SM 1.1
s
, Chapter 1 s
ACCOUNTING INFORMATION SYSTEMS AND THE ACCOUNTANT s s s s s
Discussion Questions s
1-1. The answer to this question will vary with each university’s location. However, it is
s s s s s s s s s s s s s
s likely most students will reveal that their parents are employed in non-manufacturing jobs.
s s s s s s s s s s s s
Instructors may wish to emphasize that the large numbers of service sector employees and
s s s s s s s s s s s s s
s knowledge workers reflect a trend. s s s s
1-2. This question encourages students to think about some of the information
s s s s s s s s s s
reporting limitations imposed by the traditional accounting general ledger architecture.
s s s s s s s s s s
s Other business activities (or business events) that do not require journal entries include (1)
s s s s s s s s s s s s s
s obtaining a line of credit, (2) issuing purchase requisitions or purchase orders, (3) signing
s s s s s s s s s s s s s
s contracts, (4) hiring a new executive, and (5) sending financial information to investors or
s s s s s s s s s s s s s
s bank loan personnel.
s s
Instructors may wish to point out that important information about a company’s business
s s s s s s s s s s s s
s activities may be included in an annual report outside the financial statements. The
s s s s s s s s s s s s
management letters and footnotes in annual reports may reveal much about a company’s
s s s s s s s s s s s s s
s future prospects.
s
Managers have access to much more information than what is published in financial reports.
s s s s s s s s s s s s s
s Whether or not they would like to have access to more non-financial information, or if they
s s s s s s s s s s s s s s s
s would prefer that the accounting information system capture data about business events
s s s s s s s s s s s
s rather than accounting transactions, is debatable. It may also be a function of the accounting
s s s s s s s s s s s s s s
system in a particular company. Investors may wish to have more information available to
s s s s s s s s s s s s s s
s them but the downside is that too much information can be just as problematic as too little
s s s s s s s s s s s s s s s s
s information.
1-3. The financial accounting systems we have known for more than 500 years are
s s s s s s s s s s s s
SM 1.2 s
,s changing dramatically as a result of advances in information technology and financial accounting
s s s s s s s s s s s s
s software. For example, databases allow accountants to collect and store all the data
s s s s s s s s s s s s
s (accounting transaction data and non-financial data) about a business activity or event in one
s s s s s s s s s s s s s
s system, allowing those needing such information to retrieve it quickly, efficiently, and
s s s s s s s s s s s
specifically in any format they wish. Financial data can also be more easily linked to
s s s s s s s s s s s s s s s
s nonfinancial data because of database technology. Thus, it is likely that financial reporting will
s s s s s s s s s s s s s
s undergo tremendous change in the next few years as we learn to use technology, including
s s s s s s s s s s s s s s
s artificial intelligence, more effectively in the design of AISs.
s s s s s s s s
ERP systems are another example of the information age's impact on financial accounting. Now,
s s s s s s s s s s s s s
s organizations capture more financial and non-financial data and produce more information
s s s s s s s s s s
s than ever before. This allows companies to integrate their information systems, better forecast
s s s s s s s s s s s s
s everything from raw materials requirements to finished product production, and to perform
s s s s s s s s s s s
s more sophisticated analyses of important business functions. For instance, sales can be
s s s s s s s s s s s
s examined at many different levels and organized according to criteria such as geography,
s s s s s s s s s s s s
s customer, product, or salesperson. s s s
SM 1.3 s
, One of the most important changes in AISs is the way these systems will gather financial
s s s s s s s s s s s s s s s
s information in the future. Although many of these systems will continue to capture data in
s s s s s s s s s s s s s s
s traditional batch mode or at POS sites, we expect newer systems to collect more of it on mobile
s s s s s s s s s s s s s s s s s
s devices—for example, cell phones, PDAs, and digital cameras. Because more employees and
s s s s s s s s s s s
s working at home these days, “digital commuting” may be another trend.
