Rethinking AIS: An Innovative Financial Information Systems Curriculum

This paper describes a new Financial Information Systems curriculum that integrates information technology and financial information in the development of business information systems, and discusses the problems we experienced in establishing the new program. Our intention is to provide accounting graduates with the knowledge they need to leverage the latest information technologies to support the use of financial information in management decision-making, and to integrate financial information and internal controls into business information systems. Our cross-disciplinary approach expands the horizons of our students, from one of viewing accounting as a stand-alone, untimely, inflexible information system, capturing only “accounting transactions” and their limited characteristics, to one of a more realistic real-time, enterprise-wide, activity-driven information system, used by a variety of users with a variety of needs. We also shift the focus from implementing costly controls to that of embedding controls within information systems during systems development, and of continuous systems monitoring. A Financial Information Systems Curriculum 2 Rethinking AIS: An Innovative Financial Information Systems Curriculum “In this new marketplace, traditional accountants are a dying breed.... Yet, many accounting educators have failed to restructure accounting curriculum to equip graduates with the tools and expertise they need in today’s business world.” (Gabbin, 2002, 82) Given the dramatic information technology (IT) changes in the profession, with IT permeating just about every facet of it, there is a strong and growing demand for IT-savvy graduates. Recently, the American Institute of Certified Public Accountants (AICPA) produced a video called "AICPA TopTech 2001 – Critical Elements of Business." Some quotes from this presentation are: • "The traditional accounting firm has changed and is now competing with non-accounting firms – and if they don't make use of information technology, they die." • "The entire accounting profession is in a situation where they have got to become more IT-literate to compete." • "Everything is in electronic form today your information, my information, your company's information, your client's information – and if we don't learn how to protect that, we are all in trouble." A Financial Information Systems Curriculum 3 The foregoing observations demonstrate a need for additional IT teaching in accounting degrees. The curriculum must produce graduates whose understanding goes beyond that of merely using an accounting package to manage data. Rather, graduates must understand the system around which the information is built. Recently, Albrecht and Sack (2000, 43) found that accounting educators are not adequately exposing students to the impact of technology on business. Nor are we teaching them ways in which technology can be leveraged to make business decisions. The new curriculum presented here addresses many of the concerns highlighted by the Albrecht and Sack study. In addition, the objective of this curriculum is to produce graduates who fulfill the market demand suggested by the AICPA (2001) and reiterated by businesses who recruit at our university. This curriculum also recognizes and incorporates feedback received from working professionals, including CPAs, in accordance with Gabbin’s (2002, 81-86) recommendations. This article presents a new framework, six years in the making (1996 to 2002), for an information systems curriculum within the accounting discipline. We created this new major, called “Financial Information Systems” (FIS), in addition to the traditional major. The FIS program is unique in its emphasis on computerized information systems and the fact that it is delivered entirely by retrained accounting faculty. A Financial Information Systems Curriculum 4 Our new program moves away from the title of “Accounting Information Systems,” or AIS, currently used to describe an assortment of approaches used in attempts to enhance the IT-literacy of accounting students. The new title implies a broader, enterprise-wide systems orientation, in contrast to viewing the accounting system as one of many enterprise “stovepipe” systems. In addition, we want to avoid some of the preconceptions and unnecessary baggage associated by some with AIS. We take a cross-disciplinary approach to teaching information systems, although we do emphasize systems for performance reporting whose measures are typically expressed in monetary units. We place special emphasis on control systems that are proactive, embedded and in real-time. The accounting profession also seems to be adopting the “financial information systems” terminology, as described in the most recent CPA Letter in the context of providing “financial information systems design and implementation services” (AICPA, 2002, 1,3). Our purpose is to lay out the architecture and the problems we experienced in establishing the new program. The broad focus of the paper makes a contribution because it provides accounting educators with a relatively detailed description of an innovative curriculum. However, in-depth descriptions of course materials, class projects, and intricate details of particular technologies are beyond the scope of the current paper. Upon request, we will make available course syllabi of A Financial Information Systems Curriculum 5 required FIS courses, sample projects, other course materials, and references to related publications that provide the underlying detail. The next section highlights the limitations of traditional accounting and information systems programs. The third section explains our new curriculum, designed to address these limitations. The fourth section describes the environment that is necessary to develop, provide and maintain the program. The fifth section deals with obstacles we encountered and explains how we overcame