Teaching the Linkage Between Accounting Software and Database

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					 Teaching the Linkage
 Between Accounting
Software and Database
Management Systems

      Dr. Edward R. Walker
        Dr. Mary F. Sheets
         Dr. Mary D. Teal
  University of Central Oklahoma
         Purpose of Study
• To highlight the skills and core
  competencies that should be introduced in
  an accounting information systems course.
• To propose a project will introduce these
  competencies and bring relevance and
  active learning to the accounting systems
           What is an AIS
• Collects data
• Records data
• Stores data
• Processes data
• Produces reports to aid decision makers in
  making the best decision regarding use of
  organizational resources
• Protects data
       Objectives of Project
• Address student of environmental factors
  affecting AIS development and operation
• Address student perceptions of the role
  that relational database management
  systems play in AIS function
• Help students understand the relationship
  between the structure and operation of an
  AIS and a DBMS
         Research Background
• Need for relevance in accounting curriculum
  – Albrecht and Sack (2000)
  – AICPA (2003)
• Accounting Information Systems curriculum—
  VERY diverse methods
  –   Heagy and McMickle (1988)
  –   Bryant (1999)
  –   Bain, Blankley and Smith (2002)
  –   Fordham (2005)
  –   Lin and Smith (2006)
AICPA Core Competencies and
       the AIS Course
• Daigle, Hayes, and Hughes (2007)
  – Three functional competencies in the AIS
    • Risk analysis
    • Leverage technology
    • Research
• The approach proposed by this study will
  help students develop these competencies
  along with problem solving and decision
 What Should be Accomplished in
        an AIS Course?
• Educate on what comprises an accounting
  information system (AIS)—hardware, software,
  and people
• Educate on the functions of an AIS—data
  processing, reporting and security.
• Educate on factors influencing the AIS—internal
  and external environment
• Educate on database management systems and
  how they relate to accounting software
• Why not make the course a comprehensive
  course where students can apply knowledge
  that they have learned in previous courses?
External Factors

  Competition            Industry             Product

                        Reporting          Organizational
Form of Business
                       Requirements          Structure

Internal Factors

            Environmental Factors Influencing
        Accounting Information System Development
 Environmental Factors Influencing
             the AIS
• External
  – Product
  – Competition
  – Industry

• Internal
  – Form of Business
  – Reporting Requirements
  – Organizational Structure

Chart of Accounts   Customers     Vendors      Product


Internal Controls
                            AIS               Data Security


  Financial         Managerial
                                   Checks           Invoices
 Statements          Reports

                    Factors Influencing
           Accounting Information System Function
 How Do Today’s Students Learn?
• Students prefer learning with a purpose.
  – Specifically defined goals
  – Assignments related to those goals
• Students respond positively to active learning.
  – Involvement through applied exercises enhances
    learning more than just lecturing and exams.
      What Do Students Learn?
• Financial Accounting—Journalizing
• Managerial/Cost Accounting—Cost
  tracking and budgeting
• Taxation—Forms of business
• Auditing—Internal control and transaction
            What Knowledge
           Do Students Lack?
• Procedures for establishing a new
  – EIN application
  – Corporate registration
• Knowledge of costs that should be directly
• Ability to set up an efficient chart of
           What Knowledge
          Do Students Lack?
• Payroll and Sales Tax Regulation
• Practical Application of Internal Controls
• Data security issues
• Budgeting techniques
• Preparation and Interpretation of Reports
  for Financial and Managerial Use
• Operation of a database management
  system (DBMS)
                Three Step Approach
                to Developing an AIS
                         •Nature of Company and Product
      Review of          •Environment in which the company operates
                         •Company Setup and Reporting Requirements
 Internal and External
                         •Organizational Setup and Flowcharting
Environmental Factors    •Assignment of Responsibilities and Internal

                         •Company Setup
                         •Internal Control for AIS
Study of AIS Software    •Transaction Processing in AIS
                         •Reporting in AIS
                         •Data Security

