Accounting Information Systems and the Accountant
The acronym AIS stands for “Accounting Information Standards.”
Accounting information systems must be computerized to be effective.
It is best to view an AIS as an accounting system that must be computerized.
AISs often create information that is useful to non-accountants.
In order to be useful, raw accounting data must be processed by a computer.
The path that data follow in an AIS, for example from manual source document to
completed output report, is called an
A company's audit trail is normally easier to follow under a manual data processing
system compared to a computerized information processing system.
The starting point for an audit trail of a payroll system might be an employee time card.
The starting point for an audit trail of a production department might be the purchase of
The acronym ERP stands for “electronic reporting plan.”
refers to providing too much data to management, often
resulting in managers ignoring it.
An advantage of computerized AISs is that they do
need to be programmed to catch
simple input errors such as entering “4.0” instead of “40.0” for hours worked in a payroll
Computers tend to make audit trails easier to follow because everything is computerized.
The acronym ERP stands for “enterprise reporting system.”
The authors consider accountants to be “knowledge workers.”
Predictive analytics use large data warehouses to help organizations improve
17. As used in this chapter, the acronym SAR stands for “suspicious accounting reports.”
18. Sections of the Patriot Act mandate suspicious activity reporting.
19. One of the motivations for SAR is to identify money laundering activities.
20. The term “Patriot” is an acronym for “providing appropriate tools required to intercept
and obstruct terrorism.”
21. Section 352 of the Patriot Act requires auditors to verify that their organizations have
adequate risk assessment systems.
Accounting systems are useful for performing accounting tasks, but
be used for
such security purposes as countering terrorism.
An example of a corporate scandal that was mentioned in this chapter is the Enron case.
The Sarbanes-Oxley Act includes a provision that prohibits corporations from making
personal loans to executives.
The Sarbanes-Oxley Act prohibits companies from using the same auditing firms for
performing both auditing and management consulting services.
It costs some companies over $1 million to comply with the requirements of the
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