AFM341 Lecture Notes - Lecture 4: Workflow, Explicit Knowledge, Decision Points
28 Jun 2018
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Now accountants face the challenge of helping the enterprise to optimize its processes to achieve the competitive
performance levels and maximize shareholder value
•
Rapid changes in technology such as business intelligence (BI) and ERP systems have increased the availability of
data throughout the organization
•
The information produced by the technology must support the information requirements of the business's
decision makers
•
Table 2.1 summarizes the traditional stewardship and reporting and accounting management roles, as well as the
increasingly important business management support roles
•
•
How the business collects data and summarizes and communicates business information○
How the business delivers value to its customers, interacts with other business, and meets requirements for
good corporate citizenship
○
What risks the business faces and the internal controls in place to mitigate those risks○
How accounting information systems collect, summarizes, and report business process information○
Accountants must understand•
To ensure that processes and systems are documented, and to improve the business processes and systems•
CHANGING ROLES OF ACCOUNTANTS IN BUSINESS
BUSINESS PROCESS DOCUMENTATION
Business process: a defined sequence of business activities that use resources to transform specific inputs into
specific outputs to achieve a business goal. A business process is constrained by business rules
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Business analysis: the process of defining business process requirements and evaluating potential improvements.
Business analysis involves ascertaining, documenting, and communicating information about current and future
business processes using business process modeling and related tools
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Business model: a simple, abstract representation of one or more business processes. A business model is
typically a graphical depiction of the essential business process information
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Documentation: explains how business processes and business systems work. Documentation is "a tool for
information transmission and communication. The type and extent of documentation will depend on the nature of
the organization's products and processes"
•
DEFINITIONS
Requires managers to assess and attest to the business's internal control structure and procedures ○
Management is responsible for maintaining evidential matter, including documentation, to provide
reasonable support for its assessment of effective internal control to investors
○
The act also requires external auditors to audit management's assessment of the effectiveness of internal
controls and express an opinion on the company's internal control over financial reporting
○
The SOX act of 2002 made documentation essential for businesses •
Training: user guides, employee manuals, operating instructions to learn how business processes and
systems operate
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Establishes accountability, standardizes communications within the business and between its
stakeholders
Describing current processes and systems: documentation provides an official description of how business
processes and systems, including AIS, work
○
Auditing: documentation provides audit trails○
Accountability: specify who is authorized to do what○
Standardized interactions: documentation clearly describes the inputs and outputs of business processes
and systems and thus provides a common language for all parties that interact with the process or system
○
Effectiveness: are the outputs of the process obtained as expected?
Efficiency: can the same outputs be produced with less?
Internal control: is it working?
Compliance to statutes and policies: does the process comply with laws and regulations
Facilitating process improvement: documentation is the basis for determining what should be changed
within the process
○
Document also important for the following reasons:•
PURPOSES OF DOCUMENTATION
Chapter 2
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Accountants as Business Analysts
January 4, 2018 3:09 PM
AFM 341 Page 1
Document Summary
Now accountants face the challenge of helping the enterprise to optimize its processes to achieve the competitive performance levels and maximize shareholder value. Rapid changes in technology such as business intelligence (bi) and erp systems have increased the availability of data throughout the organization. The information produced by the technology must support the information requirements of the business"s decision makers. Table 2. 1 summarizes the traditional stewardship and reporting and accounting management roles, as well as the increasingly important business management support roles. How the business collects data and summarizes and communicates business information. How the business delivers value to its customers, interacts with other business, and meets requirements for good corporate citizenship. What risks the business faces and the internal controls in place to mitigate those risks. How accounting information systems collect, summarizes, and report business process information. To ensure that processes and systems are documented, and to improve the business processes and systems.
