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  • CHAPTER 1:INTRODUCTION TO ACCOUNTING INFORMATION SYSTEMSACCOUNTING INFORMATION SYSTEMS 10eGELINAS DULL WHEELER 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • LEARNING OBJECTIVESAppreciate the complex, dynamic environment in which accounting is practiced.Know the relationship between the AIS and the organizations business processes.Know the attributes of information.Recognize how information is used for different types of decisions and at various levels in the organization. 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • LEARNING OBJECTIVES (CONTD)Recognize how the information system supports the management function.Recognize the accountants role in relation to the current environment for the AIS.Understand how to use this textbook effectively to learn AIS. 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • RESPONSIBILITIES OF ACCOUNTANTS(Occupational Outlook Handbook)Examine financial statements to be sure they are accurate and comply with laws and regulationsCompute taxes owed, prepare tax returns, and ensure that taxes are paid properly and on time.Inspect account books and accounting systems for efficiency and use of accepted accounting procedures.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • RESPONSIBILITIES OF ACCOUNTANTS (CONTD) (Occupational Outlook Handbook)Organize and maintain financial recordsAssess financial operations and make best-practices recommendations to managementSuggest ways to reduce costs, enhance revenues, and improve profits

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • TEXTBOOK THEMESEnterprise Systems integrate business processes and information from all of an organizations functional areas (marketing and sales, cash receipts, purchasing, cash disbursements, human resources, production and logistics, and business and financial reporting).E-business is the application of electronic networks (including the Internet) to undertake business processes between individuals and organizations.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • TEXTBOOK THEMES (CONTD)Internal Control is a process effected by the board of directors, management and other personnel to provide reasonable assurance that organizational objectives will be achieved in: efficiency and effectiveness of operations, reliability of reporting, and compliance with laws and regulations. 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • SARBANES-OXLEY ACT OF 2002Implications for both public and private accountants:Section 404 and PCAOB Auditing Standard No. 5:Management must identify, document, and evaluate significant internal controls.Auditors must report on the effectiveness of the organizations system of internal controls. 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • SARBANES-OXLEY ACT OF 2002 (CONTD)Implications for both public and private accountants:Section 409 of SOX:Requires disclosure to the public on a rapid and current basis of material changes in an organizations financial condition. 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • EXPANDING ROLE OF THE AUDITORHistorically, auditors have performed attest functions to determine the reliability of financial statements Expanding role includes:Nonfinancial information not measured in monetary unitsUse of information technology to create or summarize information from databasesEvaluating information for the assessment of risk 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • ELEMENTS IN THE STUDY OF AIS 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • 2013 NORTH AMERICA TOP TECHNOLOGY INITIATIVES SURVEY UNITED STATESMaintaining and retaining dataSecuring the IT environmentManaging IT risk and complianceEnsuring privacyManaging system implementations 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • 2013 NORTH AMERICA TOP TECHNOLOGY INITIATIVES SURVEY UNITED STATES (CONTD)Preventing and responding to computer fraudEnabling decision support and analyticsGoverning and managing IT investment/spendingLeveraging emerging technologiesManaging vendors and service providers 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • SYSTEMS AND SUBSYSTEMS 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • SYSTEMS AND SUBSYSTEMS (CONTD) 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • SYSTEMS AND SUBSYSTEMS (CONTD)System: A set of interdependent elements that together accomplish specific objectives. A system must have organization, interrelationships, integration, and central objectives.Subsystem: A part of a system. Within limits, any subsystem can be further divided into its component parts or subsystems.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • THE INFORMATION SYSTEM (IS)An information system (IS) or management information system (MIS) is a man-made system that generally consists of an integrated set of computer-based and manual components established to collect, store, and manage data and to provide output information to users. 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • FUNCTIONAL MODEL OF AN INFORMATION SYSTEM 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • THE ACCOUNTING INFORMATION SYSTEM (AIS)Accounting information system (AIS) is a specialized subsystem of the IS that collects, processes and reports information related to the financial aspects of business events.Often integrated and indistinguishable from the overall IS.May be divided into components based on the operational functions supported. Components are called business processes or AIS subsystems. 