them. The last section concludes the paper. LIMITATIONS OF EXISTING PROGRAMS Over the past 20 years, accounting programs have failed to provide graduates with the skills needed to be an integral part of an enterprise-wide information system. The lack of sufficient information technology content in traditional accounting courses is well known (see, for example, Albrecht and Sack, 2000). Technology, to the extent that it was integrated into the traditional curriculum, was typically via a single, perhaps elective, AIS course. Our challenge was to develop an AIS curriculum that adds value over both traditional accounting and MIS programs. In AIS courses, there has historically been a lack of consensus. A number of researchers (e.g., Borthick, 1996, 75-86; Groomer and Murthy, 1996, 103-127; Walton, 1997, 69-88) have addressed the issue of how to teach information systems in an accounting context, but no generally accepted framework has evolved. The authors describe existing curricula, document that institutions teach A Financial Information Systems Curriculum 6 AIS very differently, and express the need for curricular reform, while Stewart (1993/4, 3-12) and Callaghan, Peacock and Savage (2001, 51-60) solicit educator and/or practitioner recommendations for appropriate information technology content in accounting courses. Recent literature (e.g., Coe, 2001, 13-24; Fisher 2001, 25-29; Lunsford, 2001, 43-50) continues to espouse a diversity of ideas about what should be included in AIS, demonstrating a continuing lack of consensus. At our institution, we have a strong and growing MIS program. The increase in MIS enrollment roughly equals the decline in accounting enrollment. However, our MIS program tends to emphasize the managerial aspects over technical proficiency. For instance, a student can complete the program without exposure to hands-on design methods. Our FIS program has as an integral part these very design and construction components, leading to executable accounting-related applications. Consequently, the FIS curriculum adds value in that it provides rigorous and structured content in transaction-based, accounting-related information systems. The following section describes the evolution of our curriculum development from a single AIS course to a complete FIS curriculum. NEW FRAMEWORK In collaboration with MIS faculty, accounting faculty began to incorporate information systems development into the required AIS course. A successful A Financial Information Systems Curriculum 7 grant application to the National Center for Automated Information Research and the devotion of a sabbatical leave by an accounting faculty member greatly facilitated this innovation. Our initial objectives were to expand students’ knowledge of relational databases and to introduce REA modeling (McCarthy, 1979, 667-686; 1982, 554-578; 1999). However, problems surfaced because a single course was insufficient to allow for the desired level of understanding of information systems. The problems were exacerbated because students did not bring sufficient database knowledge into the AIS course to perform at an acceptable level. As a solution, we decided to add two more AIS courses that would permit the completion of the information systems development lifecycle, which included systems planning, analysis, design and construction. We designed these two courses as accounting electives for an undergraduate or graduate degree track in AIS. To facilitate the expansion of the AIS curriculum from a single course to a sequence of courses, the university approved a new tenure track faculty line. Since we could not find a candidate with the necessary information systems skills, we employed a traditional faculty member who was enthusiastic about being trained in the methods of the new framework. Our dean committed substantial resources to faculty development, and the new hire’s professional development included extensive faculty mentoring and external training in systems development methods and associated software, over a two-year period. With these A Financial Information Systems Curriculum 8 resources in place, the final stage of our curricular development resulted in the recent approval of our proposal for the FIS major. The goal of the new curriculum is to produce information and systems specialists who can integrate financial information and information technology in a business environment. Our intention is to provide graduates with the knowledge they need to: • Leverage the latest information technologies to support the use of financial information in management, reporting, and decision-making. • Integrate financial information and internal controls into business information systems, and to monitor these systems. • Develop cross-functional, enterprise-wide business systems (in planning and analysis), and create transaction-based accounting subsystems (in design and construction). An example of the latter is a fixed asset subsystem, which requires a high degree of accounting technical competence, including depreciation methods, overhead analysis, deferred income taxes, capitalization versus expensing, and an understanding of the arbitrary nature of cost allocation. Department of Accounting faculty members who have developed financial information systems teaching skills and research interests deliver the new curriculum. In contrast, other institutions have developed information systems curricula with a mix of accounting courses taught by accounting faculty and MIS A Financial Information Systems Curriculum 9 and/or Computer Science courses taught by MIS/Computer Science faculty. Bowling Green State University and Illinois State University are examples of schools using this approach, among others. We believe that our internally developed approach permits better integration of traditional accounting content within business information systems. The focus of the curriculum is to link accounting theory and practice through the application