Traditional Acounting Systems - PDF

COBIT®, UBS
BUACC5937 SEMESTER 1 2018
NAME: STUDENT ID:
NAME: STUDENT ID:

Student name – ID BUACC5937 SEM1 2018
Student name – ID Assignment 1
Contents
Page Number
1 Task 1 2
1.1 Traditional accounting systems
1.2 Options for Smith Brothers
1.3 Accounting software packages
1.4 Excel or Databases
2 Task 2 – COBIT®
2.1 Summarize the IT Governance Policy
2.2 IT Governance Policy to shareholders
2.3 IT Governance Policy to stakeholders
2.4 IT governance and the corporate governance statement
3 Task 3 – UBS
3.1 Failure of controls
3.2 Avoidance of Failures
4 References/Bibliography
5 Appendices
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Student name – ID BUACC5937 SEM1 2018
Student name – ID Assignment 1
1 Task 1
1.1 Explain traditional accounting system for recording transactions. 100
Identify its strengths and weaknesses 50 + 50
Discussion: In Traditional Accounting System, the paperwork, receipts and payments are sort and
store in 12 separate months. All the original documents are kept and dated correspondingly. The
traditional accounting system has payment amounts and date of transactions recorded. All the
financial transaction is saved online by monthly and the transaction of the financial year are saved
in the inbox that are kept in a separate folder of the hard drive. All the electronic records are kept
backup on a storage device and external hard drive rather than keeping in the internal hard drive of
the computer. Each month a financial record is reconcile requesting for a statement and bills that
need to be sent on monthly basis.
Strength: the strength of the traditional accounting system is discussing below:
 The expenses are less.
 With manual systems it is easier to make entries correctly.
 The risk of data getting corrupted is much less.
 The risk of losing data is less when records need to store in an environment that is fire-
proof.
 It generally avoids the problems that comes with similar records having duplicate copies.
 The manual process is simplified as it is not necessary to know about calculating in
accounting software for information.
 It includes flexibility and agility in redefining the business process, implementation of the
control point for collection of data.
Weakness:
 An inaccurate costing information is provided which lead to a wrong decision.
 It used to control the purpose of fixing the selling prices.
 Number of transactions are getting delayed.
 With the fast growing business it is becoming difficult to keep the pace of report keeping.
 Need to spend considerable amount of time in maintaining the books and journal
transaction.
 Payments are getting delayed.
 Unable to receive payment from customer by due date or either they do not make payment
even.
 Not possible to chase the overdue payment.
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Student name – ID BUACC5937 SEM1 2018
Student name – ID Assignment 1
1.2 What are various options that Smith Brothers have if they move from their current
system? 175
Discussion: If the Smith Brothers want to move from their current traditional accounting system,
then they can start with the computerized accounting system. This will make it easier to capture
information. It also meets the tax, generate the reports and some legal requirements. With the use of
accounting software system will simplify the electronic record keeping. It will help the Smith
Brothers to record the transaction made in the business which include the income and the expenses
done, payment done to the workers and get the details of the stocks and the assets. The storage
space is less required and the ways to keep the financial records are efficient. The system has an
option to record a sale for invoice but not for cash payment to receive. It easily generates the order,
invoices, payment records of the employee, debtor reports, and inventory reports. It provides some
functions of reporting and tallies the amount automatically. The system has the latest tax laws and
rulings, and tax rates. The Smith Brothers can provide email invoice to the customer, orders to the
suppliers or even returns BAS to the Taxation Office of Australian. It allows to keep the backup of
the records and is safe from fire or theft. The Smith Brother Business need more than one software
to meet the legal and taxation needs which is important. Thus, Smith Brothers has to take some
advice from the financial adviser before they make any software purchase for keeping their records.
They can also look into the Australian Taxation Official website to check through the accounting
software tax compliant.
1.3 Two accounting software packages 100
Explain how it will solve their current problem 100
Explain the strengths and any weaknesses 50 + 50
Explain the cost to purchase and implement 100
Discussion: The two type of accounting software packages that could be used are:
Xero: Xero has a massive market in Australia as it is an online based accounting software which has
achieve greater popularity in the country. It is basically created for the business users. The business
owner can use Xero for entering invoices and for statements reconcile. The information could be
easily and securely access by the accountant and prepare the BAS to annually return the tax. The
current problem of the Smith Brother could be reduce with the implementation of Xero. The
application has a dashboard panel where the information will be displayed with a list of invoices. It
has a center and front activity buttons that can create a new invoice, Bills payment can be done and
claims an expense. The strength of Xero is that it has fixed a robust accounting system that has a
barcode and a feature of RFID tracking. It even tracks the physical features. It has a core accounting
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