Acuña, Renz Mari March 11, 2017

BM3A

Reflection Paper

When I first found out that a subject called, “Cost and Internal Control (CIC)”, was in my
online registration card when I enrolled for the semester, I felt nervous because I assumed that
this subject was going to be a bit similar and connected to the Accounting subject; unfortunately,
I am not good at Accounting. Things came rushing through my mind like, “How would I be able
to handle another subject like Accounting again?” and “Is it going to be more difficult?” and etc.
However, when the semester finally started, and the discussion already took place on our second
meeting for CIC, I thought to myself that I will try my best to learn and understand this subject
no matter how hard will it be.

During our second meeting, our professor, Ms. Baritua, discussed and explained to us
some terms and tools about the Accounting Information System (AIS), I was managing to
understand this topic so far since Ms. Baritua told us that for the half of the semester, we will be
focusing more on terms first before the computation lessons. First, I learned the difference
between data and information whereas data are just raw facts about certain events; numbers are
one good example of a raw fact or data and on the other hand, information is a processed data
already which have complete meaning and organization. Then, I also learned about the
requisitions of a system which are the necessity to have a group of interrelated components,
relativity, and it must serve a common purpose. We even did an activity about this when our
professor asked us to form a group where one representative had a task of memorizing a list of
objects that are needed to win the activity and cooperate with her group mates to get these certain
objects. Our group can be compared like a system because we, the team, are the interrelated
components that worked together for we had a purpose to get success for the activity and the
activity is relative to the subject. I also learned the advantages of implementing internal control
on an organization which are to safeguard assets, to ensure effectiveness and efficiency of
operations, to see if the financial reporting in the company is reliable and timely, and also to
prevent errors, theft and fraud, lastly, to ensure compliance to regulatory laws. Additionally, the
components of internal control have been discussed as well such as “Control Environment”
which provides an organization setting that disciplines the employees and enhance their ethical
values. Second is “Risk Assessment” which helps identify, manage and solve the uncertain
problems that may occur in the organization. “Control Activities” is the third component
mentioned and it refers to the policies and procedures needed for an organization. Fourth
component is “Information and Communication” which enables the people working for an
organization to effectively communicate, even if they are from the top management, bottom
management and to the suppliers and customers. The last component is “Monitoring” which
includes evaluating the quality of the system’s performance over time and immediately reporting
any irregularities to determine opportunities for improvement in the future.

For our third meeting in CIC, we tackled the topic of documenting accounting
information systems. The concept which had been the main focus in the class was about creating
flow charts. As it has been defined, a flow chart is a graphical representation of a system that
describes the physical relationship between its key entities. It also makes it easier for the
organization to trace the physical flow of their documents. I learned that a flow chart should have
a title or label on it to identify what kind of system it represents. Also, there are symbols and
labels needed to make the flow chart and it must be correctly used to represent the relationship of
entities in the system. When Ms. Baritua gave us an exercise about flow charts, I was able to
follow and make the right flow chart for that certain exercise. Learning this topic helped me
understand the flow charts I encountered in some places like the hospital because I can see some
of their own flow charts as I went along the hallways, it might not be the exact same as we’ve
discussed in class but the symbols that we learned from class is a huge help already, because they
can also be applied to the symbols in flow charts which we might encounter outside school. In
addition to that, I learned that documentation is really important in an organization because it
helps in depicting how the new system works, training users, designing new systems, controlling
system development and maintenance costs, standardizing communication with others, auditing
AIS, documenting business processes, complying with regulatory requirements and lastly, to
establish accountability.

The topic of transaction Processing Systems (TPS) came next to the discussion on our
fourth meeting before having our quiz. TPS consists of three major subsystems which are the
expenditure cycle, conversion cycle, and revenue cycle. The first major subsystem, the
expenditure cycle, contains the acquisition of materials, property, and labor in exchange for cash,
the conversion cycle is for providing value added through a firm’s products or services by
planning, scheduling, and control of physical product through the manufacturing process and
monitoring the flow of cost information related to production, and the revenue cycle involves
processing cash sales, credit sales, and the receipt of cash following a credit sale, to attain these,
processes like shipping products, billing customers, recording transactions in accounts, collecting
cash and etc. are done within the company. The revenue cycle is the most important cycle for me
because of its purposes which are to keep track sales of goods/services to customers, fill
customer orders, maintain customer records, collect payment for goods and services, and forecast
sales and cash receipts. Source and product documents are also involved within the revenue
cycle such as sales invoice, remittance advice, customer billing statements, bad debts report,
accounts receivable aging report and many more. Since a company aims for success and
continuous progress, they need TPS. Without the major subsystems for TPS, maybe the
company’s system would not be able to exist or even fail because there would be no processes
and transaction that will undergo the system if the company does not implement TPS.

So far, I can say that this subject, Cost and Internal Control, is just a huge challenge for
me this semester. I am really learning about different concepts from the subject and I hope I
could do the same for the lessons after the midterms, specifically when we come to the topics
that involve computation and more analyzation like cost volume profit analysis and etc. Despite
this challenging subject, I am willing to learn more because it actually helps me enhance my
critical thinking skills and enables me to analyze more.