chapter 1-1. chapter 1-2 introduction applying information technology (it) to accounting systems ...
TRANSCRIPT
Chapter 1-1
Chapter 1-2
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 1-3
Chapter 1:Accounting Information Systems
and the Accountant
Introduction
Accounting Information Systems (AIS)
New Features in AIS
Accounting and IT
Careers in AIS
Chapter 1-4
AIS: The Intersection of Accounting and IS
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
The Accountant’s Challenge
Provide information to support decision-making
Business and Government processes
Accounting and Finance
Non-Accountants
Chapter 1-7
Data Raw facts No organization or meaning Beginning of audit trail
Information Processed data Meaningful to users
Information (versus Data)
Chapter 1-8
AIS Components
Chapter 1-9
Computerized Data Processing Problems
Information overload for users
Unable to identify input errors
Difficult to follow audit trails
Chapter 1-10
AIS and ERP
Accounting Information Systems Internal and External users Financial information
Enterprise Resource Planning Systems Internal users Financial information Nonfinancial information
Chapter 1-11
AIS and ERP
Overlapping of the Systems Provide same information
Emphasize business processes
Integration into seamless databases
Chapter 1-12
Which of the following is likely to be information rather than data?
A.Sales price
B.Customer number
C.Net profit
D.Employee name
Study Break #1
Chapter 1-13
Which of the following is likely to be information rather than data?
A.Sales price
B.Customer number
C.Net profit
D.Employee name
Study Break #1 - Answer
Chapter 1-14
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
Study Break #2
Chapter 1-15
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
Study Break #2 - Answer
Chapter 1-16
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 1-17
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 1-18
What’s New in AIS?
Suspicious Activity Reporting
Countering Terrorism
Corporate Scandals and Accounting
The Sarbanes-Oxley and Patriot Acts
Chapter 1-19
Suspicious Activity Reporting
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 $50 billion in losses
Chapter 1-21
The Sarbanes-Oxley Act of 2002
CEOs must certify the accuracy and completeness of financial statements
Public companies must hire independent, new auditors to review internal controls
Section 404 Implement and assess internal controls Auditors evaluate those assessments
Chapter 1-22
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
Study Break #3
Chapter 1-23
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
Study Break #3 - Answer
Chapter 1-24
The acronym SAR stands for:
A.Simple accounting receipts
B.Suspicious accounting revenue
C.Suspicious activity reporting
D.Standard accounts receivable
Study Break #4
Chapter 1-25
The acronym SAR stands for:
A.Simple accounting receipts
B.Suspicious accounting revenue
C.Suspicious activity reporting
D.Standard accounts receivable
Study Break #4 - Answer
Chapter 1-26
Accounting and IT
Chapter 1-27
Financial Accounting
Objective of Financial Accounting Provide relevant information External parties (Investors, Creditors) Financial Statements
The Audit Trail Traces the accounting cycle Data flow from input to output
Chapter 1-28
A Financial AccountingAudit Trail
Chapter 1-29
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 1-30
Managerial Accounting
Objective Provide relevant information Internal users (Managers)
Components Cost Accounting Budgeting
Chapter 1-31
Features of Managerial Accounting
Chapter 1-32
Cost Accounting
Measure and Control Costs Acquisition, processing, distribution, and selling
activities
AIS Examples Activity-Based Costing Corporate Performance Measurement and Business
Intelligence
Chapter 1-33
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
Chapter 1-34
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
Chapter 1-35
Business Intelligence and Dashboards
Chapter 1-36
Budgeting
Definition Financial projection for the future Short-range and long-range
Usefulness Managerial control Compare actual and budgeted results
Chapter 1-37
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
Study Break #5
Chapter 1-38
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
Study Break #5 - Answer
Chapter 1-39
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
Study Break #6
Chapter 1-40
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
Study Break #6 - Answer
Chapter 1-41
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 1-42
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 1-43
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 1-44
Careers in Accounting Information Systems
IT Auditing and Security Risk analysis with Information Systems Aid financial auditors in evaluation of controls Certified Information Systems Auditors (CISAs) Penetration testing
Chapter 1-45
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 1-46
Copyright
Copyright 2010 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without theexpress written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchasermay make backup copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.
Chapter 1-47
Chapter 1