lect2 2013
TRANSCRIPT
-
7/28/2019 lect2 2013
1/45
-
7/28/2019 lect2 2013
2/45
Organisation structure & AIS
The structure of an organization helps to allocate
1. Responsibility roles defining
2. Authority define access control
3. Accountability whose accountable to which assetcommon method segment by business function
Business AIS helps improve operation efficiency make
better decisions , maximizing profit.
NPO/NGO
improve operations efficiency, maximizebenefits derived from their resources
Business activities Organizing capital, premises&equipment Acquisition,Recruiting employees, Acquiring inventory, Manufacturing products,
Marketing&selling a product/service, cash collection, cash disbursement
-
7/28/2019 lect2 2013
3/45
-
7/28/2019 lect2 2013
4/45
Organizational Structure for a DistributedProcessing system
-
7/28/2019 lect2 2013
5/45
Transactions Processing
Manual TP: journal ledger summarize,
produce meaningful information.
Computerized TP : capture record posting
data
-
7/28/2019 lect2 2013
6/45
-
7/28/2019 lect2 2013
7/45
Suggestion designing a form
1. simple and easy to understand
2. name describing its function3. Have serial specific ID no. very important control
4. Sufficient space provided for recording necessary information
5. Related information should be grouped together
6. If need multipart form create by filled out once, reducerepetitious writing
7. explanatory note provided in a suitable place if there is ambiguity
8. Related forms that has similar information are placed in the same
position ease burden of completing the form
9. multipart form Routing instructions in an appropriate place.
Eg: coloured paper where each copy is to be sent.
10. Information on the form follow a logical sequence
-
7/28/2019 lect2 2013
8/45
RECORDING TRANSACTION
made on a journal, Types of journal :
1. Specialized journal
Used for repetitive transactions and simplify the process of
recording a large number of similar transactions exp. Sales
journal, purchases journal, cash receipts journal and cashpayment journal.
2. General journal
Records the transactions that cannot be categorized and
recorded in any of the specialized journal ( non- routinetransaction such as purchase or sale of asset, interest accruals
and adjustment.
-
7/28/2019 lect2 2013
9/45
POSTING TRANSACTION
Data in journals posted to ledgers groupings similar transactions types
meaning full information to be obtained.1. General ledger : Many accounts are recorded at summary level for the
assets, liability, expenses and revenue.
2. Subsidiary ledger: Maintained for AR, AP & inventory (large number
of transaction occurred). The summary recorded in special accounts
(control account in GL), to help preserve the completeness.
Posting process
accounts in ledger would be arranged in a logical manner by assigning
each account with a unique number or account code.
The list of all the account names and codes
chart of accountsA well-designed chart of accounts should accomplish the following:
adequate description of each account
distinction between account titles
assistance in the preparation of required reports
-
7/28/2019 lect2 2013
10/45
Information for decision making2nd function of AIS
1. financial statements: Statement of financial performance Income statement Statement of financial position (balance sheet)
Statement of cash flows
Statement of changes in equity
2. Management reports for management control purposes. For example: inventory levelsto monitor low or high turnover of product decide
on reorder level, marketing strategy
profitability of each productto decide which product should be focus
on
performance of each salespersonfor reward and incentives, training
requirements
daily cash balances and commitmentsshort term cash management
extent of back ordersdelaying customers orders is not good, should
decide to change vendor
-
7/28/2019 lect2 2013
11/45
Internal Control IssuesAdequate internal controls are required to:
facilitate the capture of reliable business data
safeguard assets and business data
enable the execution of management objectivesInternal control principals include:
documented procedures
quality of personnel
authority
recording of transactions
internal verification
-
7/28/2019 lect2 2013
12/45
Impact of IT on AISManual system is a system composed of human resources.
Computerized system is system composed of computer
resources.
Computer-based accounting system is accounting systemused by both human and computer resources.
Information technology (IT) is the processing of
information using computer systems.
Computers assist in processing high volumes of data at highspeeds and the power of computers has increased because
of improvement in technology.
-
7/28/2019 lect2 2013
13/45
Transforming the Data into Information
Functions for transforming data into
information according to the general AIS
model:
1. Data Collection
2. Data Processing
3. Data Management
4. Information Generation
-
7/28/2019 lect2 2013
14/45
-
7/28/2019 lect2 2013
15/45
3. Data Management
Storing
Retrieving
Deleting
4. Information Generation
Compiling
Arranging
FormattingPresenting
-
7/28/2019 lect2 2013
16/45
The Evolution of IS Models: The Flat-File Model
-
7/28/2019 lect2 2013
17/45
Data Redundancy Problems
Data Storage - excessive storage costs of paper
documents and/or magnetic form
Data Updating - changes or additions must be
performed multiple times
Currency of Information - potential problem of
failing to update all affected files
Task-Data Dependency - users inability to obtain
additional information as needs change
Data Integration - separate files are difficult to
integrate across multiple users
-
7/28/2019 lect2 2013
18/45
The Evolution of IS Models: The Database Model
-
7/28/2019 lect2 2013
19/45
Information Systems
for Business Transactions
Payment
Accounts
Payable
Receiving
Purchasing
Old Process
Supplier Supplier
Goods
Invoice
Purchase
Order
Receiving
Documents
Copy
Of
Purchase
Order
New Process
Purchasing
Accounts
Payable
Receiving
Data-
base
Goods
Payment
Purchase Order
-
7/28/2019 lect2 2013
20/45
ISSUE OF ACCOUNTINGINDEPENDENCE
Information reliability requires accounting
independence.
Accounting activities must be separate andindependent of the functional areas maintaining
resources.
Accounting supports these functions with information
but does not actively participate. Decisions makers in these functions require that such
vital information be supplied by an independent
source to ensure its integrity.
