Auditing in CIS Environment

Module I: AIS, ERP and IT Audit

MODULE I
ACCOUNTING INFORMATION
SYSTEM (AIS) AND
ENTERPRISE RESOURCE
PLANNING SYSTEM (ERP)

Module Author
JUDE CAPONPON, CPA, MBA, CTT

Accountancy Department
College of Business Administration and Accountancy
De La Salle College of St. Benilde - Antipolo

Page 1
Auditing in CIS Environment
Module I: AIS, ERP and IT Audit

TABLE OF CONTENTS

Contents
LEARNING OBJECTIVES:................................................................................................................................. 3
TODAY’S GOSPEL ........................................................................................................................................... 3
Task ............................................................................................................ Error! Bookmark not defined.
LESSON 1 OVERVIEW OF ACCOUNTING INFORMATION SYSTEM AND ENTERPRISE
RESOURCE PLANNING (ERP) ................................................................................................................. 5
Objectives ................................................................................................................................................. 5
Introduction .............................................................................................................................................. 5
Activating Prior Knowledge....................................................................................................................... 5
Analysis ...................................................................................................... Error! Bookmark not defined.
Acquiring New Knowledge ........................................................................................................................ 6
Introduction to Information System ..................................................................................................... 6
Accounting Information System ........................................................................................................... 6
Enterprise Resource Planning ............................................................................................................... 7
Formative Assessment ................................................................................... Error! Bookmark not defined.
References: ................................................................................................................................................. 11

Page 2
Auditing in CIS Environment
Module I: AIS, ERP and IT Audit

LEARNING OBJECTIVES:
While going through the module, the students are expected to:
1. Write a brief reflection about the Gospel;
2. Answer the motivation question;
3. Explain the basic principles and concepts in IT and IT Audit in building awareness of
the significant role of auditing in actual business operations;
4. Gain knowledge on the irregular acts and legal issues in Audit in a CIS Environment
5. Describe the audit process in a CIS Environment

Page 3
Auditing in CIS Environment
Module I: AIS, ERP and IT Audit

Page 4
Auditing in CIS Environment
Module I: AIS, ERP and IT Audit

LESSON 1 OVERVIEW OF ACCOUNTING INFORMATION SYSTEM AND

ENTERPRISE RESOURCE PLANNING (ERP)

Objectives
1. Demonstrate the connection between Information Technology and Accounting
2. Demonstrate the concepts of Accounting and Systems used in processing accounting
information

Introduction
An Accounting Information System (AIS) is a structure that a business uses to collect, store,
manage, process, retrieve, and report its financial data so it can be used by accountants,
consultants, business analysts, managers, chief financial officers (CFOs), auditors, regulators,
and tax agencies.

Specially trained accountants work in-depth with AIS to ensure the highest level of accuracy in a
company's financial transactions and record-keeping, as well as make financial data easily
available to those who legitimately need access to it—all while keeping data intact and secure.

Activating Prior Knowledge

Information Technology plays an integral role in every industry, helping companies improve
business processes, achieve cost efficiencies, drive revenue growth and maintain a competitive
advantage in the marketplace. With the introduction of computers, the business world was
changed forever. Using computers and software, businesses use information technology to
ensure their departments run smoothly. They use information technology in a number of different
departments including human resources, finance, manufacturing, and security.

For further recall on the basic topic of the Accounting Information System, watch the video link
attached for your viewing and understanding.

https://www.youtube.com/watch?v=z26LieCUVOo

Page 5
Auditing in CIS Environment
Module I: AIS, ERP and IT Audit

Acquiring New Knowledge

Introduction to Information System
An Information System is a collection of hardware, software, data, people, and procedures
designed to support data-intensive applications and generate information that supports the day-
to-day, short-range, and long-range activities of users in an organization.

Types of Information Systems

Accounting Information System

The Accounting Information System consists of the records and methods used to initiate,
identify, analyze, classify, and record the organization’s transactions and to account for the
related assets and liabilities. The quality of information is that the accounting information system
generates impacts management’s ability to take actions and make decisions in connection with
the organization’s operations and to prepare reliable financial statements. An effective
accounting information system will:

- Identify and record all valid financial transactions

- Provide timely information about transactions in sufficient detail to permit proper
classification and financial reporting
- Accurately measure the financial value of transactions so their effects can be recorded in
financial statements
- Accurately record transactions in the time period in which they occurred

Page 6
Auditing in CIS Environment
Module I: AIS, ERP and IT Audit

Enterprise Resource Planning

Enterprise Resource Planning (ERP) is business management software that allows an
organization to use a system of integrated applications to manage the business. It aims to serve as
a backbone for your whole business. ERP software integrates all facets of an operation, including
product planning, development, manufacturing processes, sales and marketing.

