Accounting financial systems and auditing Slide bài giảng Kế toán Hệ thống tài chính và kiểm toán

Accounting financial systems and auditing Kế toán Hệ thống tài chính và kiểm toán Accounting financial systems and auditing Slide bài giảng Kế toán Hệ thống tài chính và kiểm toán gồm những nộidung Understand how an accounting system operates Describe the 3 phases involved in the development of accounting systems, and understand the essential characteristics inherent in the system Identify the principles of internal control and understand the limitations of internal control systems

Learning Objectives

1 Understand how an accounting system

operates

2 Describe the 3 phases involved in the

development of accounting systems, and understand the essential characteristics inherent in the system

3 Identify the principles of internal control

and understand the limitations of internal control systems

Learning Objectives (cont’d)

4 Understand the advantages and

disadvantages of computerised accounting systems

Lecture References

• Hoggett, Edwards & Medlin, 6th edition,

Chapter 7

– Consideration of key elements

• Systems implementation and review

– Parallel operation

Internal Control Systems

• Internal control system defined

• Principles of internal control systems

– Clearly established lines of responsibility

– Division of responsibility for related transactions – Mechanical and electronic devices

Limitations of Internal Control

Systems

• Absolute assurance not possible

• Effectiveness influenced by size of entity’s

operations

• Good controls can break down due to

tiredness, indifference or carelessness

• Reliance on segregation of duties

• Difficulties in detecting computer fraud

Manual Accounting Systems —

Subsidiary Ledgers

• Control accounts and subsidiary ledgers

– Summary information

• Control account – Detailed information

• Subsidiary ledger

• Accounts receivable

• Accounts payable

• Inventory

General Ledger Accounts Receivable Control

Date Debit Credit Balance

Subsidiary Ledger

R Baker Date Debit Credit Balance Nov 1 1100 Nov 3 1100 - Nov 20 2400 2400

Subsidiary Ledger

D Cane Date Debit Credit Balance Nov 1 2200 Nov 12 900 3100 Nov 28 2600 500

Schedule of Accounts Receivable

Manual Accounting Systems —

Special Journals

• General journal inefficient where there are

many transactions

• Group like transactions and record in a

special purpose journal

journal

Sales Journal

• Records only credit sales of inventory

• Total posted to general ledger monthly

• Detail (by debtor) posted to subsidiary

Sales Journal

Invoice Posting GST Accounts Date No Account Ref Sales Collections Receivable Jan 2 401 R Abbot 1100 110 1210

Date No Account Ref Sales Collections Receivable

Purchases Journal

• Records only credit purchases

• Can be used for items other than inventory

• Total posted to general ledger monthly

• Detail (by debtor) posted to subsidiary

ledger daily

• Advantages

– as for sales journal

Purchases Journal

Date Invoice Account Terms Ref Purch Outlays Payable Jan 3 Jan 2 Kirby Ltd n/30 1900 190 2090

Purchases Journal

Date Invoice Account Terms Ref Purch Outlays Payable Jan 3 Jan 2 Kirby Ltd n/30 1900 190 2090

Cash Receipts Journal

• Records all receipts of cash

• Records each receipt and total banked

• Totals posted to general ledger monthly

• Detail (debtors only) posted to subsidiary

ledger daily

• Columns set up for common receipts

Cash Payments Journal

• Records all payments of cash

• Totals posted to general ledger monthly

• Detail (creditors only) posted to subsidiary

ledger daily

• Columns set up for common payments

Use of the General Journal

Transaction Types Summary

Other Issues

• Abnormal balances in subsidiary ledgers

– Credit balances in accounts receivable

– Debit balances in accounts payable

• Account set-offs

– Buying and selling from same customer/supplier – Need legal right to set-off

Computerised Accounting

Systems

• Use of computers in business

• Manual vs computerised systems

-Accounts receivable

master file end of period

Accounting Software

• Electronic spreadsheets

– Excel, Lotus 123

• General ledger programs

– ACCPAC, Attache, MYOB, QuickBooks, Sybiz – Data input obtained from source documents – Output produced by the program

An Introduction to MYOB

An Introduction to QuickBooks

• Improved reporting and decision making

• Faster response time

• High development / purchasing cost for installing the software

• Need to develop a system of coding and checking

• Lack of audit trail

• Possible resistance from the staff

Accounting Cycle — Manual and

Computerised

Steps in Accounting Cycle Manual Computerised

• Recognise transactions Manual Manual

• Journalise transactions Manual Manual entry

• Post ledger accounts Manual Automatic

• Prepare unadjusted TB Manual Automatic

• Journal adjusting entries Manual Manual – some auto

• Prepare worksheet Manual Unnecessary

• Post adjusting entries Manual Automatic

• Prepare adjusted TB Manual Automatic

• Journalise closing entries Manual Automatic

• Post closing entries Manual Automatic

• Prepare post closing TB Manual Automatic

• Prepare financial statements Manual Automatic

• Journalise reversing entries Manual Automatic

• Post reversing entries Manual Automatic

• Recognise transactions Manual Manual

• Journalise transactions Manual Manual entry

• Post ledger accounts Manual Automatic

• Prepare unadjusted TB Manual Automatic

• Journal adjusting entries Manual Manual – some auto

• Prepare worksheet Manual Unnecessary

• Post adjusting entries Manual Automatic

• Prepare adjusted TB Manual Automatic

• Journalise closing entries Manual Automatic

• Post closing entries Manual Automatic

• Prepare post closing TB Manual Automatic

• Prepare financial statements Manual Automatic

• Journalise reversing entries Manual Automatic

• Post reversing entries Manual Automatic