of information technology. We use a novel approach developed by our faculty to teach FIS concepts by integrating topical areas using a "ModelOriented Tool-Enhanced" framework (Callaghan, Lauer and Peacock, 1998, 5765). The model-oriented aspect uses systems development methods that permit high-level abstractions of real-world information systems. Included are business process (activity), data, and interaction models. The tool-enhanced aspect uses advanced systems development software to convert these models into code executable in many different technical environments. This approach makes it possible to provide an even balance of the conceptual and the practical by leveraging the student’s abstraction skills, while concurrently allowing for the construction and implementation of actual information systems (Callaghan, Lauer and Peacock, 1998, 61). This combined use of models and software permits the leveraging of modeling skills independently from targeted technical environments. Thus, we teach students practical system methods without selecting (and biasing them toward) A Financial Information Systems Curriculum 10 any particular vendor's operating system, database, or programming language. This curricular approach is in dramatic contrast to traditional methods that either ignored technical environments (and were too abstract) or taught only specific technology skills (and were too ephemeral and trade-school-like). In our business school, the first 60 credits (general education and business pre-core) and the business core are the same for all degrees. The business pre-core includes the traditional accounting principles classes in financial and managerial accounting, and one MIS or Computer Science course. The business core has a second MIS course. In addition to the general education, core and pre-core requirements, the FIS major has four required courses covering an Introduction to Financial Information Systems and Databases (FIS 301), Financial Information Systems Analysis (FIS 401), Financial Information Systems Design (FIS 402), and Information Systems Audit and Control (FIS 403). Students then choose an additional six credits (two courses) from Financial Information Systems Applications (FIS 404), any accounting course at the 300 or 400 level, any MIS course at the 400 level, any Finance course at the 400 level, and Manufacturing Planning & Control at the 400 level. We added the last elective for those students who intend to work and develop systems in manufacturing environments. Finally, there is room for two free electives (from any discipline), to complete a 128-credit degree. A discussion of each of the FIS courses follows: A Financial Information Systems Curriculum 11 • Introduction to Financial Information Systems and Databases (required), focuses on information systems project management, data modeling, database design, querying a database, and using commercial financial databases. The software used in this course could include MS Project, the Oracle 9i database management system, Edgar, and Compustat. The purpose of this class is to build on the knowledge imparted to students in the core MIS class, and to develop project management and database skills. Insert Table 1 here • Analysis of Financial Information Systems (required), allows students to analyze modern, technologically relevant business information systems. We use the Systems Development Life Cycle (SDLC) as the logical framework, and systems development software such as Oracle Designer, Advantage Gen, or Rational Rose to analyze real-world business systems. The students build on database concepts introduced in the first course by developing data, process and interaction models. The existing case materials and assigned projects include a fixed asset subsystem, and a raw materials purchasing subsystem. Insert Table 2 here • Design of Financial Information Systems (required) completes the SDLC and continues a project started in the preceding course (Analysis of A Financial Information Systems Curriculum 12 Financial Information Systems). It involves the design and construction of a business information system. Students implement their designs by using Advantage Gen, Oracle Designer/Developer, or Rational Rose. Most of this course is project-based. The purpose of the project is to allow students to actively participate in the full systems development life cycle. Insert Table 3 here • Information Systems Audit and Control (required) deals with audit and control aspects of information systems. Students study the risks, controls, and audit techniques related to key information systems areas. In addition, they learn computer fraud detection techniques. Students use ACL Software (with IDEA as an alternative) to perform audit tests and fraud prevention and detection procedures. Insert Table 4 here • The content of the Financial Information Systems Applications course (elective) varies to keep pace with changing business needs and information technologies. Topics include XML-XBRL, electronic commerce, executive decision support systems, and emerging technologies. This course is project-based, and permits the student to apply knowledge acquired in prerequisite courses to relevant innovations. Insert Table 5 here A Financial Information Systems Curriculum 13 The curriculum permits innovation by its design. We designed it to be flexible and attractive to students who would otherwise choose major in either MIS or traditional accounting. It is flexible because it can support a traditional undergraduate accounting major, or it can fit within the 150 credit hour requirement for aspiring CPA’s. Despite much criticism of the 150-hour requirements (e.g., Albrecht and Sack, 2000, 30, 33-34; Clikeman, Schwartz and Lathan, 2001, 627-645), these are now a fact of accounting education life in many states. It is important that any degree with some accounting content be considered in the context of the 150-credit hour rule because compliance with