Académique Documents
Professionnel Documents
Culture Documents
ECTURE 12
Romney/Steinbart
1 of 101
INTRODUCTION
The general ledger and reporting system (GLARS) includes the processes in place to update general ledger accounts and prepare reports that summarize results of the organizations activities.
Romney/Steinbart
2 of 101
INTRODUCTION
One of the primary functions of GLARS is to collect and organize data from:
Each of the accounting cycle subsystems, which provide summary entries related to the routine activities in those cycles. The treasurer, who provides entries with respect to non-routine activities such as transactions with creditors and investors. The budget department, which provides budget numbers. The controller, who provides adjusting entries.
2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart 3 of 101
INTRODUCTION
The information must be organized to meet the needs of internal and external users. The system must be designed to produce regular periodic reports and to support real-time inquiries.
Romney/Steinbart
4 of 101
GENERAL LEDGER AND REPORTING SYSTEM The basic activities in the GLARS are:
Update the general ledger Post adjusting entries Prepare financial statements Produce managerial reports
The first three represent the basic steps in the accounting cycle.
Romney/Steinbart
5 of 101
GENERAL LEDGER AND REPORTING SYSTEM The basic activities in the GLARS are:
Update the general ledger Post adjusting entries Prepare financial statements Produce managerial reports
The first three represent the basic steps in the accounting cycle.
Romney/Steinbart
6 of 101
Romney/Steinbart
8 of 101
GENERAL LEDGER AND REPORTING SYSTEM The basic activities in the GLARS are:
Update the general ledger Post adjusting entries Prepare financial statements Produce managerial reports
The first three represent the basic steps in the accounting cycle.
Romney/Steinbart
9 of 101
Romney/Steinbart
11 of 101
Romney/Steinbart
12 of 101
Romney/Steinbart
13 of 101
Romney/Steinbart
15 of 101
GENERAL LEDGER AND REPORTING SYSTEM The basic activities in the GLARS are:
Update the general ledger Post adjusting entries Prepare financial statements Produce managerial reports
The first three represent the basic steps in the accounting cycle.
Romney/Steinbart
17 of 101
PREPARE FINANCIAL STATEMENTS Activities in the preparation of financial statements are as follows:
Prepare an income statement
The income statement is prepared using the balances in the revenue, expense, gain, and loss accounts listed on the adjusted trial balance.
Romney/Steinbart
18 of 101
PREPARE FINANCIAL STATEMENTS Activities in the preparation of financial statements are as follows:
Prepare an income statement Prepare closing entries
After preparation of the income statement, the revenue, expense, gain, and loss accounts are closed. Their balances are transferred to retained earnings, so that this account will have the correct ending balance. If a separate account is kept for dividends, that account is also closed to retained earnings. Most companies perform monthly and annual closes.
Accounting Information Systems, 11/e Romney/Steinbart 19 of 101
PREPARE FINANCIAL STATEMENTS Activities in the preparation of financial statements are as follows:
Prepare an income statement Prepare closing entries Prepare a statement of stockholders equity
Reconciles the changes in the stockholders equity accounts (paidin capital and retained earnings) for the year.
Romney/Steinbart
20 of 101
PREPARE FINANCIAL STATEMENTS Activities in the preparation of financial statements are as follows:
Prepare an income statement Prepare closing entries Prepare a statement of stockholders equity Prepare a balance sheet
Presents the balances in the permanent accounts:
Assets Liabilities Owners Equity
Romney/Steinbart
21 of 101
PREPARE FINANCIAL STATEMENTS Activities in the preparation of financial statements are as follows:
Presents changes in cash for the Prepare an income statement period categorized by: Prepare closing entries Operating activities Prepare a statement of Investing activities equity stockholders Financing activities Prepare a balance sheet Prepare a statement of cash flows
Romney/Steinbart
22 of 101
GENERAL LEDGER AND REPORTING SYSTEM The basic activities in the GLARS are:
Update the general ledger Post adjusting entries Prepare financial statements Produce managerial reports
The first three represent the basic steps in the accounting cycle.
Romney/Steinbart
23 of 101
Romney/Steinbart
24 of 101
Romney/Steinbart
25 of 101
Romney/Steinbart
26 of 101
Romney/Steinbart
28 of 101
Romney/Steinbart
29 of 101
Romney/Steinbart
30 of 101
Romney/Steinbart
31 of 101
Romney/Steinbart
32 of 101
Examples: Plants, divisions, and other autonomous operating units. Provide calculations of return on investment.
2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart 34 of 101
Romney/Steinbart
35 of 101
Romney/Steinbart
37 of 101
(200,000) (120,000)
(200,000) (144,000)
(205,000) $ (141,600) $
(5,000) 2,400
8,000 6,000
Romney/Steinbart
38 of 101
Major software vendors are developing tools to automatically generate XBRL codes so accountants wont need to write code.
