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Building an Evolvable Prototype for a Multiple GAAP Accounting Information System
Abstract
In this paper we build a prototype of an evolvable Accounting Information System (AIS) that supports multiple Generally Accepted Accounting Standards (GAAP) reporting. Reporting in multiple GAAP can have different origins: differences in local and tax GAAP, belonging to an economic group or additional regulations. Regulations change frequently: additional GAAP are imposed on companies and GAAP themselves are updated to changing economic conditions. AIS need to support multiple GAAP and evolvability is important because of the changing nature of these GAAP. Normalized Systems Theory (NST) proposes theorems for building evolvable information systems, but lacks specific guidance in business domains (e.g. accounting). Therefore we contribute to literature by showing the feasibility of using NST to design and build an AIS. We use design principles from literature to start building our prototype. The resulting prototype shows into more detail how the design principles are used into an actual software design.
... Also, the functional description expresses structure and behaviour, but not declarative-style affordances. Moreover, the generated structures mostly aim at providing "basic out-of-thebox functionalities such as CRUD 9 screens, waterfall screens, data import, document upload/download, basic user management, basic reporting, etc." [21]. ...
Nowadays, the pace of technology innovation and disruption accelerates. This poses a challenge of transforming complex functionalities of enterprise systems to a new technological environment. In this paper, we explain how enterprise engineering -theory and -theory may help to manage the relationship between system function and its construction (F/C), thus facilitating changing technology challenges more rigorously and efficiently. We introduce the notion of Affordance-Driven Assembling (ADA) and its simplified version Objectified Affordance-Driven Assembling (O-ADA), which together with the so-called Semantic Descriptions represent a software-engineering approach enabling reasoning about users and their purposes versus components and their properties. Our experiments show that engineering methods based on these theories may increase reusability of code and improve important metrics such as costs, time reduction and error rate decrease, especially when switching to a new technology. We also discuss existing approaches related to ADA and O-ADA.
Software systems need to be agile in order to continuously adapt to changing business requirements. Nev-ertheless, many organizations report difficulties while trying to adapt their software applications. Normalized Systems (NS) theory has previously been able to introduce a proven degree of evolvable modularity into software systems, based on the systems theoretic notion of stability. In this paper, we explore the applicability of this other fundamental property of systems (i.e., entropy) to the issues of software maintenance and evolvability. The underlying concepts in entropy definitions will be explained and applied to software systems and architectures. Further, the considerable complexity of running multi-tier multi-threading software systems and the relation with entropy concepts is discussed and illustrated. Finally, the concordance of design rules for controlling that entropy with previously formulated NS principles is explored.
Design science research (DSR) has staked its rightful ground as an important and legitimate Information Systems (IS) research paradigm. We contend that DSR has yet to attain its full potential impact on the development and use of information systems due to gaps in the understanding and application of DSR concepts and methods. This essay aims to help researchers (1) appreciate the levels of artifact abstractions that may be DSR contributions, (2) identify appropriate ways of consuming and producing knowledge when they are preparing journal articles or other scholarly works, (3) understand and position the knowledge contributions of their research projects, and (4) structure a DSR article so that it emphasizes significant contributions to the knowledge base. Our focal contribution is the DSR knowledge contribution framework with two dimensions based on the existing state of knowledge in both the problem and solution domains for the research opportunity under study. In addition, we propose a DSR communication schema with similarities to more conventional publication patterns, but which substitutes the description of the DSR artifact in place of a traditional results section. We evaluate the DSR contribution framework and the DSR communication schema via examinations of DSR exemplar publications.
Evaluation is a central and essential activity in conducting rigorous Design Science Research (DSR), yet there is surprisingly little guidance about designing the DSR evaluation activity beyond suggesting possible methods that could be used for evaluation. This paper extends the notable exception of the existing framework of Pries-Heje et al [11] to address this problem. The paper proposes an extended DSR evaluation framework together with a DSR evaluation design method that can guide DSR researchers in choosing an appropriate strategy for evaluation of the design artifacts and design theories that form the output from DSR. The extended DSR evaluation framework asks the DSR researcher to consider (as input to the choice of the DSR evaluation strategy) contextual factors of goals, conditions, and constraints on the DSR evaluation, e.g. the type and level of desired rigor, the type of artifact, the need to support formative development of the designed artifacts, the properties of the artifact to be evaluated, and the constraints on resources available, such as time, labor, facilities, expertise, and access to research subjects. The framework and method support matching these in the first instance to one or more DSR evaluation strategies, including the choice of ex ante (prior to artifact construction) versus ex post evaluation (after artifact construction) and naturalistic (e.g., field setting) versus artificial evaluation (e.g., laboratory setting). Based on the recommended evaluation strategy(ies), guidance is provided concerning what methodologies might be appropriate within the chosen strategy(ies).
