Report on computer based accounting package - Free Essay Example

Sample details Pages: 5 Words: 1574 Downloads: 7 Date added: 2017/06/26 Category IT Essay Type Analytical essay Did you like this example? This report details the results of a study commissioned by the Board on 1 November 2010. We were asked to explain how a computer based accounting package is organised, identify the advantages and disadvantages of a computerised package compared to a manual accounting system and to discuss the way in which such a package maintains control over systems. II METHODS The following study procedures were adopted: Review of relevant literatures on computer based accounting and accounting information system III FINDINGS 1. How a Computer Based Accounting Package Is Organised. A computer based accounting package is software that carries out your bookkeeping process by receiving data input of your day to day transactions and transforming this data into financial records of your business transactions. This package will then produce a statement at the end of your fiscal year which will provide financial information about the company and conveys its financial position to the stakeholders of the company. There are various types of computer based accounting packages available. Some of the common ones used by most organisations according to Elikai, Ivancevich M. and Ivancevich H. (2007) are: QuickBooks SAP PeopleSoft Oracle ADP Great Plains JD Edwards Peachtree Computer based accounting package can be organized in two ways. Client-Server or Single User Set-up Client Server Network A client is an algorithm, software, which is also a front end program (Kamal, 2002). Front-end is composed of user-based applications. Theres another computer or an embedded system, known as the back end, which are composed of back end databases and application utilities for the front end program. A server is a program, called back end program. Back end refers to a computer that connects to one or multiple clients (Kamal, 2002). It has a large amount of databases and application which provide software and utilities to c lients. Therefore, Client-Server network is composed of both front-end and back-end application. It is a network consisting of a server and a number of clients, whether remote or local. This is for a network or complex environment. Figure 1. Client Server Network Example Source: Kamal, 2002 As seen in figure 1, a network interconnects a client and server software on the same or different systems. A server will have embedded programs for things such security, verification and transaction management. Single User Set-up Basically this refers to a single software system and database. It carries out similar functions but it serves a single user only. This is simply a single computer that stores both the data and executes the application. This is usually for home users or small offices whereby there is only one accountant, in other words, a simple environment. Figure 2. Accounting cycle Source: Celender, 2010 Accounting packages follows the same accounting cycle as illustrated in Figure 2. It begins from recording journal entries, classifying into individual ledger accounts, summarizing in the operating and financial reports such as trading account and balance sheet, and interpreting through its decision support system. Information Users Data Information communication Data Collection Data Processing File Update Figure 3. Data Processing Cycle Source: BPP Professional Education Staff, 2007. Accounting package follows a data processing cycle, illustrated in figure 3. a) Data is collected a system/procedure for ensuring all data needed is collected and made available for processing. b) Process data into information by summarizing, classifying and analysing. c) Updated files bringing files up to date to record current transactions. d) Communicated information statements and reports to users. C:UsersSubaPicturesMP Navigator EX2010_11_19IMG.jpg Figure 4. Accounting Package Integration Source: B assett, 1996 Figure 4 shows a simple overview of how an accounting package such as Sage, integrate with each other and the types of end output obtained. Basically, transactions such as purchasing, sales, payroll, expenses and acquisition of non-current assets will be recorded into nominal ledgers through the input of receipt vouchers/invoices, payment vouchers, journal vouchers and cash book entry by users. Once these inputs are processed the end output for each transaction will be produced. Data compiled in the nominal ledgers will be used to produce the financial statements which will be used by stakeholders of the organisation. For further understanding, lets review the 2 main transactions of an organisation; revenue and purchase cycle. The Revenue Cycle Figure 5. Sales Order Procedure Source: Hall, 2008 Sales order procedure includes: Receiving and processing customer orders -receipt of customers order on type and quantity of product wanted. -run credit c heck on customer before further processing. Filing the orders -receive order activity forwards stock release document to the pick good functions in the warehouse. -order is then verified and verified stock release document will be forwarded to the ship goods task. -warehouse staff will adjust stock records according to inventory reduction Shipping products to customers -shipping department will receive packing slip and shipping notice from receive order function. -packing slip will be send with goods to customer. -shipping notice will be forwarded to billing function. -before shipping, clerk will reconcile the physical items with these documents and stock release document from warehouse. -bill of lading will be raised. Billing customers on time -upon receipt, item shipped are reconciled with sales order. -necessary