Thursday, March 29, 2007
Web 2.0 and Google
Tonight in class I learned about Web 2.0. It was a really interesting topic. I like how the web is transferring from user interface to user interaction. For example, Google, has some awesome features for a user to create a home page. I just spent more than 30 mintures trying to decide what should be added. I had made Google my home page and plan to use gmail as my primary email account. I love Google.
Wednesday, March 21, 2007
Accounting Expert System
Since my major was accounting in undergrad and I am obtaining my masters in accounting, I decided to blog about accounting expert systems. Expert systems are currently used in accounting for audit planning, internal-control analysis, account attribute analysis, quality, review, accounting decisions, tax planning, management consulting, and training.
Four examples of fully developed expert systems include Expert Auditor, Answers, TaxCut, and Internal Operations Risk Analysis. Expert Auditor is one of the most widely used expert systems. This system leads the accountant various steps of an audit investigations. Another example of an expert system is Answer. This is an expert system that aids in the audit planning process. Answers is helps in implementing SAS 56, Analytical Procedures, and SAS 59, The Auditors Consideration of an Entity’s Ability to Continue as a Going Concern. Another example of an expert system is TaxCut, which contains expert knowledge of Harvard and Yale educated tax lawyers. This system leads users to correct solutions for tax problems with a series of “yes” or “no” queries. Internal Operations Risk Analysis helps the auditor to understand a client’s operating and control environment5.
Some other current accounting expert systems include Loanprobe by KPMG’s Peat Marwick that can be used in bank audits to test loan loss reserves, ASQ by Ernst & Young which automates the audit process for manufacturing firms, and FSA by Arthur Andersen that helps in quality review and ratio development for inquiries.
A more detail example of an expert system existed with Security Pacific Bank. As more and more people are using ATM cards, Security Pacific Bank was faced with increasing fraudulent use of debit cards at ATM and point-of-sale locations. The recovery of stolen funds is almost usually impossible. Security Pacific Bank improved its existing automatic controls by using the expertise of its fraud investigators to develop an expert system to help prevent and deter fraudulent use of debit cards. The system reaches one of three conclusions regarding fraud:
* The possibility of fraud is likely and action is taken.
* The possibility of fraud exists and further investigation is necessary.
* The possibility of fraud is slim and no action is necessary.
If the possibility of fraud is likely, the system blocks electronic activity in an account. If the system blocks electronic activity, it provides the reasons why the blocking decision was reached. If the possibility of fraud exists but is not likely, the system produces a warning report and refers the account to a human investigator. In this case, the system has determined that fraud may exist, but the likelihood is not high enough to warrant blocking the account without further investigation. For a majority of the transactions, the system can also determine that fraud is not likely and the transactions are processed without intervention. The expert system is linked to two mainframe computers that include the bank's data bases. The bank estimates the savings generated by the system in the first two months of use equaled the development costs.
Four examples of fully developed expert systems include Expert Auditor, Answers, TaxCut, and Internal Operations Risk Analysis. Expert Auditor is one of the most widely used expert systems. This system leads the accountant various steps of an audit investigations. Another example of an expert system is Answer. This is an expert system that aids in the audit planning process. Answers is helps in implementing SAS 56, Analytical Procedures, and SAS 59, The Auditors Consideration of an Entity’s Ability to Continue as a Going Concern. Another example of an expert system is TaxCut, which contains expert knowledge of Harvard and Yale educated tax lawyers. This system leads users to correct solutions for tax problems with a series of “yes” or “no” queries. Internal Operations Risk Analysis helps the auditor to understand a client’s operating and control environment5.
Some other current accounting expert systems include Loanprobe by KPMG’s Peat Marwick that can be used in bank audits to test loan loss reserves, ASQ by Ernst & Young which automates the audit process for manufacturing firms, and FSA by Arthur Andersen that helps in quality review and ratio development for inquiries.
A more detail example of an expert system existed with Security Pacific Bank. As more and more people are using ATM cards, Security Pacific Bank was faced with increasing fraudulent use of debit cards at ATM and point-of-sale locations. The recovery of stolen funds is almost usually impossible. Security Pacific Bank improved its existing automatic controls by using the expertise of its fraud investigators to develop an expert system to help prevent and deter fraudulent use of debit cards. The system reaches one of three conclusions regarding fraud:
* The possibility of fraud is likely and action is taken.
* The possibility of fraud exists and further investigation is necessary.
* The possibility of fraud is slim and no action is necessary.
If the possibility of fraud is likely, the system blocks electronic activity in an account. If the system blocks electronic activity, it provides the reasons why the blocking decision was reached. If the possibility of fraud exists but is not likely, the system produces a warning report and refers the account to a human investigator. In this case, the system has determined that fraud may exist, but the likelihood is not high enough to warrant blocking the account without further investigation. For a majority of the transactions, the system can also determine that fraud is not likely and the transactions are processed without intervention. The expert system is linked to two mainframe computers that include the bank's data bases. The bank estimates the savings generated by the system in the first two months of use equaled the development costs.
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