Accounting information systems 12th SIMKIN and norman chapter 01

Chapter 1:

Accounting Information Systems
and the Accountant

Introduction
What Are Accounting Information Systems
(AIS)?
What’s New in AIS?
Accounting and IT
Careers in AIS
Chapter
1-1


Introduction
Applying information technology (IT) to accounting
systems





Financial accounting
Managerial accounting
Auditing
Taxation

Increased career opportunities



Specialized employment
Combine accounting and advanced computer skills
Chapter
1-2


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
1-3


The Accountant’s Challenge
Provide information to support decision-making
Business and Government processes

Accounting and Finance
Non-Accountants
Chapter
1-4


Information (versus Data)
Data

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Raw facts
No organization or meaning
Beginning of audit trail

Information



Processed data
Meaningful to users
Chapter
1-5


AIS Components

Chapter
1-6

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

Chapter
1-7


AIS and ERP
Accounting Information Systems
Internal and External users
 Financial information


Enterprise Resource Planning Systems
Internal users
 Financial and Nonfinancial information
 Predictive analytics


Chapter
1-8


AIS and ERP
Overlapping of the Systems



Provide same information



Emphasize business processes



Integration into seamless databases

Chapter
1-9


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
1-10


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
1-11


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
1-12


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
1-13


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

Chapter
1-14


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

Chapter
1-15


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

Chapter
1-16


Cloud Computing

Chapter
1-17

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

Chapter
1-18


Sustainability Reporting
Reporting Nonfinancial Measures


Impacts on income, value, or future performance

Chapter
1-19


Suspicious Activity Reporting

Chapter
1-20


Forensic Accounting
Forensic Accounting




Combines skills of investigation, accounting, and auditing
Provides evidence of criminal activity

Examples of AIS Uses in Forensic Accounting

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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
1-21


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
Chapter
1-22


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 statementsChapter
1-23


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 statementsChapter
1-24


Study Break #4
The acronym SAR stands for:
A. Simple accounting receipts
B. Suspicious accounting revenue
C. Suspicious activity reporting
D. Standard accounts receivable

Chapter
1-25