Accounting information system an overview 9e bodnar hopwood chapter 06

Electronic Data Processing Systems Chapter  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6–1 Learning Objective Describe how application controls are used in data processing systems to ensure accuracy and integrity  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6–2 Paper-Based Input System In some computerized accounting systems, inputs to the system are based on handwritten or typed source documents These documents are then collected and forwarded to computer operations for error checking and processing  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6–3 Preparation and Completion of the Source Document The source document, such as sales orders, are prepared manually Errors can be minimized if the source document is well designed and easy to understand  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6–4 Transfer of Source Documents to Data Processing Batch control totals and data transfer registers controls data transfers User’s departments Data processing  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6–5 Transfer of Source Documents to Data Processing Document counts are a simple form of batch control Batch totals may be taken for all or several numeric fields in the original data file  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6–6 Transfer of Source Documents to Data Processing Data entry Key verification Visual verification Program data editing  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6–7 Program Data Editing Techniques Data editing routines may be applied to each of the basic data structures Character Fields Records Files  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6–8 Program Data Editing Techniques What is a table lookup? It is an editing program that compares the value of a field to the acceptable values contained in a table file  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6–9 Program Data Editing Techniques Limit test Continuous operations auditing Check digit Valid code check  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– Cash Receipts Application Cash Remittance Processing (Daily) Post office A Open item accounts receivable Check remittances Cash receipts total Check endorsement Deposit slip D Data entry B Activity file  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood C 6– Cash Receipts Application Cash Remittance Processing (Daily) D D Deposit register Bank summary file Data entry Reconcile Cash summary report D Review and sign Cash summary report  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– Paperless Processing Systems Batch processing Real-time or online real-time processing  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– Paperless Processing Systems The main difference between paperless and paper-based batch processing systems is that journal vouchers are replaced by their electronic equivalents, and the general ledger is updated automatically in period batch runs  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– Paperless Processing Systems A primary advantage of paperless systems is that they make possible real-time processing The processing of individual transactions as opposed to groups of transactions is called immediate, direct, or real-time processing  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– Paperless Processing Systems Online, real-time systems (OLRS) process transactions immediately after they are input These systems can provide immediate output to users What are some types of real-time processing in OLRS?  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– Paperless Processing Systems Inquiry/response systems Data entry systems File processing systems Full processing systems (transaction processing systems)  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– Paperless Processing Systems Relative disadvantages of OLRS are:  increased costs and complexity of systems operations  sensitivity to hardware and software errors  they are more susceptible to processing errors that arise from erroneous or fraudulent inputs  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– Real-Time Sales System These systems utilize contemporary information technology to maximize system performance POS (Point-of-Sale) system Bar coding for automatic identification EDI (Electronic Data Interchange) ordering system  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– Real-Time Point-of-Sale System Sales Customer input via Web browser Inventory Accounts receivable General ledger Sales slips Processor POS terminals Reports Internet Other terminals Reports  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– Transaction Processing in Real-Time Sales Systems Vendor send customer electronic catalog forecast customer’s sales order receive and translate incoming order EDI Retailer > <  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– Transaction Processing in Real-Time Sales Systems Vendor send acknowledgement send order to inventory or production transmit advance shipping notice ship goods EDI Retailer > >  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– The Output System The output system can be paper-based, paperless, or something in between Most paper-based, batch-oriented systems with sequential file processing produce very large volumes of output Online, real-time paperless systems tend to produce very little output  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– The Output System Output controls are designed to check that processing results in valid output and that outputs are properly distributed A separate EDP control group is often established to monitor EDP operations Typically, an output distribution register is maintained to control the disposition of reports  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 6– End of Chapter  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood – 52 ... processing systems to ensure accuracy and integrity  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/ Hopwood 6–2 Paper-Based Input System In some computerized accounting. .. and data transfer registers controls data transfers User’s departments Data processing  2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/ Hopwood 6–5 Transfer... Business Publishing, Accounting Information Systems, 9/e, by Bodnar/ Hopwood 6– Paperless Input Systems In paperless input systems, sometimes called online input systems, transactions are input