FNSACC416: Assessment of Accounting Information Systems Report

This report provides a comprehensive assessment of accounting information systems, encompassing various aspects of their setup, operation, and key features. It begins by outlining the procedures for operating a computerized accounting system, including setting up the system, managing suppl...Read More

Running head: ASSESSMENT OF ACCOUNTING INFORMATION SYSTEMS
Assessment of Accounting Information Systems
Name of the Student
Name of the University
Author note

1ASSESSMENT OF ACCOUNTING INFORMATION SYSTEMS
Table of Contents
1. Project..........................................................................................................................................2
1. Introduction..................................................................................................................................2
2. Discussion....................................................................................................................................2
2.1 Procedures for Operation of a Computerized Accounting System........................................2
2.2 Discussion on Research Topics.............................................................................................5
a. Key Features and Characteristics of Information based on Financial Data.........................5
b. Key Features of Desktop and Cloud-based computerized accounting systems..................6
c. Key Features of Organisational Policies and Procedures....................................................8
d. Key Requirements of Financial Services Industry Legislation...........................................9
3. Conclusion...................................................................................................................................9
2. Short Answer Questions............................................................................................................11
References......................................................................................................................................16
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1. Project
1. Introduction
The computerized accounting systems are termed as software programs, which would be
stored on the computer, server or which could be accessed directly through the Internet. The use
of these systems would help the users for setting up of expense and income accounts, which
includes advertising expenses, sales or rental incomes and various material costs (Amahalu,
Abiahu and Chinyere 2017). Thus, depending on the program, some kind of accounting systems
helps in preparing for handling of payroll, management of project costing and preparing of tax
documents.
This document helps in detailing out the procedures based on setting up and operating for
a computerized accounting system. In the later sections of the report, certain topics of research
would be discussed based on the understanding the key features of the research based on the
detailing of computerized accounting systems. The primary features of organizational procedures
and policies are also being discussed based on the operation features of a computerized
accounting system.
2. Discussion
2.1 Procedures for Operation of a Computerized Accounting System
In line with the organizational requirements, policies and procedures based on setting up
and operating for a computerized accounting system, some of the basic procedures are discussed
as follows:
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3ASSESSMENT OF ACCOUNTING INFORMATION SYSTEMS
a. Setting up the system for an integrated accounting system – In the initial phase, the
accounting managers and computer operators should perform some processes based on deciding
over the most appropriate kind of accounting systems (Liu et al. 2015). These could include sales
commissions’ calculations or performing job costing automatically.
b. Setting up of suppliers, inventory items and customers – In order to present an
integrated setting up of customers, inventory items and suppliers within the system, there should
be a proper procedure to be included within the accounting system (Wu et al. 2016). Hence, a
proper choice of suppliers who would be able to supply the software packages, hardware systems
and networking aspects.
c. Processing of accounting transactions within the internal system – After the
installation of the computerized accounting system within the organizational requirements, it
should be ensured that this system should be linked to a central database, which helps in
organizing of data and providing access to stored data. The back-end database runs in the
background and the user is not aware of the functioning (Turner and Weickgenannt 2020).
However, this system responds to the exact requirements provided by the user and up to the
extent to which the user is provided access.
d. Ensuring data integration – The accounting system software that would be installed
within the organization should be able to provide integrity of data within the system. It would
also provide identification of users and availability if data.
e. Producing, generation and printing reports – The accounting system would have the
facility of generating different financial analysis reports (Birt et al. 2020). The reports that could
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4ASSESSMENT OF ACCOUNTING INFORMATION SYSTEMS
be produced, generated and printed are: income statement, income and expense statement,
balance sheet and cash flow statement.
f. System maintenance – In order to perform maintenance over the computerized
accounting system, a separate software package known as computerized maintenance
management system (CMMS) should need to be installed as it helps in the maintenance for the
operations within the computer (Schaltegger and Burritt 2017). The information generated from
the maintenance would help different workers for performing their jobs in an effective manner.
g. Ensuring system integrity – The system integrity checks should be performed within
the computerized accounting system based on determination of the trustworthiness of the system.
