Presented by: Mr. Raziq Chapter 3 Accounting Systems and Internal Control Slide 3.1.

Slides:



Advertisements
Similar presentations
T-account – represent the general ledger –Double-entry bookkeeping Debit – the left side of an account. Credit – the right side of an account. –Assets.
Advertisements

Bodnar/Hopwood AIS 7th Ed1 Chapter 5 u TRANSACTION PROCESSING AND INTERNAL CONTROL PROCESS.
Analyzing and Recording Transactions Last Revised: 3/1/2011
Accounting for Transactions and the Financial Statements
Financial and Managerial Accounting Wild, Shaw, and Chiappetta Fifth Edition Wild, Shaw, and Chiappetta Fifth Edition McGraw-Hill/Irwin Copyright © 2013.
Overview of Transaction Processing and Enterprise Resource Planning Systems Chapter 2.
Dr. Mohamed A. Hamada Lecturer of Accounting Information Systems
Financial Accounting Review McGraw-Hill/Irwin © 2009 The McGraw-Hill Companies, Inc.
Auditing Concepts.
Learning Objectives LO1 Distinguish between management and auditor’s responsibilities regarding an auditee organization’s internal controls. LO2 Explain.
1 © Copyright Doug Hillman 2000 Internal Control and Cash.
Completing the Accounting Cycle
Standar Pekerjaan Lapangan: Pemahaman Memadai atas Pengendalian Intern Pertemuan 5.
Chapter 4 Internal Control Bus 319 Accounting Information Systems.
IDENTIFYING RISKS AND CONTROLS IN BUSINESS PROCESS
Accounting 211 – Chapter 2 The Recording Process
Financial Accounting, Sixth Edition
ACCOUNTING = INFORMATION. ACCOUNTING RECORDING ECONOMIC INFORMATION ABOUT A BUSINESS ENTITY THAT WE CLASSIFY, SUMMARIZE, AND CONVEY TO INTERESTED PARTIES.
Sarbanes-Oxley Project Summary of COSO Framework Presented by Larry Dillehay & Scott Reitan Parkfield Group LLC.
© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Chapter 2 Analyzing and Recording Business Transactions.
ACCT 201 WEEK 4 Completing the Accounting Cycle
Transaction Processing and the Internal Control Process Small Business Information Systems Professor Barry Floyd.
Chapter 3-1 The Accounting Information System Information System Accounting, Third Edition.
Fraud, Internal Control, and Cash
4 - 1 ©2002 Prentice Hall, Inc. Business Publishing Accounting, 5/E Horngren/Harrison/Bamber Completing the Accounting Cycle Chapter 4.
Chapter 07 Internal Control McGraw-Hill/IrwinCopyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Chapter 5 Internal Control over Financial Reporting
Internal Control in a Financial Statement Audit
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 4 – 1 Transaction Processing and the Internal Control.
Analyzing and Recording Transactions Pr. SAMLAL Zoubida.
Accounting Principles, Eighth Edition
LESSON 4-1 Preparing a Chart of Accounts
Learning Objectives LO5 Illustrate how business risk analysis is used to assess the risk of material misstatement at the financial statement level and.
Acct Systems Instructor: Glenn McGuigan
Evaluation of Internal Control System
Fundamentals I: Accounting Information Systems McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
Posting from a General Journal to a General Ledger Accounting I Chapter 4, Section 1.
12-1 Chapter Twelve Financial Considerations Chapter learning objectives 12.1 Appreciate the potential benefits of accounting and financial analysis.
McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 6-1 Chapter 6 CHAPTER 6 INTERNAL CONTROL IN A FINANCIAL STATEMENT AUDIT.
ACTG 3110 Chapter 3 – The Accounting Information System.
PREPARING A CHART OF ACCOUNTS LESSON 4-1. GENERAL JOURNAL (CHAPTER 3) What does a General Journal accomplish in Accounting? What is a General Journal?
Auditing Internal Control Studies & Risk Assessment Chapter 9 Internal Control Studies & Risk Assessment Chapter 9.
Copyright © 2007 Pearson Education Canada 23-1 Chapter 23: Using Advanced Skills.
Financial and Managerial Accounting Wild, Shaw, and Chiappetta Fourth Edition Wild, Shaw, and Chiappetta Fourth Edition McGraw-Hill/Irwin Copyright © 2011.
Lead Black Slide. © 2001 Business & Information Systems 2/e2 Chapter 2 Business Fundamentals.
Financial Accounting Fundamentals John J. Wild Fourth Edition John J. Wild Fourth Edition McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies,
ADJUSTED TRIAL BALANCE
Financial Accounting. Accounting Measures Processes Communicates…… Financial information to decision makers.
Financial Accounting John J. Wild Seventh Edition John J. Wild Seventh Edition Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction.
Copyright © 2016 by McGraw-Hill Education Chapter 5 Fraud, Internal Control, and Cash PowerPoint Author: Brandy Mackintosh, CA.
Presented by: Mr. Raziq Chapter 2 Accounting Concepts and Elements Slide 2.1.
Chapter 3-1. Chapter 3-2 The Accounting Information System Information System Financial Accounting, Fifth Edition.
Financial and Managerial Accounting
Financial Accounting, IFRS Edition
Auditing Concepts.
CHAPTER2 The Recording Process. CHAPTER2 The Recording Process.
ACCT 201 FINANCIAL REPORTING Chapter 2
Processing Accounting Information
ANALYZING AND RECORDING TRANSACTIONS
THE RECORDING PROCESS -POSTING
Accounting, Fifth Edition
Certified General Accountants
Accounting, Fifth Edition
The Accounting Cycle  The steps in the accounting process covered in a fiscal period. Analyze and record business transactions Post transactions to the.
Financial Accounting, Sixth Edition
Accounting Review for Managerial Accounting Students
Internal Control Internal control is the process designed and affected by owners, management, and other personnel. It is implemented to address business.
Accounting Information Systems and Business Processes - Part I
Received $50,000 cash from the issue of common stock.
Presentation transcript:

Presented by: Mr. Raziq Chapter 3 Accounting Systems and Internal Control Slide 3.1

Presented by: Mr. Raziq Chapter 3 Learning Objectives Define an accounting system and identify its principal elements. Briefly describe how an accounting system is used to record accounting data for a business each accounting period. Identify the key components of internal control. Identify the principal differences between manual and computer-based processing of accounting data and the related internal control implications. Discuss recent trends in computer processing and the related implications for organizations’ accounting and control functions. Identify internal control issues stemming from the growing trend toward multinational business operations. Slide 3.2

Presented by: Mr. Raziq What is a “system? “ A coordinated network of plans and procedures designed to achieve a stated goal in an orderly, effective, and efficient manner.” Slide 3.3

Presented by: Mr. Raziq Okay, what is an “accounting system”? “A systematic approach to collecting, processing, and communicating financial information to decision makers.” Slide 3.4

Presented by: Mr. Raziq Principal Elements of an Accounting System Accounts Chart of accounts Journals and ledgers The accounting cycle Slide 3.5

Presented by: Mr. Raziq Accounts The basic storage units for financial data in an accounting system. Cash 4, Cash” balance”? $3,800 Slide 3.6

Presented by: Mr. Raziq Chart of accounts: An address book for a company’s accounts 101. Cash 102. Accounts Receivable 103. Supplies Accounts Payable Common Stock Rental Revenue 402. Interest Revenue Salaries Expense 502. Utilities Expense Slide 3.7

Presented by: Mr. Raziq Journals and Ledgers: The Accounting “Books” General journal: the accounting record in which the dollar amounts for transactions and other financial events are initially recorded by businesses that maintain only one journal. General ledger: the accounting record that contains each of the individual accounts for a business’s assets, liabilities, owners’ or stockholders’ equity, revenues, and expenses. Slide 3.8

Presented by: Mr. Raziq The accounting cycle: the set of recurring accounting procedures that must be performed for a business each accounting period. Slide 3.9 Task Accounting Activity Record financial data Journalize transactions Collate financial data Post transations to the general ledger Organize account Prepare trial balance balances Consolidate and Prepare financial classify account statements balances

Presented by: Mr. Raziq Internal Control for Business Organizations An accounting system is one element of a larger system that business executives use to maintain effective control over their organizations. Slide 3.10

Presented by: Mr. Raziq Internal control is a process-- effected by an entity’s board of directors, management, and other personnel-- designed to provide reasonable assurance that key entity objectives will be accomplished. Slide 3.11

Presented by: Mr. Raziq Key Components of Internal Control Slide 3.12 Accounting system Control environment: the degree of control consciousness within an organization Control activities: the policies and procedures established to help ensure that an entity’s primary organizational objectives are accomplished

Presented by: Mr. Raziq Examples of Control Activities vSegregation of key functional responsibilities vProper authorization of transactions vUse of prenumbered accounting documents vPeriodic counts of inventory vClerical tests vPeriodic reconciliations Slide 3.13

Presented by: Mr. Raziq Key Duties that Should Be Segregated in an Accounting System Authorization RecordkeepingCustodianship Slide 3.14

Presented by: Mr. Raziq Internal Control and Computer Processing Businesses, large and small, can benefit significantly by integrating computer processing into their accounting and control functions. Slide 3.15

Presented by: Mr. Raziq Computer Processing and Internal Control Implications 4Uniformity in the processing of transactions 4Initiation and execution of transactions 4Existence of transaction trails 4Ability to segregate key functional responsibilities 4Potential for errors 4Monitoring capability of management Slide 3.16

Presented by: Mr. Raziq Examples of Control Activities in Computer-based Accounting Systems oMaintain back-up copies of key computer programs oPeriodically process “test” transactions oData input controls oLimit access to computers oEstablish procedures to identify parties accessing and operating each computer oLimit access to key data files and computer programs Slide 3.17

Presented by: Mr. Raziq Two Key Trends in Information Processing Technology... and Their Implications for Accountants Outsourcing of information systems Electronic data interchange (EDI) Slide 3.18

Presented by: Mr. Raziq Internal Control: An International (Multinational) Perspective Recent years have seen a dramatic increase in multinational business operations This trend poses significant challenges for accountants Among these challenges is designing an internal control process for a business organization that cuts across several cultures Slide 3.19

Presented by: Mr. Raziq The Foreign Corrupt Practices Act of 1977 has Important Implications for U.S. Companies *Prohibits payments of bribes and related inducements to establish/maintain business relationships in foreign countries *Requires all public companies to establish internal controls that have a high likelihood of preventing and detecting bribes and similar payments Slide 3.20