details such as tax, freight charge, are added to the sales order. -sales invoice will be raised and sent to customer. Accoun ting the transactions -record invoice details to sales journal. -update accounts receivable. -post to general ledger. The relationships between all this tasks are shown in figure 5. The Purchasing Cycle Figure 6. Purchasing Process Source: Gelinas and Dull, 2009 The purchasing process (Figure 6) shows the process responds to request for goods received from the inventory process and from various departments. A purchase order will be send to the vendor and various notices to other department and processes. Vendor will send goods with packing slip, resulting addition notices being send out. 2. Advantages and disadvantages Both computerised and manual accounting has their own advantages and disadvantages. Lets review the advantages a computerised accounting package has against manual accounting. Advantages Disadvantages 1. Efficiency and speed in computing the financial statements. 2. Multiple accounting steps are done in one entry. 3. Financial statements can be created at any time and as often as needed. 4. Mobility of reporting to stakeholders at any place and any time. 5. Reliability of information produce as it can be considered true and fair. 6. No routine work are carried out to input data into the system. 7. Increased accuracy by reducing human error and system being able to counter check by itself. 8. Internal control system of increased productivity. 9. Easy back up and restoration of records made available by the software. 10. Numerous accountants can be working on the books at the same time. 11. Unbalanced journal entries cannot be posted which allows accountant to realize and correct the mistake. 1. Expensive to purchase such software package. 2. High costs on developing, introducing and using the system such as the subscription fees and renewal fees that are required annually. 3. Special trainings for personnel needed which increases human resource cost. 4. Dependence on machines might lead to human resource deficiency. 5. Risk of exposure to virus/hacking as the softwares are used on computers that are constantly online. 6. Degree of thrust without review thats placed on generated information can be a major risk if the software malfunctions and produces improper information. Table 1. Sources: Elmaleh, 2007; Weber, 2010; Weygandt, Kimmel Kieso, 2010 3. Discussion on the ways such accounting package maintains control over systems. Output Controls Input Controls Process Controls Figure 8. There are two main controls over systems which are internal and external control. According to Boczko (2007), the internal control consists of: a) Detective control Are controls that detect errors or irregularities that may have occurred by preparing monthly trial balances, reviewing policy procedures, having stock counts, carrying out monthly bank reconciliatio ns and carrying out internal audits periodically. b) Corrective control Are controls that correct errors or irregularities that have been detected by creating backup copies of the master files, complying with data protection policies, using sufficient data to produce information and processing the corrective procedures with proper manner. c) Preventive control Are controls that keep errors or irregularities from occurring in the first place. To do so, management duties are segregated, official documents are used for filing, proper authorisation procedures are carried out, a proper control method is created to prevent unwanted access to the resources of a firm and standard or policies defined by authorities should be obliged. c) Systems security Are security features e.g. passwords, in the software that prevents unwanted breaches such as unauthorised access to the accounts, unauthorised use of organisations resources, improper deletion or alteration of information w ithout proper approval, processing interruptions and system failure due to external factors. d) Other controls Other application controls are as stated: i. only authorised data are processed by the system. ii. processing procedure must be efficient, effective, appropriate, accurate and completed. iii. processing process is carried out securely. iv. secured systems specific processing procedures are carried out. v. systems specific processing errors are identified and corrected. IV CONCLUSIONS Computer based accounting packages are organised in two ways which are Client-Server or Single User Set-up. Both computerised and manual accounting have their own advantages and disadvantages but its clear that computerised accounting holds more advantages as it is a modern era and technology play a significant role in organisations now. By using computer based accounting packages, proper control over the systems which are security, preventive, detective and correctiv e controls, are executed. Overall, it is recommended that computer based accounting packages be used as it is the most efficient and reasonable method to carry out accounting in organisations. Subagheeta Subramaniam, Accounting Consultant. Don’t waste time! Our writers will create an original "Report on computer based accounting package" essay for you Create order

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Work Place Ethical Dilemma Free Essays

