AIS Powerpoint Reviewer

8/9/2019 AIS Powerpoint Reviewer

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Accounting Information

Systems


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Accounting InformationSystems

Accounting information systemscollect and process transaction dataand communicates the nancialinformation to interested parties.

There are many types of systemsand they vary widely. A number of

factors shape these systems such asthe type of business, the volume ofdata management needs and other

factors


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AIS, Business Transactions and

Business Process

Revenue and Return processes, systemsand controls The business transaction thatfalls under these business processes are largevolumes of daily sales, returns, and cash in!owtransactions.

Expenditure and return processes, systemsand controls The business transaction that fallunder these business processes are large volume

of e"penditure, returns and cash out!owtransactions. Payroll and "ed asset purchasetransactions are under this category


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Business Process

Conversion processes, systems,and controls The businesstransaction under this category are

raw materials and wor#$in$progresstransactions.

Administrative processes,

systems and controls Thebusiness transactions that areadministrative are investments,

borrowing and capital transactions.


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Business Process

Administrative processes, systems andcontrols (cont.) All these businesstransactions result in T$accounts setup in the%eneral ledger processes, systems andcontrols, &rom the general ledger, both internaland e"ternal nancial statements aredeveloped. Internal nancial reports might bean aging schedule for accounts receivable or asales inventory status report. '"ternal nancialreports would be the income statement,balance sheet and statement of cash !ows.


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Types of Accounting System

Financial Accounting or nancial reporting,is the process of producing information fore"ternal use usually in the form of &inancialStatements. Based on %AAP and I&(S

Management Accounting producesinformation primarily for internal use of thecompany)s management. The information

produced is generally more detailed than thatproduced for e"ternal use to enable e*ectiveorgani+ation control and fulllment of thestrategic aims and obectives of the company.


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Governmental Accounting also#nown as public accounting orfederal accounting, refers to the type

of accounting information systemused in the public sector.

Tax Accounting refers to

accounting for the ta" relatedmatters. It is governed by ta" rulesprescribed by the ta" laws of a

urisdication


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Forensic Accounting is the use ofaccounting, auditing and investigativetechni-ues in cases of litigation or disputes.

&orensic accountants act as e"pert witness incourts of law in civil and criminal disputesre-uiring an assessment of the nanciale*ects of a loss or the detection of fraud.

ro!ect Accounting refers to the use ofaccounting system to trac# the nancialprogress of a proect through fre-uentnancial reports.


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Types of AccountingSystems

"ocial Accounting also #nown as CorporateSocial Responsibility Reporting and Sustainable

Accounting, refers to the process of reportingimplications of an organi+ation)s activities on it

ecological and social environment. SocialAccounting is primarily reported in the form of'nvironmental (eports accompanying the annualreports of the company. Social accounting is still

in the early stages of development and isconsidered to be a response to the growingenvironmental consciousness amongst the publicat large


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Accounting Software

is an application software that records andprocesses accounting transactions withinfunctional modules such as accounts payable,

accounts receivable, payroll, and trial balance.It functions as an accounting informationsystem. It may be developed in$house by thecompany or organi+ation using it, may bepurchased from a third party, or may be acombination of a third$party applicationsoftware pac#age with local modications. Itvaries greatly in its comple"ity and cost.


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Accounting Software odule

Core modules Accounts receiva#le/where the company enters money received

Accounts paya#le/where the company enters its bills and paysmoney it owes

General ledger/the company0s 1boo#s1

$illing/where the company produces invoices to clients2customers

"toc%&inventory/where the company #eeps control of itsinventory

urc'ase order/where the company orders inventory

"ales order/where the company records customer orders for the

supply of inventory

$oo%%eeping/where the company records collection and payment


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oncore modules *e#t collection/where the company trac#s attempts to

collect overdue bills 3sometimes part of accounts receivable4

Electronic payment processing

Expense/where employee business$related e"penses areentered

+nuiries/where the company loo#s up information on screenwithout any edits or additions

ayroll/where the company trac#s salary, wages, andrelated ta"es

Reports/where the company prints out data

Times'eet/where professionals 3such as attorneys andconsultants4 record time wor#ed so that it can be billed toclients