2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart 40 of 101
XBRL: REVOLUTIONIZING THE REPORTING PROCESS XBRL provides two major benefits:
Organizations can publish their financial statements on time in a format that anyone can use. Recipients will no longer need to manually reenter data they acquired electronically so that decision support tools can analyze them.
Means search for data on the Internet will be more efficient and accurate.
Romney/Steinbart
41 of 101
XBRL: REVOLUTIONIZING THE REPORTING PROCESS The power of XBRLXBRL apply toprovided Benefits of lies in the information exchanging by its tags. XBRL taxonomies define what those tags financial information both externally and represent. There are two basic types of taxonomies. internally. 1) Financial reporting taxonomies, which have been developed for different industries and countries, XBRL provides like accounts payable, define summary measuresa great example of how inventory, and accounts receivable that appear in accountants can actively participate in IT financial statements and reports. 2) XBRL-GL development, since the accounting taxonomy (the GL stands for "global ledger") defines the underlying data elements in an the AIS, thereby profession spearheaded its development. tagging each individual piece of business data prior
to its aggregation in reports.
Romney/Steinbart
42 of 101
Romney/Steinbart
44 of 101
Romney/Steinbart
45 of 101
Romney/Steinbart
46 of 101
THREAT 1: Errors in updating the general ledger a THREAT 2: Financial statement fraud THREAT 3: Loss, alteration, or unauthorized disclo THREAT 4: Poor performance
You can click on any of the threats above to get more information on:
The types of problems posed by each threat. The controls that can mitigate the threats.
2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart 47 of 101
Controls:
Input edit and processing controls.
Checking that the summary journal entries from the accounting cycles represent activity for the most recent time period.
Romney/Steinbart
48 of 101
Romney/Steinbart
51 of 101
Controls:
Independent testing of all manual journal entries to the general ledger.
Return to Return to Threat Menu Threat Menu
2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
Controls:
Backup and recovery procedures:
At least one backup of general ledger on site and one offsite. Disaster recovery plan should be developed and practiced.
All disks and tapes should have external and internal file labels to reduce chance of accidentally erasing important data.
2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart 54 of 101
Default settings on ERP systems usually allow users far too much access to data, so these systems must be modified to enforce proper segregation of duties.
Romney/Steinbart
55 of 101
Controls:
Prepare and review performance reports. Implement XBRL. Redesign business processes.
Return to Return to Threat Menu Threat Menu
2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
SUPPORTING MANAGEMENTS INFORMATION NEEDS Three tools or abilities can be particularly useful to management in decision making:
The balanced scorecard Data warehouses Proper design of graphs of financial data
Romney/Steinbart
58 of 101
SUPPORTING MANAGEMENTS INFORMATION NEEDS Three tools or abilities can be particularly useful to management in decision making:
The balanced scorecard Data warehouses Proper design of graphs of financial data
Romney/Steinbart
59 of 101
It provides a more comprehensive overview of organizational performance than financial measures alone. Properly designed, it measures key aspects of the organizations strategy and reflects important causal links.
2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart 61 of 101
Romney/Steinbart
62 of 101
Romney/Steinbart
64 of 101
Romney/Steinbart
65 of 101
95 20%
93 20%
92 18%
2% 10.4
3% 10.5
5% 11.2
Innovation & Learning New products # new products Employee learning % attending training
2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e
2 10%
2 25%
1 9%
66 of 101
Romney/Steinbart
Romney/Steinbart
68 of 101
SUPPORTING MANAGEMENTS INFORMATION NEEDS Three tools or abilities can be particularly useful to management in decision making:
The balanced scorecard Data warehouses Proper design of graphs of financial data
Romney/Steinbart
69 of 101
Romney/Steinbart
71 of 101
Dimension Table Dimension Table Location ID Location Name Budget Storage Capacity State Region Country Address Item Number Item Name Description Category Subcategory Dimension Table Buyer Number Buyer Name Department Division City State Region Country
Fact Table Location ID Item Number Buyer Number Supplier Number Time Period Dollar Purchases Unit Purchases
Dimension Table Time Period Date Month Year Quarter Fiscal Year Day
Dimension Table Supplier Number Supplier Name Industry Category Subcategory State Region Country Address
73 of 101
At the center of the star is a single fact table that represents the most important variable of interest.