                         •Introduction to DBMS concepts
 Study of Database       •Creation of tables, forms, reports, queries
Management Systems       •Illustrate link between accounting software
                           and DBMS systems
 Why Should This Be Introduced?
• Gives students a chance to incorporate
  and apply all knowledge they have learned
  in accounting classes.
• Provides a good foundation for students
  entering the workplace
  – Many employers want candidates with
    knowledge of an accounting program.
  – Some employers want candidates with a
    general knowledge of database management
 Why Should This Be Introduced?
• It is not possible to directly view the
  architecture of an accounting software
  program, because the program is tightly
  encrypted; this method will simulate the
• Students will benefit from the knowledge
  of database management programs.
 How Can This Be Accomplished?
• Assign a project that requires an
  accounting package
  – Company Setup
     • Legal formation
  – Software Setup
     • Chart of Accounts
     • Users and Passwords
     • Customers
     • Vendors
  – Transaction entry
  – Financial and managerial report creation
  – Budgeting
  – Data Security Issues and Preventive Measures
How Can This be Accomplished?
Use database management software to
 simulate the accounting package
– Use MS-Access® as an example
   • Create Tables with links and referential integrity
   • Create Forms
   • Create Reports
   • Create Queries
 How Can This be Accomplished?
• Use the same data for the general ledger
  application and the database application.
• Illustrate the linked table structure in the
  database programs
• Demonstrate to the students that the
  same data may be used to generate
  similar reports
 How Can This be Accomplished?
• It is not necessary to recreate the entire
  company in the DBMS program.
  – Sales and returns
  – Purchases and inventory
        Teaching Procedures
• Use a traditional textbook to discuss the systems
  concepts and data management.
• Introduce the accounting software and company
  setup at the point where environmental factors
  are being reviewed.
• Discuss software security issues and division of
  responsibilities related to each business cycle
  when introducing the accounting software.
• Discuss reporting issues related to content and
  internal control.
• Reintroduce data management after completion
  of the accounting software portion of the project.
      Learning Objectives—
  Sales and Cash Receipts Cycle
• Compare software generated documents
  with manual documents
• Identify control procedures for automated
• Learn procedures for recording
  transactions in the accounting package
• Learn how to create reports related to this
 Teaching Procedures—DBMS
• Introduce the DBMS concepts in a freestanding
  lecture after completion of accounting software
• Have students analyze the structure of an
  existing DBMS and the relationship between the
• Have students set up additional tables and
• Show the relationship between the AIS and
  the DBMS program. Reduce the apathy and
  anxiety about learning DBMS programs.
                         User Inputs

                      Data Input Forms

Data Entry Controls
                          DBMS              Data Tables



                      Factors Influencing
                        DBMS Function
  Relationship between AIS
Functions and DBMS Structure

    The user interface on an AIS is directly related
      to the structure of the DBMS that drives it.
       How Do We Measure
       Increase in Learning?
• Define desired learning outcomes
• Develop the project and its activities that
  relate to the learning outcomes
• Develop the assessments of learning and
  the methods of testing them
• Validate the assessment tools through a
  pilot test
• Measure the learning outcomes and
  analyze for statistical significance.
        Implementation Issues
• Time constraints in classroom
   – Solution: Include detailed instructions for both
     accounting software and MS Access in the
     practice set and allow students to work
     independently outside of class.
• Software availability for accounting program
   – Solution: Make it available in the accounting lab
     and also as a trial version with the systems
• Most of the principles of all the accounting
  courses will be applied.
• Core competencies will be enhanced.
• Transformative learning will occur.
• Students will have enhanced skills for the
  job market.
• Quantifiable measures of learning for
  accrediting bodies will be developed.
    Your Feedback is Appreciated.
•   Dr. Edward R Walker, CPA
    Assistant Professor, Department of Accounting
    (405) 974-5312

•    Dr. Mary F. Sheets, CPA
     Professor, Department of Accounting
    (405) 974-2834

•   Dr. Mary D. Teal
    Assistant Professor, Department of Accounting
    (405) 974-2806

                      University of Central Oklahoma
                          100 N. University Drive
                            Edmond, OK 73034