It would also be required to ensure whether the stored data has been damaged or changed
(Vovchenko et al. 2017). However, the system integrity checks should be performed using the
techniques such as system file checking, which would perform the function of scanning for the
integrity for the operating system based on the identification of any changes made.
h. Identification of technical help – Technical help would be required with the use of
the accounting system. Any kind of system errors and problems faced with the use of the new
computerized accounting system would be mitigated and resolved by technical support experts.
However, the technical support might be delivered with the help of different technologies based
on the situation (Kumar et al. 2015). Some of the examples of technical help that would be
provided include: telephone calls, support forums, e-mail and others.
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5ASSESSMENT OF ACCOUNTING INFORMATION SYSTEMS
2.2 Discussion on Research Topics
a. Key Features and Characteristics of Information based on Financial Data
The source document based on financial data comprises of some basic facts in relation to
the transactions being performed within the organization. Moreover, it supports the knowledge of
the transaction on the specific date in which they were performed, the person with whom the
transactions would have been performed, the amount and the purpose.
Some of the features and characteristics of using source documents based on financial
data are:
1. It provides a brief description over the business transaction being performed within the
organization. It thus supports the basic facts in relation to the transaction that includes details
about the amount of transaction done, the receiver and sender of the transaction process, the date
on which the transaction was made and the purpose for which the transaction was made.
2. The source documents also comprises of information based on bank statement, which
is a form of financial data. They thus comprise of several adjustments that would be made to the
book balance of the organization (Barth 2015). This determines the cash in hand that the
organization should have a reference based on bringing their records into a proper alignment
with the bank accounts.
3. Information included within the source document based on financial data includes cash
register tape. This could be further used as evidence based on determining the cash sales that
would support the recording of sale transaction.
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6ASSESSMENT OF ACCOUNTING INFORMATION SYSTEMS
4. The receipt for credit card could also be used as an evidence for understanding and
keeping a track over the disbursement of funds that would be credited or debited from the bank
account of the organization.
5. Sales order slip details help in detailing the total number of sales and the transactions
made. This could also be used for providing an invoice to customers, which would in turn a
result in forming a record for sale transaction.
6. The supplier invoice is defined as a source document that would be able to support the
issuance result of cash. It would further help in checking the form of electronic payment that
would be made to a supplier (Liberti and Petersen 2019). The record based on a supplier invoice
would also help in supporting the record keeping for inventory items, any form of fixed asset and
expenses made within the organization.
7. The time card is a source document in which information is supported for issuance
made for a paycheck based on cash-based transactions. It would also detail out the different
electronic payments made to a certain supplier. The supplier invoice would also be able to
support the invoices created for customers.
b. Key Features of Desktop and Cloud-based computerized accounting systems
The key features that are supported with the desktop-based computerized accounting
systems are:
1. Numerous Transactions – The desktop based accounting systems aids towards
performing a large of financial transactions with high accuracy and speed. It further helps in
determining that the best form of outputs are being generated based on the inputs that are made
to the system.
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2. Instant Reporting – Due the highly functional nature of the computerized accounting
system, it is capable of performing a quality-based and quick reporting process (Wu, Terpenny
and Schaefer 2017). This is also made possible due to the accurate nature of generating results
based on the inputs and high speed.
3. Reduced paper works – The previous manual based accounting processes used to
occupy huge space in terms of storage. Therefore, high volume of transactions was difficult to be
handled at a certain point. However, with the enhanced desktop-based computerized accounting
systems, it is highly helpful for the organization to dispense large volume of transactions with
high amount of accuracy.
4. Accounting Queries – External parameters are the dependable factor based on
accounting queries. With the help of the desktop-based computerized accounting systems, any
query in relation to overdue account of customers could be answered in an easy format by the
use of a structured query language (SQL), which would be a support from the database
technology.
The key features of cloud-based computerized accounting systems are:
1. Data Accessibility – The access to financial data could be considered as the most
exclusive feature of the cloud-based accounting system. With the support of cloud-based system,
any user would be able to access the data from any part of the world and under any
circumstances.
2. Enhancements in cost structure – With the use of the cloud-based accounting
system, users are charged on a monthly basis. The service could only be accessed whenever the
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8ASSESSMENT OF ACCOUNTING INFORMATION SYSTEMS
user would be in need of the service. This generally increases the performance levels and allows
users to move up as per the necessity.
