![Page 1: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/1.jpg)
Evaluating Accounting Information Systems that support Multiple GAAP Reporting using Normalized Systems Theory
4th EEWC conference, May 5-9, 2014, Funchal
Els Vanhoof Phd Researcher, Department of Accountancy and Finance, Faculty of
Applied Economics, University of Antwerp, Antwerp, Belgium
![Page 2: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/2.jpg)
1
Overview
• Motivation
• Research question
• Methodology
• Theoretical Framework
• Combinatorial effects
• Conclusions – impressions – further research
![Page 3: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/3.jpg)
2
Motivation
• Applying NS in a domain field
=> Accounting
• Data
• Processes
• NOT software
![Page 4: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/4.jpg)
3
Financial Information Needs
![Page 5: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/5.jpg)
4
The REA Model
![Page 6: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/6.jpg)
5
![Page 7: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/7.jpg)
6
Research question
• Problem = multiple GAAP => evolvable AIS
• Which combinatorial effects are present in existing multiple GAAP AIS?
![Page 8: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/8.jpg)
7
Methodology
• Design science - iteration of design cycle:
- Problem statement
- Design
- Evaluation
• Mixed methods:
- Case studies in design phase
![Page 9: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/9.jpg)
8
Methodology
Mixed method: Design science - case studies
![Page 10: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/10.jpg)
9
Problem statement: Differences in GAAP
• Concepts
• Recognition criteria
• Measurement methods
• Presentation
• Disclosure
• Alternatives
• Lack of requirements
![Page 11: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/11.jpg)
10
Design: software designs in cases
• Accounts design
1. Parallel accounts
a) Duplicated accounts
b) Area's
2. Parallel ledgers
3. Separate company code
• Posting design
1. Difference posting
2. Complete posting
3. Special set-up (financial instruments)
![Page 12: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/12.jpg)
11
![Page 13: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/13.jpg)
Combinatorial effect? The impact of a change is not only dependent on the change itself, but also on the size of the system on which it is imposed.
Evaluation: NST -> combinatorial effects
![Page 14: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/14.jpg)
13
Evaluation: impact of changes
1. Creating additional account
2. New revenue recognition criterion (effect on postings)
3. New revenue recognition criterion (effect on modules)
4. New measurement criteria for all GAAP
![Page 15: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/15.jpg)
14
Change 1: Creating additional account
Parallel accounts: duplicated accounts
![Page 16: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/16.jpg)
15
Change 1: Creating additional account
Parallel accounts: areas -> account in common area
![Page 17: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/17.jpg)
16
Change 1: Creating additional account
Parallel accounts: areas -> account in GAAP specific area
![Page 18: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/18.jpg)
17
Change 1: Creating additional account
• Parallel ledgers
![Page 19: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/19.jpg)
18
Change 1: Creating additional account
• Parallel ledgers
![Page 20: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/20.jpg)
19
Change 1: Creating additional account
Separate company code = CC
![Page 21: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/21.jpg)
20
Change 1: Creating additional account
Separate company code
![Page 22: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/22.jpg)
21
Change 2: Revenue recognition criteria (effect postings)
Parallel accounts areas:
A) past revenue recognition criteria the same for all GAAP
Impact the same as
change 1
![Page 23: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/23.jpg)
22
Change 2: Revenue recognition criteria (effect postings)
B) primary and other GAAP already had different criteria
=> No CE
![Page 24: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/24.jpg)
23
Change 2: Revenue recognition criteria (effect postings)
Parallel accounts…
Difference posting
![Page 25: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/25.jpg)
24
Change 2: Revenue recognition criteria (effect postings)
Parallel accounts…
Difference posting
![Page 26: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/26.jpg)
25
Change 2: Change revenue recognition criteria
Parallel accounts…
Complete posting
![Page 27: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/27.jpg)
26
Change 3: Revenue recognition criteria (effect on modules)
Recognition: realization
![Page 28: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/28.jpg)
27
Change 4: Measurement criteria for all GAAP)
New fair value rules
![Page 29: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/29.jpg)
28
Conclusions
• Use of design science + case studies
• Identified combinatorial effects
• First evolvability study in AIS
• Usefulness of NST in domain specific area
![Page 30: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/30.jpg)
29
Impressions…
• Finding CE possible?
YES
- Omnipresent!
- Difficult to isolate!
- Where to start?
- Fundamental problems with accounting structures?
![Page 31: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/31.jpg)
30
Further Research
• Formulate Guidelines
• Build prototype
![Page 32: Normalized Accounting Information Systems€¦ · Overview •Motivation •Research question •Methodology •Theoretical Framework •Combinatorial effects •Conclusions – impressions](https://reader034.vdocument.in/reader034/viewer/2022043017/5f39dcb4a016492df5724452/html5/thumbnails/32.jpg)
Thank you for your attention! ~ Questions?