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UWCISA Symposium 2009

UWCISA Symposium 2009. Extending and using graphical representations of business processes in evaluating internal control A . Faye Borthick Georgia State University, borthick@gsu.edu Gary P. Schneider Quinnipiac University, gary.schneider@quinnipiac.edu

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UWCISA Symposium 2009

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  1. UWCISA Symposium 2009 Extending and using graphical representations of business processes in evaluating internal control A. Faye BorthickGeorgia State University, borthick@gsu.edu Gary P. SchneiderQuinnipiac University, gary.schneider@quinnipiac.edu Anthony O. VanceBrigham Young University, anthony@vance.name J. Mack Robinson College of Business / Georgia State University

  2. Rationale for the learning experience • Business on the cusp of a shift from flowcharts to business process diagrams (BPDs) • Scarcity of cases that afford students opportunities to: • Represent processes in diagrams from authentic sources, e.g., conversations • Evaluate internal control in highly automated situations J. Mack Robinson College of Business / Georgia State University

  3. Learning activities/objectives • Extend graphical representations of business processes from conversations: modify flowcharts or BPDs • User process representations to evaluate internal control • Identify information that the auditor should have obtained in the interviews • Identify control weaknesses • Explain potential effects of control weaknesses on the financial statements and operational effectiveness • Answer multiple-choice questions for 1 and 2 based on the case J. Mack Robinson College of Business / Georgia State University

  4. Situation: Context in conversation The scene: Corporate and store managers of the convenience store chain 24-Seven Company mulling over the implications for accounts payable processing in moving from their current system based on batch processing to a more customer-driven model for merchandise in the stores as a way to increase same-store sales over time. J. Mack Robinson College of Business / Georgia State University

  5. Flowcharts vs. BPDs • Experiment: Where are controls easiest to recognize? • Flowchart • BPD • BPD with Krishnan et al. (2005) control notation J. Mack Robinson College of Business / Georgia State University

  6. J. Mack Robinson College of Business / Georgia State University

  7. J. Mack Robinson College of Business / Georgia State University

  8. J. Mack Robinson College of Business / Georgia State University

  9. Objective questions: Performance objectives • Identify control strengths and weaknesses • Design controls to mitigate control weaknesses • By control objectives • By financial statement assertions • In business processes • In SDLC • In access control • 6 practice questions and 30 assessment questions J. Mack Robinson College of Business / Georgia State University

  10. Sample question: Identify control strength • Verifying that each EFT confirmation has a corresponding EFT request would ensure the: • Validity of payments • Completeness of payments • Valuation of payments • Validity and completeness of payments J. Mack Robinson College of Business / Georgia State University

  11. Learning theory: Situation model building • The best experience for future action is constructing mental models in current situations, i.e., comprehending. • Ambiguities and conflicts are needed to prompt inferences and elaborations required to develop robust situation models. J. Mack Robinson College of Business / Georgia State University

  12. References for situation model building • Barsalou. 1999. Language comprehension: Archival memory or preparation for situated action? Discourse Processes 28 (1): 61-80 • Zwaan and Radvansky. 1998. Situation models in language comprehension and memory. Psychological Bulletin 123 (2): 162-185 J. Mack Robinson College of Business / Georgia State University

  13. Learner reaction • Realized “a ha” moments about payables weaknesses where they worked • Struggled with random positioning of utterances • Current vs. contemplated systems • Temporal sequence of processing • Recognized weaknesses more readily if they identified missing information first • Wished they’d developed better flowcharting/BPD skills on earlier assignments • Preferred BPDs: Easier to prepare and use J. Mack Robinson College of Business / Georgia State University

  14. 24-Seven’s contribution • Practice in evaluating internal control in a highly automated situation from conversation with assessment questions • Introduction of notation • BPMN in BPDs • Krishnan et al.’s (2005) controls notation J. Mack Robinson College of Business / Georgia State University

  15. Access • Case on the Web: http://www2.gsu.edu/~wwwais/pro/24-Seven/site/24-SevenPart2.htm • Use name = acct431 and password = Pr2378 • Krishnan, R., J. Peters, R. Padman, and D. Kaplan. 2005. On data reliability assessment in accounting information systems. Information Systems Research 16(3): 307-326. J. Mack Robinson College of Business / Georgia State University

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