As a commentary to Juhani Iivari's insightful essay, I briefly analyze design science research as an embodiment of three closely related cycles of activities. The Relevance Cycle inputs requirements from the contextual envi- ronment into the research and introduces the research artifacts into environ- mental field testing. The Rigor Cycle provides grounding theories and methods along with domain experience and expertise from the foundations knowledge base into the research and adds the new knowledge generated by the research to the growing knowledge base. The central Design Cycle sup- ports a tighter loop of research activity for the construction and evaluation of design artifacts and processes. The recognition of these three cycles in a research project clearly positions and differentiates design science from other research paradigms. The commentary concludes with a claim to the pragmatic nature of design science.
The central outcome of design science research (DSR) is prescriptive knowledge in the form of IT artifacts and recommendations. However, prescriptive knowledge is considered to have no truth value in itself. Given this assumption, the validity of DSR outcomes can only be assessed by means of descriptive knowledge to be obtained at the conclusion of a DSR process. This is reflected in the build-evaluate pattern of current DSR methodologies. Recognizing the emergent nature of IT artifacts this build-evaluate pattern, however, poses unfavorable implications regarding the achievement of rigor within a DSR project. While it is vital in DSR to prove the usefulness of an artifact a rigorous DSR process also requires justifying and validating the artifact design itself even before it has been put into use. This paper proposes three principles for evaluating DSR artifacts which not only address the evaluation of an artifact’s usefulness but also the evaluation of design decisions made to build an artifact. In particular, it is argued that by following these principles the prescriptive knowledge produced in DSR can be considered to have a truth-like value.
Two paradigms characterize much of the research in the Information
Systems discipline: behavioral science and design science. The behavioral-science
paradigm seeks to develop and verify theories that explain or predict
human or organizational behavior. The design-science paradigm seeks
to extend the boundaries of human and organizational capabilities
by creating new and innovative artifacts. Both paradigms are foundational
to the IS discipline, positioned as it is at the confluence of people,
organizations, and technology. Our objective is to describe the performance
of design-science research in Information Systems via a concise conceptual
framework and clear guidelines for understanding, executing, and
evaluating the research. In the design-science paradigm, knowledge
and understanding of a problem domain and its solution are achieved
in the building and application of the designed artifact. Three recent
exemplars in the research literature are used to demonstrate the
application of these guidelines. We conclude with an analysis of
the challenges of performing high-quality design-science research
in the context of the broader IS community.
This paper explores the issue of whether the field of IS is in crisis. To do so, the paper first starts by looking back on where the field has come from. Next, it assesses the status of the IS field by exploring where the field is now. That our current status remains a ‘fragmented
adhocracy’ suggests the field may indeed be in crisis or headed for a crisis. This is compounded by the fact that there are two different views on the state of the IS field, each posing its own set of threats. One is the external view of the community (the view of IS from outside the academic field); the other is the internal view (the view from inside the IS community). By analyzing these two views, a better understanding of the problems the field faces emerges. In the next part of the paper, some thoughts are presented on where might the field go from here for overcoming its internal communication deficit. The paper proposes four different types of knowledge for structuring an IS Body of Knowledge (BoK) and
following on from that, the value of creating a common BoK for the field. Lastly, the implications arising from the paper’s analysis are explored. More specifically, the paper
considers various options that are available for overcoming the internal communications deficit the IS field faces. These include changing the way the field thinks about generalizations, changing the institutional publication practices, focusing more on understanding the field’s organizational stakeholders, and developing new knowledge creation and transformation networks. If IS as a field can overcome its internal communications deficits, it might ultimately contribute to the societal challenge of developing a deliberative cyber democracy and thereby help to address the social communication deficit which is a feature of modern mass societies.
This paper uses a mixed methods approach of design science and case study research to evaluate structures of Accounting Information Systems (AIS) that report in multiple Generally Accepted Accounting Principles (GAAP), using Normalized Systems Theory (NST). To comply with regulation, many companies need to apply multiple GAAP. In case studies we identify AIS structures for multiple GAAP reporting. AIS need to cope with changes in GAAP and regulation in an evolvable way, the impact of the changes needs to be bounded. Since NST provides guidelines to design modular structures (in software) with an ex-ante proven degree of evolvability [1], we use NST to evaluate the identified AIS structures. We list violations of NST principles (combinatorial effects) and describe their manifestation in the cases. This application of NST in accounting demonstrates its relevance in non-software-specific domains. Moreover this is the first evaluation of an AIS with respect to evolvability.