-
7/28/2019 lect2 2013
21/45
Basic AIS Functions
1. Collect and store data about the
organizations business activities and
transactions efficiently and effectively2. Provide information useful for decision
making
3. Provide adequate controls to ensure thatdata are recorded and processed
accurately.
-
7/28/2019 lect2 2013
22/45
1. Collect and store data
Capture transaction data on sourcedocuments.
Record transaction data in journals,which present a chronological recordof what occurred.
Post data from journals to ledgers,which sort data by account type.
-
7/28/2019 lect2 2013
23/45
TRANSACTION PROCESSING
ProcessInput Output
SensorControl
Feedback Loop
Data Files
-
7/28/2019 lect2 2013
24/45
Capture Transaction Data on
Source Documents
Sales Invoice
Sales Order Purchase Order
O
Source documents are special
forms used to capture
transaction data.
-
7/28/2019 lect2 2013
25/45
Capture Transaction Data on
Source DocumentsControl over data collection isimproved by prenumbering each
source document.Accuracy and efficiency in recordingtransaction data can be further
improved if source documents areproperly designed.
-
7/28/2019 lect2 2013
26/45
System - Inputs
Input documents can be categorizedinto three types . . .
Source Documents
Product Documents
Turn-around Documents
-
7/28/2019 lect2 2013
27/45
Data
Collectio
n
1
23
SalesSystem
Customer
Order
Sales
Order
Creation of a Source Document
Source
Document
1
-
7/28/2019 lect2 2013
28/45
Data
Collectio
n
Source
Document
1
23
SalesSystem
Bill
Remittance
Advice
Product
Document
Customer
Order
Sales
Order
A Product Document
-
7/28/2019 lect2 2013
29/45
Data
Collection
Source
Document1
2
3
Sales
System
BillRemittance
Advice
Product Document
Customer
Order
Sales
Order
A Turnaround Document
Cheque 12
Remittance Advice
Cash Receipts
System
-
7/28/2019 lect2 2013
30/45
Source Document Function
Sales Order Record Customer OrderDelivery Ticket Record Delivery to Customer
Remittance Advice Receive Cash
Deposit Slip Record Amounts Deposited
Credit Memo Support Adjustments to Customer A/cs
Revenue Cycle
General Ledger and Reporting System
Journal Voucher Record entry posted to general ledger.
General Ledger & Reporting System
E dit C l
-
7/28/2019 lect2 2013
31/45
Source Document Function
Purchase Requisition Request that purchasing departmentorder goods.
Purchase Order Request goods from vendors.
Receiving Report Record receipt of merchandise.
Cheques Pay for items.
Expenditure Cycle
Source Document FunctionW4 forms Collect employee withholding data.
Time cards Record time worked by employees.
Job time tickets Record time spent on specific jobs.
Human Resource Cycle
-
7/28/2019 lect2 2013
32/45
ProcessInput Output
SensorControl
Feedback Loop
Data Files
-
7/28/2019 lect2 2013
33/45
Data Processing
Updating previously stored informationabout the resources affected by theevent and agents who participated in
the activity.
-
7/28/2019 lect2 2013
34/45
Batch vs Online
batch processing
Periodic updating of the data stored
A system whereby business transactions are accumulated
over a period of time and prepared for processing as a singleunit or batch.
on-line (real-time) processing.
A system whereby each transaction is processed
immediately, without the delay of accumulating transactionsinto a batch.
Always current.
Immediate updating as each transaction occurs
-
7/28/2019 lect2 2013
35/45
-
7/28/2019 lect2 2013
36/45
Control Posting
can be achieved through audit trail
An audit trail provides a means to
check the accuracy and validity ofledger postings.
-
7/28/2019 lect2 2013
37/45
ProcessInput Output
SensorControl
Feedback Loop
Data Files
-
7/28/2019 lect2 2013
38/45
Storage
Ledgers and files provide storage of data inboth manual and computerized systems. The General Ledger
The Accounts Payable Ledger
The Accounts Receivable Ledger
A ledger is a book of financial accounts, whichreflect the financial effects of the firms
transactions after they are posted from thevarious journals.
Fl f f F h E
-
7/28/2019 lect2 2013
39/45
Sales
Order
Customer
Order
Flow of Information From the EconomicEvent to the General Ledger
Journal
EntrySales
Journal
General
Ledger
AR Sub
LedgerPeriodically reconcile subsidiary
ledger to General Ledger
PostPost
-
7/28/2019 lect2 2013
40/45
File
A file is an organized collection of data. Files may be in Manual or Computer (magnetic)
A transaction file is a collection oftransaction input data - normallytemporaryin nature.
A master file is a collection of data that areof a more permanentor continuing interest
A reference (table) file contains data thatare necessary to support data processing
-
7/28/2019 lect2 2013
41/45
2. PROVIDE USEFULINFORMATION
Information is provided in theform of reports that fall into
two main categories:financial statements
managerial reports
-
7/28/2019 lect2 2013
42/45
3. PROVIDE ADEQUATECONTROL
Ensure that the informationproduced by the system is reliable.
Safeguard organizational assets.Ensure that business activities areperformed efficiently and in
accordance with managementsobjectives.
-
7/28/2019 lect2 2013
43/45
Internal Control Considerations
1. Provide for adequate documentation ofall business activities. allows management to verify that assigned
responsibilities were completed correctly.
2. Design the AIS for effectivesegregation of duties.
refers to dividing responsibility fordifferent portions of a transaction amongseveral people.
-
7/28/2019 lect2 2013
44/45
-
7/28/2019 lect2 2013
45/45
Group Presentation for next
week1. Find one accounting package that available in
Malaysian market
2. Explain background (history, developer,
distributor) of that package
3. Explain modules that available in that software.