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • LOGICAL COMPONENTS OF A BUSINESS PROCESS Information process: portion of the overall IS related to a particular business process.Operations process: man-made system consisting of the people, equipment, organization, policies, and procedures whose objective is to accomplish the work of the organization.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • THREE BUSINESS PROCESS COMPONENTS (CONTD)Management process: man-made system consisting of the people, authority, organization, policies, and procedures whose objective is to plan and control the operations of the organization.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • LOGICAL MODEL OF A BUSINESS PROCESS 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • DATA VERSUS INFORMATIONInformation: Data presented in a form that is useful in a decision-making activity. It has value to the decision maker because it reduces uncertainty and increases knowledge about a particular area of concern.Data: Facts or figures in raw form. Represents the measurements of observations of objects and events. To be useful to a decision maker, it must be transformed into information.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • TRANSFORMING DATA INTO INFORMATION 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • TRANSFORMING DATA INTO INFORMATION (CONTD) 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • COBIT 5 EQUIVALENTS TO COBIT 4.1 INFORMATION CRITERIAEffectiveness: Meets the needs of the information consumer who uses it for a specific task. Efficiency: Relates to the process of obtaining and using information so it aligns to the information as a service view. Information is easily obtained and used. Integrity: Free of error and complete.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • COBIT 5 EQUIVALENTS TO COBIT 4.1 INFORMATION CRITERIA (CONTD)Reliability: Regarded as true and credible. More subjective and related to perception, not just factual.Availability: Quality goals under accessibility and security.Confidentiality: Corresponds to the restricted access information quality goal.Compliance: Must conform to specifications and regulations.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • HIERARCHY OF INFORMATION QUALITIES 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • QUALITIES OF INFORMATIONThe effectiveness of information can be measured in many ways:Understandability: Enables users to perceive significance and permits application by the user in a decision-making situation.Relevance: Capable of making a difference in a decision-making situation by reducing uncertainty or increasing knowledge. Timeliness: Available to a decision maker before it loses relevance.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • QUALITIES OF INFORMATION (CONTD)Predictive or feedback value: Improves the decision makers capacity to predict, confirm or correct earlier expectations.Verifiability: High degree of consensus about the information among independent measurers using the same measurement methods.Neutrality or freedom from bias: Objective.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • QUALITIES OF INFORMATION (CONTD)Comparability: Enables users to identify similarities and differences between two pieces of information.Accuracy: Correspondence or agreement between the information and the actual events or objects it represents.Completeness: Degree to which information includes data about every relevant object or event necessary to make a decision and includes that information only once.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • INFORMATION QUALITIES MATRIX 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • MANAGEMENT DECISION MAKINGIntelligence: Searching the environment for conditions calling for a decision.Design: Inventing, developing, and analyzing possible courses of action.Choice: Selecting a course of action. 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • STEPS IN DECISION MAKING 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • HORIZONTAL AND VERTICAL INFORMATION FLOWSHorizontal information flows relate to specific business events, such as one shipment, or to individual inventory items. This information is narrow in scope, detailed, accurate and comes largely from within the organization.Vertical information flows service a multi-level management function from operations and transaction processing through tactical, operations, and strategic management. 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • MANAGEMENT PROBLEM STRUCTURE AND INFORMATION REQUIREMENTS 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • STRUCTURE OF DECISIONSStructured decisions: Those for which all three decision phases (intelligence, design, and choice) are relatively routine or repetitive. Some decisions are so routine that a computer can be programmed to make them.Unstructured decisions: Those for which none of the decision phases (intelligence, design, or choice) are routine or repetitive.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

  • ACCOUNTANTS ROLE IN THE CURRENT BUSINESS ENVIRONMENTDesigner: Application of accounting principles, auditing principles, IS techniques, and systems development methods to design an AIS.User: Accounts perform various functions within organizations that use the AIS. As a user, the accountant should be involved in the AIS design process.Auditor: Provide audit and assurance services. 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

    2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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