this requirement is necessary for a section of the profession. Table 6 illustrates how a student can accomplish this at a school in Michigan. Insert Table 6 here This program should be attractive to traditional accounting majors who, with the judicious use of accounting electives, can dual major with only two additional courses. Therefore, we do not expect any cannibalization of our traditional major. Instead, we hope to attract students who would otherwise choose MIS or accounting/information systems programs at other institutions. We believe that potential MIS majors will be attracted to this new major because of the enhanced career opportunities made possible by combining MIS-type technologies with the rigor associated with developing accounting-related subsystems. Our main motivation is not enrollment, but effective accounting education. However, A Financial Information Systems Curriculum 14 increased enrollment should come naturally if we are successful at enhancing the IT skills of our graduates. Appendix A shows an example of how a student might complete the degree over a four-year period. ENVIRONMENT NEEDED TO PROVIDE THE CURRICULUM Resources required to develop, provide and maintain this degree program include hardware, software, faculty with appropriate skills, and support to maintain access to information technology. Our business school subscribes to corporate university programs. In exchange for a small fee, the university receives basic software and access to training for faculty. We also hired a database administrator to administer the underlying technical infrastructure. His duties include installing and managing the Oracle database, integrating software, including the systems development toolset using the Oracle back-end, and managing other ad hoc software used in the curriculum. This human resource commitment is essential to the delivery of this program. The technical issues involved in installation and maintenance of applications such as Oracle require full-time attention and skills beyond those usually held by computer laboratory staff. COOL:Gen (now named Advantage Gen, and owned by Computer Associates) was the first systems development toolset the business school used for the systems analysis and design classes. We chose this toolset because of (1) its excellent downstream effects in systems development that resulted in the A Financial Information Systems Curriculum 15 generation of application code and the data definition language; (2) the fact that it follows the various stages of the systems development lifecycle lockstep, which provides for a strong theoretical foundation for students; and (3) the excellent free training provided to faculty. However, in light of the popularity of Oracle products in the business world, plus the opportunity to have Oracle Designer as an alternative systems development tool, we decided to subscribe to Oracle’s university program as well. There was much discussion about the pros and cons of each systems development software package. The versatility of the Oracle package, plus the familiarity of the general public with Oracle, helped move the decision somewhat towards the use of Oracle. Currently, our business school supports both packages. In addition, both faculty members involved in this curriculum are currently becoming proficient in the use of Unified Modeling Language (UML)-based toolsets for systems development, and we intend applying these to class projects in the near future. We wish to emphasize that one of the advantages of our approach is that we are vendor-independent, because we do not wish to be wedded to any particular technical environment. The technologies we consider for adoption are intentionally selected for their ability to work with many operating systems, databases and programming languages, thereby better preparing our graduates for the ever-changing IT business world. A Financial Information Systems Curriculum 16 PROBLEMS AND SOLUTIONS We experienced many frustrating and time-consuming difficulties with developing and launching the new major. We solved these problems over a sixyear period. The biggest hurdle was the bureaucratic inertia at the department, business school and university levels in approving the curriculum. Part of the departmental inertia stemmed from Accounting faculty concerns about the potential erosion in the already decreasing number of traditional accounting majors. We eventually persuaded our colleagues that the source of students to the new major would likely come from potential MIS majors, whose department had experienced enrollment increases almost matching the decline in traditional accounting majors. In addition, students can, with judicious selection of electives, dual major in financial information systems and accounting with only two additional courses. Moreover, feedback from our stakeholders, particularly our Accounting and Finance Advisory Board that represents major employers of our graduates, consistently voiced support for this curricular innovation. Without this support, it would have been extremely difficult to convince some very skeptical colleagues. Another major challenge related to securing faculty members who were both qualified and committed to develop and deliver the new curricular content. We originally had no faculty members with an in-depth knowledge of information systems. Faculty members needed to develop expertise in systems development A Financial Information Systems Curriculum 17 methodologies, and also needed training in the software that supports those methodologies. Initially, one tenured traditional faculty member retooled in the area of information systems. With external grant support and sabbatical leave, he agreed to spearhead the development of a framework and acquire the technical skills through self-study and professional development. For instance, he trained in computer-aided systems engineering methods, data and process modeling, relational database