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oncore modules urc'ase reuisition/where re-uests for

purchase orders are made, approved and trac#ed

Reconciliation/compares records from parties atboth sides of transactions for consistency

*rill do-n

ournals

*epartmental accounting

"upport /or value added taxation

5alculation of statutory holdbac#


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Types of AccountingSoftware

ersonal accountingPersonal accounting software is mainly targetedtowards home users, supporting accounts payable$

type accounting transactions, managing budgets,and simple account reconciliation, at theine"pensive end of the mar#et.


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0o-end mar%et

At the low$end of the business mar#ets, ine"pensive applicationssoftware allows most general business accounting functions to be

performed. Suppliers fre-uently serve a single national mar#et,while larger suppliers o*er separate solutions in each nationalmar#et.

any of the low end products are characteri+ed by being 1single$

entry1 products, as opposed to double$entry systems seen inmany businesses. Some products have considerable functionalitybut are not considered %AAP or I&(S2&ASB compliant. Some low$end systems do not have ade-uate security nor audit trails.


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Midmar%et

The mid$mar#et covers a wide range of business software that may be capable ofserving the needs of multiple national accountancy standards and allowaccounting in multiple currencies.

In addition to general accounting functions, the software may include integrated oradd$on management information systems, and may be oriented towards one ormore mar#ets, for e"ample with integrated or add$on proect accounting modules.

Software applications in this mar#et typically include the following features6

7citation needed8

Industry$standard robust databases

Industry$standard reporting tools

Tools for conguring or e"tending the application 3e.g. an S9:4, access to programcode.


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1ig'end mar%et

The most comple" and e"pensive business accounting software isfre-uently part of an e"tensive suite of software often #nown as

enterprise resource planning 3'(P4 software.

These applications typically have a very long implementation period,often greater than si" months. In many cases, these applications aresimply a set of functions which re-uire signicant integration,conguration and customi+ation to even begin to resemble an

accounting system.

The advantage of a high$end solution is that these systems aredesigned to support individual company specic processes, as they arehighly customi+able and can be tailored to e"act business re-uirements.This usually comes at a signicant cost in terms of money andimplementation time.


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2ertical mar%etSome business accounting software is designed for specicbusiness types. It will include features that are specic to thatindustry.

The choice of whether to purchase an industry$specicapplication or a general$purpose application is often verydi;cult. 5oncerns over a custom$built application or onedesigned for a specic industry include6

Smaller development team

Increased ris# of vendor business failing

(educed availability of support


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2ertical mar%etThis can be weighed up against6

8

Point of sale 3retail4

(eal estate investment trust

5hild care management software

anagement for Boo#selling


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Information TechnologyAudit

An in/ormation tec'nology audit,or in/ormation systems audit, is an e"aminationof the management controls within an Informationtechnology 3IT4 infrastructure. The evaluation of

obtained evidence determines if the informationsystems are safeguarding assets, maintaining dataintegrity, and operating e*ectively to achieve theorgani+ation0s goals or obectives.

IT audits are also #nown as 1automated dataprocessing 3A9P4 audits1 and 1computer audits1.

They were formerly called 1electronic dataprocessing 3'9P4 audits1.


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Purpose of 5omputer Audit

to evaluate the system0s internal controldesign and e*ectiveness

e;ciency and security protocols, development

processes and IT governance or oversight. evaluate the systems that are in place to

guard an organi+ation0s information.

information technology audits are used to

evaluate the organi+ation0s ability to protectits information assets and to properly dispenseinformation to authori+ed parties.


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5omputer Audit

'valuate the &ollowing @ill the organi+ation0s computer systems

be available for the business at all times

when re-uired 3#nown as availability4 @ill the information in the systems be

disclosed only to authori+ed users3#nown as security and condentiality4

@ill the information provided by thesystem always be accurate, reliable, andtimely 3measures the integrity4


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Types of 5omputer Audit

Tec'nological innovation process audit. This audit constructs aris# prole for e"isting and new proects. The audit will assess thelength and depth of the company0s e"perience in its chosentechnologies, as well as its presence in relevant mar#ets, theorgani+ation of each proect, and the structure of the portion of the

industry that deals with this proect or product, organi+ation andindustry structure.