s s s s s s s s s s
1-4. The objective of a company’s financial statements is to communicate relevant
s s s s s s s s s s
s financial information to such external parties as stockholders, investors, and government
s s s s s s s s s s
s agencies. Issuing financial statements in XBRL formats contributes to this objective by making
s s s s s s s s s s s s
s such financial data more searchable, comparable, informative, and therefore useful. Also,
s s s s s s s s s s
s because XBRL enables companies to use standard tags to identify specific accounting values, the
s s s s s s s s s s s s s
s language itself imposes a greater degree of standardization in the informational content of the
s s s s s s s s s s s s s
s reports. Finally, XBRL helps government agencies gather financial data that are more
s s s s s s s s s s s
s consistent, easier to understand, self-checking, and more quickly communicated. Chapter 2
s s s s s s s s s s
s contains more about XBRL, including the idea that the language also enables its users to verify
s s s s s s s s s s s s s s s
s accounting relationships as assets = liabilities + stockholder equity.
s s s s s s s s
1-5. The questions asked here about suspicious activity reporting (SAR) require opinions
s s s s s s s s s s
s from students. Regarding the first question, which asks if SAR activity should be a legal matter,
s s s s s s s s s s s s s s s
s there is little room for disagreement because so much of SAR is mandated by federal
s s s s s s s s s s s s s s
s legislation such as the Annunzio-Wylie Anti-Money Laundering Act of 1992, the Bank Secrecy
s s s s s s s s s s s s
s Act of 1996, and the Patriot Act of 2001. Although there are statistics on the number of SAR
s s s s s s s s s s s s s s s s s
s filings, less is known about how much of what appears to be suspicious are in fact violations of
s s s s s s s s s s s s s s s s s
s federal statutes. s
1-6. The example given in the question demonstrates one way in which
s s s s s s s s s s
s computerization has refined cost estimation and thus has impacted managerial accounting. s s s s s s s s s s
s However, IT has impacted almost every area of managerial accounting (and decision
s s s s s s s s s s s
s making). Consider, for example, the emergence of such concepts as just-in-time systems,
s s s s s s s s s s s
s computer integrated manufacturing systems, manufacturing resource planning systems,
s s s s s s s
SM 1.4 s
s
, Chapter 1 s
ACCOUNTING INFORMATION SYSTEMS AND THE ACCOUNTANT s s s s s
Discussion Questions s
1-1. The answer to this question will vary with each university’s location. However, it is
s s s s s s s s s s s s s
s likely most students will reveal that their parents are employed in non-manufacturing jobs.
s s s s s s s s s s s s
Instructors may wish to emphasize that the large numbers of service sector employees and
s s s s s s s s s s s s s
s knowledge workers reflect a trend. s s s s
1-2. This question encourages students to think about some of the information
s s s s s s s s s s
reporting limitations imposed by the traditional accounting general ledger architecture.
s s s s s s s s s s
s Other business activities (or business events) that do not require journal entries include (1)
s s s s s s s s s s s s s
s obtaining a line of credit, (2) issuing purchase requisitions or purchase orders, (3) signing
s s s s s s s s s s s s s
s contracts, (4) hiring a new executive, and (5) sending financial information to investors or
s s s s s s s s s s s s s
s bank loan personnel.
s s
Instructors may wish to point out that important information about a company’s business
s s s s s s s s s s s s
s activities may be included in an annual report outside the financial statements. The
s s s s s s s s s s s s
management letters and footnotes in annual reports may reveal much about a company’s
s s s s s s s s s s s s s
s future prospects.
s
Managers have access to much more information than what is published in financial reports.
s s s s s s s s s s s s s
s Whether or not they would like to have access to more non-financial information, or if they
s s s s s s s s s s s s s s s
s would prefer that the accounting information system capture data about business events
s s s s s s s s s s s
s rather than accounting transactions, is debatable. It may also be a function of the accounting
s s s s s s s s s s s s s s
system in a particular company. Investors may wish to have more information available to
s s s s s s s s s s s s s s
s them but the downside is that too much information can be just as problematic as too little
s s s s s s s s s s s s s s s s
s information.
