2. 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

3. What is a system? Name some examples of systems…
What do these examples have in common?

4. Socio-technical systems (STS) model
views organizational work systems as 2 jointly interacting work systems: the social and the technical (Bostrom, 1980).
Structure Technology
People Tasks
Social Technical
System System
Inputs
The outputs of the system are the result of joint interactions between these two systems
Outputs

5. 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.

6. 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

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

8. AIS Components

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

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

11. Study Break #1
Which of the following is likely to be information rather than data?
Sales price
Customer number
Net profit
Employee name

12. Study Break #1 - Answer
Which of the following is likely to be information rather than data?
Sales price
Customer number
Net profit
Employee name

13. Study Break #2 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

14. Study Break #2 - Answer 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

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

16. Cloud Computing

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

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

19. Suspicious Activity Reporting

20. 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

21. 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

22. Study Break #3 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

23. Study Break #3 - Answer The Sarbanes-Oxley Act of 2002:
Enables U.S. officers to wire tap corporate phones if required
Has lead 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

24. Accounting and IT

25. The Accounting Cycle

26. Financial Accounting Non-Financial Data Real-Time Reporting
REA Accounting
Resources, Events, and Agents
Real-Time Reporting
Interactive Data and XBRL
Reusable data in multiple applications
“Tagging” data

27. Managerial Accounting Business Intelligence and Dashboards

28. Auditing Traditional role Present 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

29. Taxation Taxation Software Professional Usage Example of AIS
Create and evaluate tax strategies
Transmit completed forms
Professional Usage
Research challenging questions
Access more up-to-date information
Database access

30. Study Break #5 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

31. Study Break #5 - Answer 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

32. 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)

33. 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

34. 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