Core concepts of accounting information systems 13 by simkin norman chapter 01

Prepared by Paula Funkhouser
University of Nevada, Reno

Core Concepts of Accounting Information Systems, 13th Edition
Mark G. Simkin ● Jacob M. Rose ● Carolyn S. Norman

AIS and the
Acountant
Chapter 1


Chapter 1:
AIS and the Accountant
• Introduction: Why Study Accounting Information Systems
(AIS)?
• Careers in AIS
• Accounting and IT
• What Are AISs?
• What’s New in AISs?
• AIS at Work

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Introduction: Why Study AIS
• Applying information technology (IT) to accounting
systems
– Financial accounting
– Managerial accounting
– Auditing

– Taxation
• Increased career opportunities
– Specialized employment
– Combine accounting and advanced computer skills

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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)

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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

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Careers in Accounting Information
Systems
• Predictive Analytics
– Profession changing
– Statistical analysis
– Data modeling
– Data mining
– Data Warehouses

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Accounting and IT

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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

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Objectives of Financial Accounting
• External
– Provide relevant information
– Investors, Creditors
– Financial Statements
• Internal
– Provide relevant information
– Planning, decision making, and control activities
– Division managers, product managers

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Managerial Accounting
• Objective
– Provide relevant information
– Internal users (Managers)
• Components
– Cost Accounting
– Budgeting

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Cost Accounting
• Measure and Control Costs
– Acquisition, processing, distribution, and selling activities
• AIS Examples
– Corporate Performance Measurement and Business
Intelligence

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Activity-Based Costing
• Assigning of Overhead
– Increased automation created difficulties
– Lacked direct relationship between labor and overhead
• AIS Implementation
– Easier assignment of overhead
– Important aspect of strategic planning

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Corporate Performance Measurement
• Responsibility Accounting System

– Trace unfavorable performance to responsible department
or individuals
– Immediate corrective action by managers
• Balanced Scorecard
– Financial Performance
– Customer Knowledge
– Internal Business Processes
– Learning and Growth

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Budgeting
• Definition
– Financial projection for the future
– Short-range and long-range
• Usefulness
– Managerial control
– Compare actual and budgeted results

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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

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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

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Study Break #1
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

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Study Break #2
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

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What are AISs
• Accounting and Information Technology
• Information versus Data
• AIS components

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Accounting and IT
• 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

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

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AIS Components

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Computerized Data Processing
Problems

• Information overload for users
• Unable to identify input errors
• Difficult to follow audit trails

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AIS and ERP
• Accounting Information Systems
– Internal and External users
– Financial information
• Enterprise Resource Planning Systems
– Internal users
– Financial and Nonfinancial information
– Predictive analytics

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

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