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 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 Copyright © 2015 John Wiley & Sons, Inc All rights reserved 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 Copyright © 2015 John Wiley & Sons, Inc All rights reserved 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) Copyright © 2015 John Wiley & Sons, Inc All rights reserved 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 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Careers in Accounting Information Systems • Predictive Analytics – Profession changing – Statistical analysis – Data modeling – Data mining – Data Warehouses Copyright © 2015 John Wiley & Sons, Inc All rights reserved Accounting and IT Copyright © 2015 John Wiley & Sons, Inc All rights reserved 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 Copyright © 2015 John Wiley & Sons, Inc All rights reserved 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 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Managerial Accounting • Objective – Provide relevant information – Internal users (Managers) • Components – Cost Accounting – Budgeting 10 Copyright © 2015 John Wiley & Sons, Inc All rights reserved AIS and ERP • Overlapping of the Systems – Provide same information – Emphasize business processes – Integration into seamless databases 25 Copyright © 2015 John Wiley & Sons, Inc All rights reserved 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 26 Copyright © 2015 John Wiley & Sons, Inc All rights reserved 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 27 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Study Break #3 Which of the following is likely to be information rather than data? A.Sales price B Customer number C Net profit D Employee name 28 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Study Break #4 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 29 Copyright © 2015 John Wiley & Sons, Inc All rights reserved What’s New in AIS? • Cloud Computing • Sustainability Reporting • Suspicious Activity Reporting • Forensic Accounting, Governmental Accountants, and Terrorism • Corporate Scandals and Accounting 30 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Cloud Computing 31 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Disadvantages of Cloud Computing • Reliability of Internet Connection • Data Security Measures of Provider • Quality of Service • Reliability of Service Provider 32 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Sustainability Reporting • Reporting Nonfinancial Measures – Impacts on income, value, or future performance 33 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Suspicious Activity Reporting 34 Copyright © 2015 John Wiley & Sons, Inc All rights reserved 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 35 Copyright © 2015 John Wiley & Sons, Inc All rights reserved 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 36 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Study Break #5 The acronym SAR stands for: A Simple accounting receipts B Suspicious accounting revenue C Suspicious activity reporting D Standard accounts receivable 37 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Study Break #6 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 38 Copyright © 2015 John Wiley & Sons, Inc All rights reserved AIS at Work • The cost of not filing a SAR • Filing a SAR in not optional 39 Copyright © 2015 John Wiley & Sons, Inc All rights reserved ... Combine accounting and advanced computer skills Copyright © 2015 John Wiley & Sons, Inc All rights reserved Careers in Accounting Information Systems • Traditional Accounting – Understanding of accounting. .. Understanding of accounting and information systems – Certified Information Technology Professional • Systems Consulting – Designing systems and reengineering processes – Software and hardware selection... used by managers D A type of blackboard used by managers to present useful information to others 18 Copyright © 2015 John Wiley & Sons, Inc All rights reserved What are AISs • Accounting and Information