|



 Ô



Applying information technology (IT) to accounting

systems
 Financial accounting
 Managerial accounting
 Auditing
 Taxation

Increased career opportunities

 Specialized employment
 Combine accounting and advanced computer skills

|


 |




 Ô  

 



  



Introduction
Accounting Information Systems (AIS)
New Features in AIS
Accounting and IT
Careers in AIS

|



Ô   Ô

  
 

 Ô

|


 
 Ô 

  


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

|


    


 |
 

rovide information to support decision-making

Business and Government processes

Accounting and Finance

Non-Accountants

|


 Ô  
    


Data
 ëaw facts
 No organization or meaning
 Beginning of audit trail

Information
 rocessed data
 Meaningful to users

|


Ô |


|


 |




  

Information overload for users

 Too much information, and specially too much
trivial information, can overwhelm it users, possibly
causing relevant information to be lost or
overlooked.
Unable to identify input errors
 Another problem with computerized data
processing is that computers do not automatically
catch the simple error that humans do.
Difficult to follow audit trails |


 |




  

Difficult to follow audit trails

 This is because the path that data follow through
computerized system is electronic, not recorded on
paper
 A major focus of this book is on developing effective
internal control systems for companies, of which
audit trails are important elements.

|


 Ô
 

Accounting Information Systems

 Internal and External users
 Financial information

Enterprise ëesource lanning Systems

 Internal users
 Financial information
 Nonfinancial information
|


 Ô
 

verlapping of the Systems

 rovide same information

 Emphasize business processes

 Integration into seamless databases

|


 
 



ÿhich of the following is likely to be information rather than

data?

A.Sales price
B.Customer number
C.Net profit
D.Employee name

|



 
 


!

ÿhich of the following is likely to be information rather than

data?

A.Sales price
B.Customer number
C.Net profit
D.Employee name

|


 
 

"

ÿith 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

|


 
 

" !

ÿith 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

|


 "Ô    #   


Information Age
 Impact of technology
 Fewer workers producing goods

Knowledge workers
 roduce, analyze, manipulate, and distribute information
 Focus on business activities

|


 "Ô    #   


E-Business
 Conducting business over the Internet
 Increased importance and growth

E-Commerce
 Subset of e-business
 Buying and selling transactions

|


 ÿ 
 $  "Ô %

Suspicious Activity ëeporting

Countering Terrorism

Corporate Scandals and Accounting

The Sarbanes-xley and atriot Acts

|


 
 
 


|

 
 |

 






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

Bernard Madoff (2008)

 Investment fund manager
 onzi scheme
 $50 billion in losses

|

 
Ã  &  #' "
 ((

CEs must certify the accuracy and completeness of

financial statements

ublic companies must hire independent, new auditors to

review internal controls

Section 404
 Implement and assess internal controls
 Auditors evaluate those assessments

|


 
 

)

The Sarbanes-xley 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.ëequires the CE of a public company to take
responsibility for the reliability of its financial statements
|



 
 

) !

The Sarbanes-xley 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.ëequires the CE of a public company to take
responsibility for the reliability of its financial statements
|

 
 
 

*

The acronym SAë stands for:

A.Simple accounting receipts

B.Suspicious accounting revenue
C.Suspicious activity reporting
D.Standard accounts receivable

|

 
 
 

* !

The acronym SAë stands for:

A.Simple accounting receipts

B.Suspicious accounting revenue
C.Suspicious activity reporting
D.Standard accounts receivable

|




 Ô

|

 
 6

 


bjective of Financial Accounting

 rovide relevant information
 External parties (Investors, Creditors)
 Financial Statements

The Audit Trail

 Traces the accounting cycle
 Data flow from input to output

|

 
 6

 





|

 
 6

 


Non-Financial Data
 ëEA Accounting
 ëesources, Events, and Agents

ëeal-Time ëeporting

Interactive Data and XBë

 ëeusable data in multiple applications
 ³Tagging´ data
|



 M


 


bjective
 rovide relevant information
 Internal users (Managers)

Components
 Cost Accounting
 Budgeting

|



6

  M






|



 |



Measure and Control Costs

 Acquisition, processing, distribution, and selling
activities

AIS Examples
 Activity-Based Costing
 Corporate erformance Measurement and Business
Intelligence

|



 
 
 
 |


Assigning of verhead
 Increased automation created difficulties
 acked direct relationship between labor and
overhead

AIS Implementation
 Easier assignment of overhead
 Important aspect of strategic planning
|



 |

 

M


ëesponsibility Accounting System

 Trace unfavorable performance to responsible
department or individuals
 Immediate corrective action by managers

Balanced Scorecard
 Financial erformance
 Customer Knowledge
 Internal Business rocesses
 earning and Growth |



 Ô
 


 


|



  


Definition
 Financial projection for the future
 Short-range and long-range

Usefulness
 Managerial control
 Compare actual and budgeted results

|



 
 

+

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

|



 
 

+ !

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

|



 
 

,

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
D.Financial, rather than managerial, accounting

|


 
 

, !

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
D.Financial, rather than managerial, accounting

|


 "


Traditional role
 Evaluate the accuracy and completeness of a
corporation¶s financial statements
resent role
 Evaluate client¶s compliance with HIAA laws
 IT evaluations and audits (security, privacy)
 Management consulting

|


 Ã'


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

rofessional Usage
 ëesearch challenging questions
 Access more up-to-date information
 Database access
|



 |  "

Ô  
 


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

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

|


 |  "

Ô 
 


IT Auditing and Security

 ëisk analysis with Information Systems
 Aid financial auditors in evaluation of controls
 Certified Information Systems Auditors (CISAs)
 enetration testing

|


 Ô

-
 |

-
 |

Disaster ëecovery lanning

 Assures continuity of operations
 Must test plan regularly

IT Exposure
 Viruses and ÿorms
Auditing Standard No. 60
 ëeport lack of disaster plan

|


 |

Copyright 2010 John ÿiley & Sons, Inc. All rights reserved.
ëeproduction or translation of this work beyond that permitted in
Section 117 of the 1976 United States Copyright Act without the
express written permission of the copyright owner is unlawful.
ëequest for further information should be addressed to the
ermissions Department, John ÿiley & Sons, Inc. The purchaser
may make backup copies for his/her own use only and not for distribution
or resale. The ublisher assumes no responsibility for errors, omissions,
or damages, caused by the use of these programs or from the use of the
information contained herein.

|


|



|