Companies need to apply different sets of accounting rules, hence they need evolvable Accounting Information System (AIS) to be able to comply with regulation. This paper uses a mixed methods approach of case studies and design science to develop guidelines for designing an evolvable AIS that supports reporting in multiple Generally Accepted Accounting Principles (GAAP). In Vanhoof et al. (2014) combinatorial effects were identified in existing AIS structures, using Normalized Systems Theory (NST). NST provides guidelines to design a modular structure with an ex-ante proven degree of evolvability (Mannaert & Verelst 2009).We use these combinatorial effects to derive five guidelines to design evolvable AIS that support multiple GAAP. This is the first set of domain-specific evolvability criteria, using NST and a first application of evolvability in AIS. The matter is subject to further research, since the list of combinatorial effects is incomplete and we evaluate our guidelines theoretically.
Evaluation of design artefacts and design theories is a key activity in Design Science
Research (DSR), as it provides feedback for further development and (if done
correctly) assures the rigour of the research. However, the extant DSR literature
provides insufficient guidance on evaluation to enable Design Science Researchers
to effectively design and incorporate evaluation activities into a DSR project that can
achieve DSR goals and objectives. To address this research gap, this research paper
develops, explicates, and provides evidence for the utility of a Framework for
Evaluation in Design Science (FEDS) together with a process to guide design science
researchers in developing a strategy for evaluating the artefacts they develop within
a DSR project. A FEDS strategy considers why, when, how, and what to evaluate.
FEDS includes a two-dimensional characterisation of DSR evaluation episodes
(particular evaluations), with one dimension being the functional purpose of the
evaluation (formative or summative) and the other dimension being the paradigm
of the evaluation (artificial or naturalistic). The FEDS evaluation design process is
comprised of four steps: (1) explicate the goals of the evaluation, (2) choose the
evaluation strategy or strategies, (3) determine the properties to evaluate, and
(4) design the individual evaluation episode(s). The paper illustrates the framework
with two examples and provides evidence of its utility via a naturalistic, summative
evaluation through its use on an actual DSR project.
European Journal of Information Systems advance online publication,
11 November 2014; doi:10.1057/ejis.2014.36
Open Access
SYNOPSIS
As information and communication technologies (IT) become more deeply ingrained and inextricably woven into the fabric of organizations, more perplexing research and practice questions emerge. This commentary applies an organizing information systems research framework to accounting. The framework explicitly recognizes that complexities of the accounting value chain define relevant practice issues for research. We demonstrate application of the framework with examples that integrate different accounting disciplines and different research methodologies. Using a select number of prior research studies, we emphasize how design science, archival, and behavioral research paradigms work together to advance theory and inform practice. We also demonstrate how the framework directs future research for both well-established and emerging practice issues.
JEL Classifications: M15; M41.
ERP systems are typically the largest, most complex, and most demanding information systems implemented by firms, representing a major departure from the individual and departmental information systems prevalent in the past. Firms and individuals are extensively impacted, and many problematic issues remain to be researched. ERP and related integrated technologies are a transformative force on the accounting profession. As the nature of business evolves, accounting expertise is being called on to make broader contributions such as reporting on nonfinancial measures, auditing information systems, implementing management controls within information systems, and providing management consulting services. This review of ERP research is drawn from an extensive examination of the breadth of ERP-related literature without constraints as to a narrow timeframe or limited journal list, although particular attention is directed to the leading journals in information systems and accounting information systems. Early research consisted of descriptive studies of firms implementing ERP systems. Then researchers started to address other research questions about the factors that lead to successful implementations: the need for change management and expanded forms of user education, whether the financial benefit outweighed the cost, and whether the issues are different depending on organizational type and cultural factors. This research encouraged the development of several major ERP research areas: (1) critical success factors, (2) the organizational impact, and (3) the economic impact of ERP systems. We use this taxonomy to establish (1) what we know, (2) what we need, and (3) where we are going in ERP research. The objective of this review isto synthesize the extant ERP research reported without regard to publication domain and make this readily available to accounting researchers. We organize key ERP research by topics of interest in accounting, and map ERP topics onto existing accounting information systems research areas. An emphasis is placed on topics important to accounting, including (but not limited to): the risk management and auditing of ERP systems, regulatory issues, the internal and external economic impacts of ERP systems, extensions needed in ERP systems for XBRL, for interorganizational support, and for the design of management control systems.