1-3. The financial accounting systems we have known for more than 500 years are
s s s s s s s s s s s s
SM 1.2 s
,s changing dramatically as a result of advances in information technology and financial accounting
s s s s s s s s s s s s
s software. For example, databases allow accountants to collect and store all the data
s s s s s s s s s s s s
s (accounting transaction data and non-financial data) about a business activity or event in one
s s s s s s s s s s s s s
s system, allowing those needing such information to retrieve it quickly, efficiently, and
s s s s s s s s s s s
specifically in any format they wish. Financial data can also be more easily linked to
s s s s s s s s s s s s s s s
s nonfinancial data because of database technology. Thus, it is likely that financial reporting will
s s s s s s s s s s s s s
s undergo tremendous change in the next few years as we learn to use technology, including
s s s s s s s s s s s s s s
s artificial intelligence, more effectively in the design of AISs.
s s s s s s s s
ERP systems are another example of the information age's impact on financial accounting. Now,
s s s s s s s s s s s s s
s organizations capture more financial and non-financial data and produce more information
s s s s s s s s s s
s than ever before. This allows companies to integrate their information systems, better forecast
s s s s s s s s s s s s
s everything from raw materials requirements to finished product production, and to perform
s s s s s s s s s s s
s more sophisticated analyses of important business functions. For instance, sales can be
s s s s s s s s s s s
s examined at many different levels and organized according to criteria such as geography,
s s s s s s s s s s s s
s customer, product, or salesperson. s s s
SM 1.3 s
, One of the most important changes in AISs is the way these systems will gather financial
s s s s s s s s s s s s s s s
s information in the future. Although many of these systems will continue to capture data in
s s s s s s s s s s s s s s
s traditional batch mode or at POS sites, we expect newer systems to collect more of it on mobile
s s s s s s s s s s s s s s s s s
s devices—for example, cell phones, PDAs, and digital cameras. Because more employees and
s s s s s s s s s s s
s working at home these days, “digital commuting” may be another trend.
s s s s s s s s s s
1-4. The objective of a company’s financial statements is to communicate relevant
s s s s s s s s s s
s financial information to such external parties as stockholders, investors, and government
s s s s s s s s s s
s agencies. Issuing financial statements in XBRL formats contributes to this objective by making
s s s s s s s s s s s s
s such financial data more searchable, comparable, informative, and therefore useful. Also,
s s s s s s s s s s
s because XBRL enables companies to use standard tags to identify specific accounting values, the
s s s s s s s s s s s s s
s language itself imposes a greater degree of standardization in the informational content of the
s s s s s s s s s s s s s
s reports. Finally, XBRL helps government agencies gather financial data that are more
s s s s s s s s s s s
s consistent, easier to understand, self-checking, and more quickly communicated. Chapter 2
s s s s s s s s s s
s contains more about XBRL, including the idea that the language also enables its users to verify
s s s s s s s s s s s s s s s
s accounting relationships as assets = liabilities + stockholder equity.
s s s s s s s s
1-5. The questions asked here about suspicious activity reporting (SAR) require opinions
s s s s s s s s s s
s from students. Regarding the first question, which asks if SAR activity should be a legal matter,
s s s s s s s s s s s s s s s
s there is little room for disagreement because so much of SAR is mandated by federal
s s s s s s s s s s s s s s
s legislation such as the Annunzio-Wylie Anti-Money Laundering Act of 1992, the Bank Secrecy
s s s s s s s s s s s s
s Act of 1996, and the Patriot Act of 2001. Although there are statistics on the number of SAR
s s s s s s s s s s s s s s s s s
s filings, less is known about how much of what appears to be suspicious are in fact violations of
s s s s s s s s s s s s s s s s s
s federal statutes. s
1-6. The example given in the question demonstrates one way in which
s s s s s s s s s s
s computerization has refined cost estimation and thus has impacted managerial accounting. s s s s s s s s s s
s However, IT has impacted almost every area of managerial accounting (and decision
s s s s s s s s s s s
s making). Consider, for example, the emergence of such concepts as just-in-time systems,
s s s s s s s s s s s
s computer integrated manufacturing systems, manufacturing resource planning systems,
s s s s s s s
SM 1.4 s
