIS • Accounting and IT • What Are AISs? • What’s New in AISs? • AIS at Work

4. Introduction: Why Study AIS • Applying information technology (IT) to accounting systems • Financial accounting • Managerial accounting • Auditing • Taxation • Increased career opportunities • Specialized employment • Combine accounting and advanced computer skills

5. 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)

6. 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

7. Careers in Accounting Information Systems • Predictive Analytics • Profession changing • Statistical analysis • Data modeling • Data mining • Data Warehouses

8. Accounting and IT

9. 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

10. Objectives of Financial Accounting • External • Provide relevant information • Investors, Creditors • Financial Statements • Internal • Provide relevant information • Planning, decision making, and control activities • Division managers, product managers

11. Managerial Accounting • Objective • Provide relevant information • Internal users (Managers) • Components • Cost Accounting • Budgeting

12. Cost Accounting • Measure and Control Costs • Acquisition, processing, distribution, and selling activities • AIS Examples • Corporate Performance Measurement and Business Intelligence

13. Activity-Based Costing • Assigning of Overhead • Increased automation created difficulties • Lacked direct relationship between labor and overhead • AIS Implementation • Easier assignment of overhead • Important aspect of strategic planning

14. Corporate Performance Measurement • Responsibility Accounting System • Trace unfavorable performance to responsible department or individuals • Immediate corrective action by managers • Balanced Scorecard • Financial Performance • Customer Knowledge • Internal Business Processes • Learning and Growth

15. Budgeting • Definition • Financial projection for the future • Short-range and long-range • Usefulness • Managerial control • Compare actual and budgeted results

16. 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

17. 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

18. Study Break #1 The Sarbanes-Oxley Act of 2002: • Enables U.S. officers to wire tap corporate phones if required • Has led to a decrease in the amount of work done by auditors and accountants • Forbids corporations from making personal loans to executives • Requires the CEO of a public company to take responsibility for the reliability of its financial statements

19. Study Break #2 A dashboard is: • A computer screen used by data entry clerks for input tasks • A physical device dedicated to AIS processing tasks • A summary screen typically used by managers • A type of blackboard used by managers to present useful information to others

20. What are AISs • Accounting and Information Technology • Information versus Data • AIS components

21. Accounting and IT • 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

22. Information (versus Data) • Data • Raw facts • No organization or meaning • Beginning of audit trail • Information • Processed data • Meaningful to users

23. AIS Components

24. Computerized Data Processing Problems • Information overload for users • Unable to identify input errors • Difficult to follow audit trails

25. AIS and ERP • Accounting Information Systems • Internal and External users • Financial information • Enterprise Resource Planning Systems • Internal users • Financial and Nonfinancial information • Predictive analytics

26. AIS and ERP • Overlapping of the Systems • Provide same information • Emphasize business processes • Integration into seamless databases

27. AIS: Role in Organizations • Information Age • Impact of technology • Fewer workers producing goods • Knowledge workers • Produce, analyze, manipulate, and distribute information • Focus on business activities

28. AIS: Role in Organizations • E-Business • Conducting business over the Internet • Increased importance and growth • E-Commerce • Subset of e-business • Buying and selling transactions

29. Study Break #3 Which of the following is likely to be information rather than data? • Sales price • Customer number • Net profit • Employee name

30. Study Break #4 With respect to computerized AIS, computers: • Turn data into information in all cases • Make audit trails easier to follow • Cannot catch mistakes as well as humans • Do not generally process information more quickly than humans

31. What’s New in AIS? • Cloud Computing • Sustainability Reporting • Suspicious Activity Reporting • Forensic Accounting, Governmental Accountants, and Terrorism • Corporate Scandals and Accounting

32. Cloud Computing

33. Disadvantages of Cloud Computing • Reliability of Internet Connection • Data Security Measures of Provider • Quality of Service • Reliability of Service Provider

34. Sustainability Reporting • Reporting Nonfinancial Measures • Impacts on income, value, or future performance

35. Suspicious Activity Reporting

36. 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

37. 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

38. Study Break #5 The acronym SAR stands for: • Simple accounting receipts • Suspicious accounting revenue • Suspicious activity reporting • Standard accounts receivable

39. Study Break #6 Assigning overhead costs based on the resources, rather than only direct labor, used in manufacturing is an example of: • Activity-based costing (ABC) • Budgeting • Cost-plus accounting • Financial, rather than managerial, accounting

40. AIS at Work • The cost of not filing a SAR • Filing a SAR in not optional