1. General Ledger and Reporting System
Chapter 16
General Ledger and Reporting System
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2. Learning Objectives
Describe the information processing operations required to update the general ledger and to produce reports for internal and external users.
Identify the major threats in general ledger and reporting activities and evaluate the adequacy of various control procedures for dealing with them.
Understand the implications of new IT developments, such as XBRL, and changes in external reporting requirements, such as IFRS, for the design and operation of the general ledger and reporting system.
Discuss how tools such as responsibility accounting, balanced scorecards, and graphs can be used to provide information managers need to effectively monitor performance.
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3. General Ledger and Reporting
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4. General Ledger and Reporting
Primary function is to collect and organize
The accounting cycle activities
Financing activities
Investing activities
Budget activities
Adjustments
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5. General Ledger and Reporting Activities
Update general ledger
Post adjusting entries
Prepare financial statements
Produce management reports
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6. General Ledger and Reporting General Threats
Inaccurate or invalid general ledger data
Unauthorized disclosure of financial statement
Loss or destruction of data
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7. General Ledger and Reporting General Controls
Data processing integrity controls
Restriction of access to general ledger
Review of all changes to general ledger data
Access controls
Encryption
Backup and disaster recovery procedures
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8. Update General Ledger Threats
Inaccurate updating of general ledger
Unauthorized journal entries
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9. Update General Ledger Controls
Data entry processing integrity controls
Reconciliations and control reports
Audit trail creation and review
Access controls
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10. Post Adjusting Entries Threats
Inaccurate adjusting entries
Unauthorized adjusting entries
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11. Post Adjusting Entries Controls
Data entry processing integrity controls
Spreadsheet error protection controls
Standard adjusting entries
Reconciliations and control reports
Audit trail creation and review
Access controls
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12. Prepare Financial Statement Threats
Inaccurate financial statements
Fraudulent financial reporting
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13. Prepare Financial Statement Controls
Processing integrity controls
Use of packaged software
Training and experience in applying IFRS and XBRL
Audits
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14. eXtensible Business Reporting Language (XBRL)
Without
With
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15. XBRL Instance Document Taxonomy Linkbases
Contains data from financial statements
Marked up or tagged with data describing the data
Each piece of data in XBRL is an element
Taxonomy
Set of files defining the various elements and the relationships between them
A schema
Contains the definitions of every element that could appear in an instance document
Linkbases
Describes relationships between elements
Reference
Identifies relevant authoritative pronouncements
Calculation
Specifies how to combine elements
Presentation
How to group elements
Label
Associates human-readable labels with elements
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16. Produce Management Reports Threats
Poorly designed reports and graphs
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17. Produce Management Report Controls
Responsibility accounting
Balanced scorecard
Training on proper graph design
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18. Balanced Scorecard
A report that provides a multidimensional perspective of organizational performance
Reflecting four perspectives of the organization
Financial
Customer
Internal operations
Innovation and learning
Showing goals and measures
Targets
Actual
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