Chapter
1-1
Chapter 1:
Accounting Information Systems
and the Accountant
What Are Accounting Information Systems
(AIS)?
What’s New in AIS?
Accounting and IT
Careers in AIS
Chapter
1-2
What is a system?
Name some examples of systems…
What do these examples have in common?
Chapter
1-3
3
Socio-technical systems (STS) model
views organizational work systems as 2
jointly interacting work systems: the
social and the technical (Bostrom, 1980).
Social
System
Inputs
Structure
People
Technical
System
Technology
Tasks
Outputs
The outputs of the
system are the
result of joint
interactions
between these two
systems
Chapter
1-4
What is an information system?
More than just the technology
 the
collection of computer hardware
and software, procedures,
documents, forms, and people
responsible for the capture,
movement, management and
distribution of data and information.
Chapter
1-5
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
 Business process focused
Chapter
1-6
Information (versus Data)
Data



Raw facts
No organization or meaning
Beginning of audit trail
Information


Processed data
Meaningful to users
Chapter
1-7
AIS Components
Chapter
1-8
Computerized Data
Processing Problems
Information overload for users
Unable to identify input errors
Difficult to follow audit trails
Chapter
1-9
AIS and ERP
Overlapping of the Systems

Provide same information

Emphasize business processes

Integration into seamless databases
Chapter
1-10
Study Break #1
Which of the following is likely to be information rather than
data?
A. Sales price
B. Customer number
C. Net profit
D. Employee name
Chapter
1-11
Study Break #1 - Answer
Which of the following is likely to be information rather than
data?
A. Sales price
B. Customer number
C. Net profit
D. Employee name
Chapter
1-12
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
Chapter
1-13
Study Break #2 - Answer
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
Chapter
1-14
What’s New in AIS?
Cloud Computing
Sustainability Reporting
Suspicious Activity Reporting
Forensic Accounting, Governmental
Accountants, and Terrorism
Corporate Scandals and Accounting
Chapter
1-15
Cloud Computing
Chapter
1-16
Disadvantages of Cloud
Computing
Reliability of Internet Connection
Data Security Measures of Provider
Quality of Service
Reliability of Service Provider
Chapter
1-17
Sustainability Reporting
Reporting Nonfinancial Measures

Impacts on income, value, or future performance
Chapter
1-18
Suspicious Activity Reporting
Chapter
1-19
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
Chapter
1-20
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
Chapter
1-21
Study Break #3
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
executives
D. Requires the CEO of a public company to take
responsibility for the reliability of its financial statements
Chapter
1-22
Study Break #3 - Answer
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
executives
D. Requires the CEO of a public company to take
responsibility for the reliability of its financial statements
Chapter
1-23
Accounting and IT
Chapter
1-24
The Accounting Cycle
Chapter
1-25
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
Chapter
1-26
Managerial Accounting Business
Intelligence and Dashboards
Chapter
1-27
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

Chapter
1-28
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
Chapter
1-29
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
information to others
Chapter
1-30
Study Break #5 - Answer
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
Chapter
1-31
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)
Chapter
1-32
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
Chapter
1-33
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

Report lack of disaster plan
Chapter
1-34
Chapter
1-35