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Advanced Accounting Information Systems
Advanced Accounting Information Systems
Day 27
Financial Reporting in an Electronic Environment
October 28, 2009
AnnouncementsAnnouncements
– First XBRL assignment due 11/2
ObjectivesObjectives
Understand basic concepts of the Internet such as TCP/IP, URLs, and web page addresses.
Appreciate why electronic communication is useful to accountants
Know why XBRL is important to financial reporting both external and internal
Understand EDI and why it is important to AISs Know the differences between business to consumer and
business to business e-commerce Appreciate the privacy and security issues associated with e-
commerce Know why business use firewalls, proxy services, and
encryption techniques Understand digital signatures and digital time-stamping
techniques
Question for todayQuestion for today
How do accountants use the Internet?
Question for todayQuestion for today
Identify three newer Internet based technologies that you believe will be important today and in the future for accountants to know about.
How do accountants use the Internet?How do accountants use the Internet?
Email Research and education Participate in e-commerce Regularly evaluate controls that ensure
complete, accurate, and authentic transmissions over the Internet
What is e-commerce?What is e-commerce?
Buying and selling electronically Transmitting funds, goods, services, and/or
data between two businesses or a business and a customer
E-business – automating business processes in general via the Internet – – Retail sales– E-payments– EDI
What is the Internet?What is the Internet?
Collection of local and wide area networks that are connected together via the Internet backbone (main electronic connections of the system)
Internet basics– Interact addresses and software
• Domain address (also called uniform resoruce locator (URL)• IP address – numeric• Uses TCP Internet protocol (transmission control protocol to
deliver specific file to a specific computer at a specific computer location
– Intranets and Extranets – WWW, HTML, and Edgar
Groupware, electronic conferencing, and blogsGroupware, electronic conferencing, and blogs
Groupware
– Allows users to send and receive email,, plus perform a wide range of other document-editing tasks, schedule appointments, update same document, conduct electronic meetings - Exchange, Groupwise (Novelll) Lotus Notes , Exchange/Outlook (Microsoft)
Instant messaging software– Enables remote users to communicate with each other via the
Internet
– Many support audio, video, and electronic conferencing
– Accounting applications• Interview job applications remotely
• Consult with clients about tax or audit problems
• Discuss projects from several remote sites
• Plan corporate budgets
Groupware, electronic conferencing, and blogsGroupware, electronic conferencing, and blogs
Knowledge management– May include groupware
– Allows organization to distribute expertise within the organization (frequently on its INTRAnet)
– Used by large consulting and accounting firms
– Information includes descriptions of clients’ best practices, research, links to business web sites, and customized news
Blogs– Allow users with web browsers and easy-to-use software to publish a personalized diary
online
– Introduces a new way to create, share, and leverage knowledge in an organization
– Enterprise blogs provide companies with easy-to-use tools to manage internal and external information , which in turn affects relationships with customer, partners, investors as well as internal decision makers
XBRL – Financial Reporting on the InternetXBRL – Financial Reporting on the Internet
Exchanging financial information between trading partners often requires more detailed specifications – use of XML
Two differences between HTML and XML– XML tags are extensible (allowing users to define their own tags such
as <SalesRevenue>)– XML tags actually describe the data rather than simply indicate how to
display it Problem with XML tags
– Lack of consistency among users– i.e. <SalesRevenue> vs <Revenue>
XBRL – standardizes the tags that describe financial information in documents for both profit and nonprofit organizations
XBRL – Financial Reporting on the InternetXBRL – Financial Reporting on the Internet
XBRL International XBRL.US XBRL instance documents
– Examples (instances) of a class of documents defined by a standard or specification
To create XBRL instance document– Know standard tags that define such familiar items as net revenues and
operating expenses– Know the rules that govern how to use these tags– Determine if extensions are needed
Electronic CommerceElectronic Commerce
– Retail sales– E-payments and e-wallets– Electronic data interchange
Privacy and Security on InternetPrivacy and Security on Internet
Privacy and identity theft Security Firewalls Intrusion detection systems Value-added networks Proxy servers
Data encryptionData encryption
Techniques that transform plaintext messages into unintellible cypertext
Cyclic substitution
Encryption key DES Secret key cyyptography Public key encryption
Digital Signatures and Digital Time StampingDigital Signatures and Digital Time Stamping
Digital signature– 1994
– Digital certificate– Certificate authority
SEC Fake Web SiteSEC Fake Web Site
www.mcwhortle.com
Questions for FridayQuestions for Friday
What is the key difference between HTML and XML?
Why is XBRL important?