Chapter 1 Accounting Information Systems and the Accountant
INTRODUCTION WHAT ARE ACCOUNTING INFORMATION SYSTEMS?
Accounting Information Systems—A Deﬁnition Accounting Information Systems and Their Role in Organizations
The Annual Report Universal Concrete Products Ross, Sells, and Young, LLP
REFERENCES AND RECOMMENDED READINGS ANSWERS TO TEST YOURSELF
WHAT’S NEW IN ACCOUNTING INFORMATION SYSTEMS?
Suspicious Activity Reporting Countering Terrorism Corporate Scandals and Accounting The Sarbanes-Oxley and Patriot Acts
ACCOUNTING AND IT
Financial Accounting Managerial Accounting Auditing Taxation
CAREERS IN ACCOUNTING INFORMATION SYSTEMS
Traditional Accounting Systems Consulting Information Technology Auditing and Security
After reading this chapter, you will: 1. Be able to distinguish between such terms as ‘‘systems,’’ ‘‘information systems,’’ ‘‘information technology,’’ and ‘‘accounting information systems.’’ 2. Learn how information technology (IT) inﬂuences accounting systems. 3. Be familiar with suspicious activity reporting. 4. Understand how ﬁnancial reporting is changing with advances in IT, such as XBRL. 5. Appreciate how IT allows management accountants to use business intelligence to create dashboards and scorecards. 6. Know why auditors provide a variety of assurance services. 7. Be more aware of what is new in the area of accounting information systems. 8. Be familiar with career opportunities that combine accounting and IT knowledge and skills.
AIS AT WORK—CONSULTING WORK FOR CPAs SUMMARY KEY TERMS YOU SHOULD KNOW TEST YOURSELF DISCUSSION QUESTIONS PROBLEMS
PART ONE / An Introduction to Accounting Information Systems
‘‘The accounting industry has always been paper-driven. Now, it is becoming technology driven.’’ Maureen Link, ‘‘3G Technology Will Change the Way You Work’’ Pennsylvania CPA Journal (Spring 2003), p. 19.
The study of accounting information systems (AISs) is, in large part, the study of the application of information technology (IT) to accounting systems. This chapter describes the ways that information technology affects ﬁnancial accounting, managerial accounting, auditing, and taxation. We begin by answering the question ‘‘what are accounting information systems’’ and then look at some new developments in the ﬁeld. Following this, we will examine some traditional roles of AISs in commerce. Why should you study accounting information systems? There are many reasons, which we will review brieﬂy in this chapter, but one of the most important is because of the special career opportunities that will enable you to combine your study of accounting subjects with your interest in computer systems. In today’s job market, accounting employers expect new hires to be computer literate. In addition, a large number of specialized employment opportunities are available to those students who possess a deeper understanding of computer subjects and can bring advanced computer skills to accounting jobs. The last part of this chapter describes a number of special career opportunities for those with an interest in AISs.
WHAT ARE ACCOUNTING INFORMATION SYSTEMS?
What do the following have in common: (1) a shoebox ﬁlled with a lawyer’s expense receipts, (2) the monthly payroll spreadsheet in the computer of an auto-repair shop, (3) the Peachtree accounting system for a small chain of dry-cleaning stores, and (4) the ERP (Enterprise Resource Planning) system of a large manufacturer? The answer is that they are all examples of accounting information systems. How can such a wide range of accounting applications each qualify as an accounting information system? The answer is that this is the essence of what AISs are—collections of raw and stored data (that together typically serve as inputs), processing methods (usually called ‘‘procedures’’), and information (outputs) that serve useful accounting purposes. Do such systems have to be computerized?...
References: AND RECOMMENDED READINGS
Beaumier, Carol M., ‘‘Anti-Money-Laundering Compliance: Elements of a Successful Program’’ Bank Accounting & Finance Vol. 21, No. 2 (February 2008), pp. 39–42. Boehmer, Jay. ‘‘Cos Face Sarbanes-Oxley Law’’ Business Travel News Vol. 21, No. 1 (January 19, 2004), pp. 1–2. Cheney, Glenn. ‘‘Are Auditors Patriot Act Ready?’’ Accounting Today Vol. 21, No. 22 (December 17, 2007), p. 14. Coustan, Harvey, Linda M. Leinicke, W. Max Rexroad, & Joyce A. Ostrosky, ‘‘Sarbanes-Oxley: What it Means to the Marketplace’’ Journal of Accountancy (February 2004), pp. 43–47. Hannon, Neal J., ‘‘The Lead Singer Gets a Chorus,’’ Strategic Finance, Vol. 87, Iss. 11 (May 2006), pp. 59–60. Hemphill, Thomas A. ‘‘Corporate Responsibility and the War on Terrorism’’ Business Horizons Vol. 46, No. 3 (May/June 2003), pp. 13–17. Holbrook, Kevin. ‘‘Adding Value with Analytics,’’ Strategic Finance (November 2004), p. 40–43. Kaplan, Robert S., & David P. Norton, ‘‘Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part II,’’ Accounting Horizons (June 2001), pp. 147–160. Kerstetter, Jim. ‘‘Sarbanes-Oxley Sparks a Software Boom,’’ Business Week (January 12, 2004), p. 94. Johnston, Randolph P., ‘‘A Tour of Tomorrow’s Technology,’’ Journal of Accountancy, Vol.200, No. 4 (October 2005), pp. 95–96. Malykhina, Elena. ‘‘XBRL: More than a Must-Do,’’ InformationWeek, Iss. 1091 (May 29, 2006), pp. 57–59. Rainer, R. Kelly Jr., Efraim Turban, & Richard E. Potter. Introduction to Information Systems. Hoboken, NJ: John Wiley & Sons, Inc. (2007).
CHAPTER 1 / Accounting Information Systems and the Accountant
Reynolds, Bob. ‘‘How the Terrorists Helped the Taxman’’ Accountancy Vol. 131, No. 1316 (April 2003), pp. 44–46. Richards, Dave. ‘‘Envisioning Our Future,’’ Internal Auditor (August 2001), pp. 60–67. Thottam, Jyoti. ‘‘Inside Business: What Can America Make’’ Time Magazine (January 12, 2004), pp. 77 ff. Tie, Robert. ‘‘XBRL: It’s Unstoppable,’’ Journal of Accountancy (August 2005), Vol. 200, Iss. 2, pp. 32–35. Vardi, Nathan. ‘‘Auditing Arafat’’ Forbes Magazine, Vol. 171, No. 6 (March 17, 2003) pp. 49–51. Willis, Mike. ‘‘XBRL and Data Standardization: Transforming the Way CPAs Work,’’ Journal of Accountancy, Vol. 199, Iss. 3 (March 2005), pp. 80–81.
ANSWERS TO TEST YOURSELF
1. a 2. c 3. c 4. c 5. c 6. c 7. d 8. a 9. b 10. e 11. d
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