3. Software Update – Cloud-based accounting systems supports an ongoing process of
updates that are brought in without the prior knowledge of the user (Fylaktopoulos et al. 2018).
Whenever, a user would login to the system, the software would remain up-to-date.
4. Backups – The backup to data happens on an automatic basis. These backups are
therefore highly reliable in nature, redundant and happen on a frequent basis. With the purpose
of backups, there would be no need for recruiting an internal IT team for purchasing, upgrading
and maintenance for a top-quality backup solution.
c. Key Features of Organisational Policies and Procedures
The features supported by organizational policies and procedures in relation to the setting
and operation of computerized accounting system are:
1. Informational characteristics – The accounting information should be highly
reliable, objective and verifiable in nature. Hence, they primarily follow the standards set by the
organization (McCann and Ortega-Argilés 2016). The information gathered over a period from
the accounting systems should be highly verifiable, have a certain objective of deriving further
information and it should also be reliable in nature.
2. Procedural characteristics – The accounting procedures would range from simple
tasks including the posting over a credit payment till the creation of complex kind of financial
reports. The organizational policies also support consistency whenever more than one form of
acceptable option would be responsible for the recording of financial information (Wu et al.
2017). Another important feature is comparability, which is defined as an external characteristic
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and refers to the ease with which the investors, lenders and public would be able to compare the
financial statements made by one business with other businesses.
d. Key Requirements of Financial Services Industry Legislation
Some of the key requirements of the financial services industry legislation in relation to
information privacy during the use of computerized accounting systems are:
1. Tax Agent Services Act – This act defines the constitution of the provisioning of the
BAS Service (Mills and Haines 2015). It further requires an individual who would be providing
such form of service to own a registration as a BAS Agent.
2. Privacy Act – When working over a computerized accounting system, the
organization should be able to observe all forms of requirements based on ensuring that the
clients would have the right to know the information held by them. They should also have the
obligation to correct any kind of information, which would be considered to be wrong.
3. Trade Practices Act – The business should be subjected to competition component
based on the Trade Practices Act (Arner, Barberis and Buckey 2016). It should also be bound
based on the fair trading legislation in the certain relevant state of the Fair Trading Act.
3. Conclusion
Based on the discussions presented above, it could be concluded that the setting up of the
computerized accounting systems should be done as per the listed procedures. These procedures
would form a guiding point and thus are able to cover each of the procedures that would be
required to be followed during the setting up of the system. These procedures are being set as per
the proper standards of the organization and ensuring that the exact procedures would be
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10ASSESSMENT OF ACCOUNTING INFORMATION SYSTEMS
followed for enhancing the growth of the organization. The other parts of the report also
discusses about the features of information that are comprised within financial data. Different
features of cloud and desktop-based computerized accounting systems have been discussed. The
organizational policies and procedures in relation to the setting up of the computerized
accounting system have been discussed. Based on such discussions, it would be able to conclude
that this system would be highly useful for the organization and would also serve for the
organizational benefits.
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11ASSESSMENT OF ACCOUNTING INFORMATION SYSTEMS
2. Short Answer Questions
1. The types of transactions that would be required to be processed are:
a. Sales – These are transactions in which the property would be transferred from the
buyer to the purchaser for credit or money.
b. Purchases – These are transactions required by the organizations for obtaining
services or goods based on accomplishment of goals as set by an organization (Peters and Panayi
2016).
c. Receipts – These refer to transactions made by a business during the delivery of
services or goods to other organization.
d. Payments – These are the kind of transactions that primarily refer to business and their
achieving of money for a particular service or good.
2. The activities that could be performed during inputting data are:
a. Sorting and preparing documents for data entry.
b. Inputting data into the database software and ensuring accurate data has been inputted.
c. Creation of data backups as outlined in a contingency plan (Yang et al. 2015).
d. Responding towards information requests made from authorized members.
3. During the addition of a new general ledger account, it should be considered to be
important that the numeric form of General Ledger Chart of Accounts would be grouped and
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coded in the proper method of accounting (Wixted and Wells 2017). Hence, a proper review over
the entire section would need to be made before the creation of a General Ledger account.