Accounting Information Systems, 11/e
Romney/Steinbart
Dimension Table Dimension Table Location ID Location Name Budget Storage Capacity State Region Country Address Item Number Item Name Description Category Subcategory Dimension Table Buyer Number Buyer Name Department Division City State Region Country
Fact Table Location ID Item Number Buyer Number Supplier Number Time Period Dollar purchases Unit purchases
Dimension Table Time Period Date Month Year Quarter Fiscal Year Day
Dimension Table Supplier Number Supplier Name Industry Category Subcategory State Region Country Address
74 of 101
The fact table contains multiple views or measures of a variable and a number of foreign keys that link it to the factors that influence it.
Accounting Information Systems, 11/e
Romney/Steinbart
Dimension Table Dimension Table Location ID Location Name Budget Storage Capacity State Region Country Address Item Number Item Name Description Category Subcategory Dimension Table Buyer Number Buyer Name Department Division City State Region Country
Fact Table Location ID Item Number Buyer Number Supplier Number Time Period Dollar Purchases Unit Purchases
Dimension Table Time Period Date Month Year Quarter Fiscal Year Day
Dimension Table Supplier Number Supplier Name Industry Category Subcategory State Region Country Address
75 of 101
This fact table contains info on purchases of raw materials in units and dollars.
Accounting Information Systems, 11/e
Romney/Steinbart
Dimension Table Dimension Table Location ID Location Name Budget Storage Capacity State Region Country Address Item Number Item Name Description Category Subcategory Dimension Table Buyer Number Buyer Name Department Division City State Region Country
Fact Table Location ID Item Number Buyer Number Supplier Number Time Period Dollar Purchases Unit Purchases
Dimension Table Time Period Date Month Year Quarter Fiscal Year Day
Dimension Table Supplier Number Supplier Name Industry Category Subcategory State Region Country Address
76 of 101
Relevant dimensions include location of storage, item, purchasing agent, department, supplier, and time period (in red). 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart
Dimension Table Dimension Table Location ID Location Name Budget Storage Capacity State Region Country Address Item Number Item Name Description Category Subcategory Dimension Table Buyer Number Buyer Name Department Division City State Region Country
Fact Table Location ID Item Number Buyer Number Supplier Number Time Period Dollar Purchases Unit Purchases
Dimension Table Time Period Date Month Year Quarter Fiscal Year Day
Dimension Table Supplier Number Supplier Name Industry Category Subcategory State Region Country Address
77 of 101
Data warehouses consist of many starsone for each important set of data.
Accounting Information Systems, 11/e
Romney/Steinbart
USING DATA WAREHOUSES FOR BUSINESS INTELLIGENCE Business intelligence is the process of accessing data in a warehouse and using it for strategic decision making. Two basic techniques:
Online analytical processing (OLAP)
The user employs queries to investigate hypothesized relationships in the data. Can drill down to deeper levels with each query.
Romney/Steinbart
78 of 101
USING DATA WAREHOUSES FOR BUSINESS INTELLIGENCE Business intelligence is the process of accessing data in a warehouse and using it for strategic decision making. Two basic techniques:
Online analytical processing (OLAP) Data mining
Uses sophisticated statistical analysis and artificial intelligence techniques such as neural networks to discover unhypothesized relationships in the data. Lets just dig and see what we find!
Romney/Steinbart
79 of 101
SUPPORTING MANAGEMENTS INFORMATION NEEDS Three tools or abilities can be particularly useful to management in decision making:
The balanced scorecard Data warehouses Proper design of graphs of financial data
Romney/Steinbart
81 of 101
Romney/Steinbart
83 of 101
601
603
610
605
612 589
Oklahoma Texas
Romney/Steinbart
85 of 101
Life
Health
Auto
Romney/Steinbart
86 of 101
Romney/Steinbart
87 of 101
Life
Health
Auto
Romney/Steinbart
88 of 101
300
520
418
Auto
Romney/Steinbart
90 of 101
Life
Health
Auto
Romney/Steinbart
92 of 101
Romney/Steinbart
93 of 101
Life
Health
Auto
Romney/Steinbart
94 of 101
Romney/Steinbart
95 of 101
500 400 300 200 100 0 1985 1986 1987 1988 1989
406 320 345 385 410
Romney/Steinbart
96 of 101
There are no authoritative guidelines in GAAP or auditing standards that prohibit these behaviors, even though the results can be deceptive.
2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart 97 of 101
SUMMARY
Youve learned about the information processing operations that are required to update the general ledger and produce reports for internal and external users. Youve learned how IT developments impact the general ledger and reporting system. Youve learned about the major threats in the general ledger and reporting system and the controls that can mitigate those threats.
Romney/Steinbart
98 of 101
SUMMARY
Youve learned how data warehouses and data marts support business intelligence. Youve learned how the design of financial graphs can affect business decisions.
Romney/Steinbart
99 of 101