technology, and software engineering concepts. In addition, the new tenure-track faculty member expressed a willingness to retrain in these areas. The incremental cost in terms of new faculty salary and benefits required an initial annual commitment of approximately $100,000. The university and business school also committed extensive resources to faculty development, including internal grants, mentoring and training for the new faculty member. We estimate that these costs amounted to approximately $20,000. Another difficulty was the lack of textbook and related student and instructor materials. We were forced to develop our own teaching materials, including extensive use of case materials that provided a projects-based approach to learning. In addition, we developed numerous learning aids. This required a substantial time commitment from faculty, with only nominal out-of-pocket costs to the business school. Finally, during the first few years, we experienced technical difficulties with the installation and maintenance of commercial software. We obtained funding to A Financial Information Systems Curriculum 18 hire a database administrator (shared with MIS) to administer the underlying technical infrastructure, at an annual cost of approximately $60,000. CONCLUSIONS AND IMPLICATIONS There are several reasons to believe that this new curriculum serves the needs of students, employers, and the profession. First, we evaluated our course materials against the standards espoused by the International Federation of Accountants' International Education Guideline No. 11, “Information Technology In The Accounting Curriculum,” which is endorsed by the AICPA (Callaghan, Peacock and Savage, 2000, 1-12). This guideline discusses curriculum relative to a framework of four professional roles for accountants: user, manager, designer and evaluator of information systems. Our Model-Oriented Tool-Enhanced approach “elects a curriculum in support of the designer role.... it permits maximum flexibility to students in terms of providing building blocks for the remaining two roles identified by IFAC.... and it permits a disciplined, normative approach to systems development.” (Callaghan, Peacock and Savage, 2001, 52) Second, we assessed course content by eliciting the perceptions of accounting and IT business professionals about the curriculum (Callaghan, Peacock and Savage, 2001, 51-60). We sent a survey to business professionals who were associated with our business school, either in an advisory, recruiting, alumnus, or sponsorship capacity. The questions included whether or not an item should be A Financial Information Systems Curriculum 19 included the curriculum, and if yes, the extent of inclusion. In general, the conclusion was that the respondents were less in favor of technical hardware, software, and application skill categories, and more in favor of a higher level of abstraction, traditional accounting, and control and business application of IT skills. Third, before we presented the degree for approval, we asked stakeholders to express their opinions regarding this course. Table 7 contains selected comments from some of the stakeholders about the curriculum. The feedback showed wide support for the program. In addition, the departmental Advisory Board of about 20 finance and accounting professionals expressed enthusiastic support for the new curriculum. The most telling comment from one of these professionals at a recent meeting was: “We will employ as many of these graduates as you can produce.” Insert Table 7 here Based on this feedback, we believe that the proposed curriculum will serve the needs of students, regional employers, and the profession. We expect this new curriculum to attract students who would otherwise migrate to the MIS discipline because of the perceived “softness” of the IT component in traditional accounting curricula. We believe that by failing to add sufficient value to the IT skill-set of our graduates, we have failed to keep up with market demands, and have experienced declining student enrollments. In support of this, Albrecht and Sack A Financial Information Systems Curriculum 20 (2000, 9-10) found that graduates who work with technology are paid the highest premiums, with salaries in public and private accounting being the lowest. The time has come to reengineer accounting curricula so that students have choices with regard to specializations within the profession. Seizing the moment to make needed changes could increase our relevance and open new opportunities for accounting education. Our technology-rich approach retains the rigor of traditional programs, but we have expanded the horizons of the prospective financial professional from one of viewing accounting as a stand-alone, untimely, inflexible information system, capturing only “accounting transactions” and their limited characteristics, to one of a real-time, enterprise-wide, activity-driven information system, used by a variety of users with a variety of views (requirements). Furthermore, it represents a shift of focus from implementing costly controls to that of embedding controls within information systems during the development phase, and of continuous systems monitoring. We believe that it is important for traditional accounting educators to take this more expanded view of the discipline, not only in accepting a curriculum like the one we propose, but as importantly, to bring this more expansive view to the traditional accounting curriculum itself. For example, in principles of accounting, one could introduce the notion of how accounting data sits within the overall enterprise database. Intermediate financial and cost accounting could incorporate A Financial Information Systems Curriculum 21 analyses of data from non-accounting sources. In this way, all accounting curricula can move toward a more realistic enterprise-wide approach to problemsolving and decision-making. A Financial Information Systems Curriculum 22