4. A generated report confirms of the accuracy and completeness for any kind of
information based on which the auditor would perform future functions (Appelbaum et al. 2017).
This generated report helps in the discussion over any kind of custom reports or queries based on
the factor of completeness or correctness.
5. The steps that needs to be taken for ensuring the integrity of the computerized
accounting system are:
a. A risk-based validation needs to be performed based on ensuring that protocols would
be addressed for reliability and data quality.
b. In the next step, the appropriate service providers and the exact system needs to be
chosen (Obara, Nangih and Agba 2017).
c. An audit system should be set up based on auditing over the trails. Hence, assigning of
schedules and roles needs to be done for testing the functioning of audits.
d. Change control actions needs to be taken in case any changes would be detected during
performing audits.
e. After systems are checked properly, the continuity plans of the business would be
made.
6. A chart of accounts is defined as an index comprising of all kinds of financial accounts
present within the general ledger meant for a company (Honoré et al. 2015). It can further be
defined as an organizational tool that helps in providing a breakdown for all forms of financial
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13ASSESSMENT OF ACCOUNTING INFORMATION SYSTEMS
transactions that are conducted by a company during a specific period of accounting, which is
further broken down into subcategories.
7. Accounting reports are considered as periodic statements that help towards presenting
of financial status of any company during a certain time period or sometimes over a stated time
period (Chen, Miao and Shevlin 2015). The accounting reports helps in detailing the business
operations and transactions. Examples of accounting reports are balance sheet and an income
statement.
8. ‘Restore’ is defined as the process of performing the operations of copying of backup
data from a secondary storage area to any new or its original location (Mouritsen and Kreiner
2016). This function is generally performed during the returning of data, which had been lost,
damaged or stolen to their original state or moving data to certain new location.
9. Before the performing of the end of financial year rollover, certain aspects should be
checked. These are:
a. An information would be provided to the financial accountant.
b. There should be an entry to adjustments or required transactions as per under
instruction by an accountant.
c. A backup has been created of the company related files.
10. Whenever a processing error would be detected, good form of processes and internal
controls need to be put together. It should thus be ensured that each of the forms would be
consistent in nature such that the employees would be provided with a routine while entering any
form of information within the computerized accounting software.
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11. Before the creation of a backup, certain steps need to be followed:
a. A standard way of sorting of files should be made.
b. The authority should determine the particular files, which needs to be preserved and
which are important (van Adrichem, Iqbal and Kuipers 2016).
c. Creation of a local backup system needs to be done.
d. Automation of the backup procedures needs to be followed accordingly.
12. A secure record of processed transactions should be made because there is a need of
tracking debts, creditors and expenses. Maintaining of such kind of secured records would also
help in saving accountancy costs and time. Thus, based on maintaining these secured records,
business would be able to apply and receive the proper form of benefits or credits.
13. System outputs should be reviewed on a regular basis as it would help in
determination of any kind of changes if required (Hosseini, Barker and Ramirez-Marquez 2016).
The output generated by the system should be reviewed an in case any changes within the
expected outputs are viewed, it should be brought under notice.
14. The data in relation to customers, suppliers and inventory systems should be set
within the database of the system. In the primary step, a sorting of the important details of each
of the three categories should be set. After this, the data entry operators should be responsible for
putting inputs within the system.
15. In order to solve operational problems, the various sources of technical help that
would be thought and identified to be useful are: the website of manufacturer, online customer
support and guiding manuals.
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15ASSESSMENT OF ACCOUNTING INFORMATION SYSTEMS
16. The cash transactions that would need to be processed are: settlement, which could be
in the form of debit or credit cards, bank transfer or check payments and through actual cash. On
the other hand, the credit transactions that need to be processed are: credit transactions that
would be recorded in account books.
17. The balance day adjustments that might be used for making a general journal are:
error correction records, depreciation calculation records, prepaid expenses and bad debts.
18. The customization of the chart of accounts is required for meeting requirements
because they could help towards supporting the aspect of leadership for the business
(Okungbowa 2015). It further helps in allocating every kind of transaction to a certain category
and this would further help in helping the business to view where they would be making or
spending money.
19. Reports should be generated as it helps in maintaining the business transactions.
During such process, the accountant would compare the general ledger balance to the bank
statement balance.
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