Recent years have witnessed a strong and growing interest in the computer science (CS) and information systems (IS) disciplines in applying and extending ontological principles to various CS/IS domains such as knowledge representation, natural language processing, conceptual modeling, and IS development. Similar interest and work have also been observed in accounting information systems (AIS) research. Though ontology research in AIS has enjoyed sustained interest and produced some significant results, there is relatively little incorporation of recent developments in CS/IS ontology research into AIS. This paper provides an overview of some leading areas of ontology research in CS/IS and AIS in an attempt to bridge this gap. The main objectives of this paper are to (1) introduce CS/IS ontology research, (2) highlight areas of future research in AIS where CS/IS ontology research developments can be used to address important and pressing issues, and (3) broaden an area of research where AIS can make unique contributions to distinguish itself.
Two paradigms characterize much of the research in the Information Systems discipline: behavioral science and design science. The behavioral-science paradigm seeks to develop and verify theories that explain or predict human or organizational behavior. The design-science paradigm seeks to extend the boundaries of human and organizational capabilities by creating new and innovative artifacts. Both paradigms are foundational to the IS discipline, positioned as it is at the confluence of people, organizations, and technology. Our objective is to describe the performance of design-science research in Information Systems via a concise conceptual framework and clear guidelines for understanding, executing, and evaluating the research. In the design-science paradigm, knowledge and understanding of a problem domain and its solution are achieved in the building and application of the designed artifact. Three recent exemplars in the research literature are used to demonstrate the application of these guidelines. We conclude with an analysis of the challenges of performing high-quality design-science research in the context of the broader IS community.
Research in IT must address the design tasks faced by practitioners. Real problems must be properly conceptualized and represented, appropriate techniques for their solution must be constructed, and solutions must be implemented and evaluated using appropriate criteria. If significant progress is to be made, IT research must also develop an understanding of how and why IT systems work or do not work. Such an understanding must tie together natural laws governing IT systems with natural laws governing the environments in which they operate. This paper presents a two dimensional framework for research in information technology. The first dimension is based on broad types of design and natural science research activities: build, evaluate, theorize, and justify. The second dimension is based on broad types of outputs produced by design research: representational constructs, models, methods, and instantiations. We argue that both design science and natural science activities are needed to insure that IT research is both relevant and effective.
In today's increasingly volatile environments, evolvability is quickly becoming the most desirable characteristic of information systems. Current information systems still struggle to provide these high levels of evolvability. Based on the concept of stability from systems theory, we require that information systems should be stable with respect to a set of anticipated changes in order to exhibit high evolvability. This requires that information systems should be free from so-called combinatorial effects. Combinatorial effects occur when the impact of a change is dependent on the size of the information system. To eliminate these combinatorial effects, we propose four theorems that are constraints on the modular structure of software architectures. The theorems are prescriptive and ensure that stable information systems are built, thereby guaranteeing high evolvability. We further present five higher level modular structures called elements. These elements provide the core functionality of information systems and comply fully with the stringent constraints implied by the four theorems. The internal structure of these elements is described by design patterns which are eligible for automatic code generation. These design patterns offer a constructive proof that it is possible to build information systems in practice by applying this set of theorems.
This commentary discusses why most IS acade- mic research today lacks relevance to practice and suggests tactics, procedures, and guidelines that the IS academic community might follow in their research efforts and articles to introduce rel- evance to practitioners. The commentary begins by defining what is meant by relevancy in the context of academic research. It then explains why there is a lack of attention to relevance with- in the IS scholarly literature. Next, actions that can be taken to make relevance a more central aspect of IS research and to communicate impli- cations of IS research more effectively to IS pro- fessionals are suggested.
Evolvability is widely considered to be a crucial characteristic of software architectures, particularly in the area of information systems. Although many approaches have been proposed for improving evolvability, most indications are that it remains challenging to deliver the required levels of evolvability. In this paper, we present a theoretical approach to how the concept of systems theoretic stability can be applied to the evolvability of software architectures of information systems. We define and formalize the transformation of a set of basic functional requirements into a set of instantiations of software constructs. We define this transformation using both a static and a dynamic perspective. In the latter perspective, we formulate the postulate that information systems should be stable against new requirements. Based on this postulate, we derive a number of design theorems for software implementation. Using this transformation we use theoretical arguments to derive that these theorems contribute to achieving stability.
By classifying programs according to their relationship to the environment in which they are executed, the paper identifies the sources of evolutionary pressure on computer applications and programs and shows why this results in a process of never ending maintenance activity. The resultant life cycle processes are then briefly discussed. The paper then introduces laws of Program Evolution that have been formulated following quantitative studies of the evolution of a number of different systems. Finally an example is provided of the application of Evolution Dynamics models to program release planning.
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