+nnovative comparison audit. This audit is an analysis of theinnovative abilities of the company being audited, in comparison toits competitors. This re-uires e"amination of company0s research anddevelopment facilities, as well as its trac# record in actually

producing new products. Tec'nological position audit6 This audit reviews the technologies

that the business currently has and that it needs to add. Technologiesare characteri+ed as being either 1base1, 1#ey1, 1pacing1 or1emerging1.


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&ive 5ategories of 5omputerAudit

"ystems and Applications6 An audit to verify that systems and applicationsare appropriate, are e;cient, and are ade-uately controlled to ensure valid,reliable, timely, and secure input, processing, and output at all levels of asystem0s activity.

+n/ormation rocessing Facilities6 An audit to verify that the processingfacility is controlled to ensure timely, accurate, and e;cient processing of

applications under normal and potentially disruptive conditions. "ystems *evelopment6 An audit to verify that the systems under

development meet the obectives of the organi+ation, and to ensure that thesystems are developed in accordance with generally accepted standardsfor systems development.

Management o/ +T and Enterprise Arc'itecture6 An audit to verify that ITmanagement has developed an organi+ational structure and procedures toensure a controlled and e;cient environment for information processing.

Client&"erver, Telecommunications, +ntranets, and Extranets6 An auditto verify that telecommunications controls are in place on the client 3computerreceiving services4, server, and on the networ# connecting the clients andservers.


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&undamental Types of5ontrols

Protective2Preventative 5ontrols

9etective 5ontrols

(eactive25orrective 5ontrols.


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Two Types of Auditors andAudits

Internal $ IS auditing is usually a part ofaccounting internal auditing, and is fre-uentlyperformed by corporate internal auditors.

'"ternal $An e"ternal auditor reviews thendings of the internal audit as well as theinputs, processing and outputs of informationsystems. The e"ternal audit of information

systems is fre-uently a part of the overalle"ternal auditing performed by a 5ertiedPublic Accountant 35PA4 rm.


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IT Audit Process

The following are basic steps inperforming the Information TechnologyAudit Process678

C. Planning

D. Studying and 'valuating 5ontrols

E. Testing and 'valuating 5ontrols

. (eportingF. &ollow$up
http://en.wikipedia.org/wiki/Information_technology_audit%23cite_note-4http://en.wikipedia.org/wiki/Information_technology_audit%23cite_note-4


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Professional 5ertications

5ertied Information Systems Auditor 35ISA4

5ertied in (is# and Information Systems5ontrol 35(IS54

5ertied Internal Auditor 35IA4 5ertication and Accreditation Professional 35AP4

5ertied 5omputer Professional 355P4

5ertied Information Privacy Professional 35IPP4

5ertied Information Systems SecurityProfessional 35ISSP4

5ertied Information Security anager 35IS4


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5ertied Public Accountant 35PA4

5ertied Internal 5ontrols Auditor 35I5A4

&orensics 5ertied Public

Accountant 3&5PA4 5ertied &raud '"aminer 35&'4

5hartered Accountant 35A4

5ertied 5ommercial ProfessionalAccountant 355PA4

5ertied Accounts '"ecutive 35'A4


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5ertied Professional Internal Auditor 35PIA4

5ertied Professional anagementAuditor 35PA4

5hartered 5ertied Accountant 355A4 %IA5 5ertied System G =etwor#

Auditor 3%S=A47

5ertied Information TechnologyProfessional 35ITP4, to certify, auditorsshould have E years e"perience.


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Assignment

(esearch on a company that hasSocial Accounting as part of theirnancial statement published in

@@@.


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Seatwor#

Based on your research in SocialAccounting, what do you thin# is themost common theme or goal of the

companies in using 5S(

3=ot less than DHH words4

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