Advantages of Implementing an ERP Software

1. Drive standardization across the enterprise resulting in greater operational efficiencies
2. Enables greater focus on strategic activities
3. Potential for rapid deployment of technology
4. Shared IT development costs
5. Simplify IT technical footprint

Challenges in Implementing an ERP Software

1. Organizational change impact
2. Perception of setbacks
3. Discipline to maximize ERP software investment
4. Different implementation approach (solution driven vs requirements driven)

Business Benefits in Implementing an ERP Software

1. Time Saved
2. 24/7/365 Availability
3. Simplified IT Infrastructure
4. Reduced Fax Costs
5. FULL ERP Integration
6. Up and Running in Few Days

Page 7
Auditing in CIS Environment
Module I: AIS, ERP and IT Audit

SAP Business One

- SAP Business One is a business management solution designed for small and midsize
businesses
- SAP Business One gives you instant access to real-time information through one single
system. The application is divided into a number of modules, each covering a different
business function.
- SAP Business One has a user-friendly interface that serves as your central ERP access
point, with standard interfaces to internal and external data sources, handheld computers,
and other analysis tools.

Page 8
Auditing in CIS Environment
Module I: AIS, ERP and IT Audit

SAP Business One: A True ERP System

- SAP Business One represents a new breed of business software that is specifically
designed to meet today’s small and mid-size business needs and challenges. It completely
removes the needs and problems associated with having disconnected business processes
or systems.
- It integrates and streamlines all business functions across sales, marketing, customers,
financials and operations, all in a single system so your business operates like a seamless
one.
- It stores all critical business information in one database so you can instantly access
without having to get information from different systems that often don’t agree with each
other
- It provides built-in customer relationship management (CRM) tools that are fully
integrated to the back office operations to help you better manage sales and customer
services
- It’s also a flexible system that can be easily customized and tailor to your own business
and industry needs.

Page 9
Auditing in CIS Environment
Module I: AIS, ERP and IT Audit

- SAP designed and built the product from the ground up, specifically for the small and
mid-size businesses so the users can leverage the best experiences without dealing with
complexities.

SAP Business One: Technology

- SAP Business One is based on a two-tier client/server architecture. The server runs a
database server as a central repository (Microsoft SQL Server). Most of the application
resides on the client (“fat client”). This means that processing is carried out locally and is
largely independent of server performance.
- SAP offers a Software Development Kit (SDK) for SAP Business One. You can use this
KIT to add your own functions programmed in Visual Basic (VB), C/C++, and Java. The
SDK runs either on the server on the client depending on its purpose. An integration
platform (Bli) provides an interface to integrate SAP Business One to a larger company’s
system landscape.
- SAP Business One is shipped with a Service Manager and services for sending e-mails,
faxes, and SMS from SAP Business One (mail service) and creating regular database
backups (backup service). The Remote Support Platform (RSP) is an automated tool that
allows end-to-end support by proactively monitoring the health status and integrity of the
databases and sending results to SAP support.
Page 10
Auditing in CIS Environment
Module I: AIS, ERP and IT Audit

- SAP Business One provides general functions that cover all business areas, as well as
certain innovative enhancements, such as Customer Relationship Management (CRM),
contact management, and user-defined values.
- Country versions are constantly being developed to fulfill country-specific requirements.
- The user interface has already been translated into most major languages, and users can
switch between the languages they need.

References:

Hall, J. (2016). Information Technology Auditing and Assurance, 4th Edition. South-Western:
Cengage Learning
IT Audit and AIS Quick Guides 2019 version by FIT Academy
https://learn.comptia.org/
https://help.sap.com/saphelp_sbo882/helpdata/en/45/0a572b37ca1f2ce10000000a1553f6/content
.htm?no_cache=true
https://help.sap.com/saphelp_sbo882/helpdata/en/45/0a574437ca1f2ce10000000a1553f6/content
.htm?no_cache=true
https://searchsap.techtarget.com/definition/SAP-Business-One
https://www.erp-information.com/database-management-system.html

Page 11
Auditing in CIS Environment
Module I: AIS, ERP and IT Audit

Page 12