Work place Ethical Dilemma Brenda Paz BSHS-331 August 25, 2010 Roberto Vara Jr. Work place Ethical Dilemma According to Freeman, S. (2000) Ethics: An introduction to philosophy and practice ethical dilemma is a complex situation that will involve conflicts between moral imperatives. We will write a custom essay sample on Work Place Ethical Dilemma or any similar topic only for you Order Now This is also called ethical paradox which plays a central role in ethics debates. We are not animals and thus should not act and behave like animals. All humans have social acceptable behaviors we must abide from. Standards we all follow to what we believe, having our own opinions, from obeying the law and knowing what is morally right and wrong. For example the ethical admonition to â€Å"treat others as you would like to be treated† is not always easy to follow especially if the individual you should treat with respect does not in turn respect you. This is an example of ethical decision clashing. About three years ago I experienced an ethical dilemma in the workplace which made me feel puzzled, unappreciated and even confused for just doing and following procedure and protocol to my work responsibilities which my job duties required me to do. I worked for a nonprofit organization which helped advocate for individuals with disabilities and their families. My job title was that of a project assistant of a youth group which empowers young adults with disabilities gather the tools necessary to live a more independent and healthier way of life. The problem to the dilemma consisted in nepotism taking place by my immediate supervisor. The organization I worked for was just a small branch which was extended from the main office which was located in Albuquerque, NM. I did not have another immediate supervisor to question any such ethical dilemmas. Each year our project needed to provide accountability of ten new additional youth members to the group. Membership to the group required the creation and development of a goals and dream planning map. Once the member reached three months of attendance to monthly meetings the individual was then issued a stipend of five hundred dollars to assist in reaching such set goal in the plan. As a project assistant one of my job responsibilities was to locate youth with disabilities and invite them to become part of the group. Part of our initial protocol was not to use the stipend as the initial incentive to join the group but rather to make the youth group more appealing by emphasizing social group gatherings, activities, advocacy and the initial growth of one’s self confidence and development in learning to advocate for themselves and others who cannot speak for themselves in front of congress. My supervisor however did not follow protocol and often selected individuals from her immediate social circle of friends and family members to join the youth group. Secondly those initial members were not required to meet the three month required time limit of monthly meeting attendance to acquire the stipend. One day I politely questioned her selection process and she quickly gave the explanation that she needed to meet the quota and had to sign up 10 youth members no matter who they were so the project would not loose funding. Yet when I confronted her about trying to sign up my son or family members with disabilities I was informed I could not because I worked for the organization. I was informed by her that she needed to bend the rules to meet quota but when I offered to help by suggesting to enroll individuals with disabilities from my social circle I was denied. I should have just dropped the issue right there and them, however I went on to question her actions and she abruptly stated† How dare you question me? Don’t try to undermine me Brenda†, then she just changed the conversation right away. Well, soon after that our work relationship was very shaky and when my employment contract ended I was not offered a new contract again. Based on what I learned since I began my study at the University of Phoenix and through my continued work experience I think I would have handled the situation in the same manner but I would have chosen my words differently. At the time I believe my questioning of her actions and the way I came about it was wrong in the sense that I was trying to fight fire with fire. I was trying to justify my possible actions and suggesting the same methods she was using to recruited my circle of members in the same manner. I now realize that you should not try to suggest justification of one’s actions by doing the same thing the other individual is doing. I needed to fight fire with water and in turn make her analyze her actions and view her ways in a cam and professional manner. Then if that did not work I should have escalated to the next level and called her supervisor in Albuquerque just as a note of information not an accusation. According to _________Ethics can be seen as both the highest and the lowest standards of practice expected of a practitioner, reflecting both the standards of the community and the profession. Codes, rather than being precise dictates, are actually combinations of rules and utilitatian principles that do not provide a rational as to why a particular behavior is right or wrong in a particular situation or circumstance. Therefore, many issues cannot be resolved solely by relying on codes of ethics. Practical judgment and informed conscious reasoning are necessary in the proper application of codes of ethics. Various professional organizations have established codes of ethics for their members however in similar professional, the codes of ethics and acceptable behavior can vary greatly. When faced with an ethical dilemma, a practioner would do well to think of the formal code of ethics of his/her profession and then through a formal ethical decision making process to expedite s sound solution. References Freeman, S. J. , (2000). Publication manual of the Wadsworth group, a division of Thomson Learning Inc. Ethics: An introduction to philosophy amp; practice Environmental Protection Agency Website, (2009), Publication research group of the Environmental Protection Agency. Retrieved from http:// www. epa. gov/progress/#i How to cite Work Place Ethical Dilemma, Papers