Accounting financial systems and auditing Slide bài giảng Kế toán Hệ thống tài chính và kiểm toán

FINANCIAL
SYSTEMS AND
AUDITING
Chapter 1
Accounting systems
FINANCIAL
SYSTEMS AND
AUDITING
Chapter 1
Accounting systems
Learning Objectives
1. Understand how an accounting system
operates
2. Describe the 3 phases involved in the
development of accounting systems, and
understand the essential characteristics
inherent in the system
3. Identify the principles of internal control
and understand the limitations of internal
control systems
Learning Objectives (cont’d)
4. Understand the advantages and
disadvantages of computerised accounting
systems
Lecture References
•
Hoggett, Edwards & Medlin, 6th edition,
Chapter 7
Operation of an Accounting
System
•

Converting data into information
Business
transactions
Reports
Interested
parties
Source
documents
Journals Ledgers
Development of an Accounting
System
•
Systems analysis
–
Information requirements
–
Sources of information
•
Systems design
–
Consideration of key elements
•
Systems implementation and review
–
Parallel operation
Development of an Accounting
System (cont’d)
•
Important considerations
–

Cost vs. benefits
–
Compatibility
–
Flexibility/adaptability
–
Internal control
Internal Control Systems
•
Internal control system defined
•
Principles of internal control systems
–
Clearly established lines of responsibility
–
Division of responsibility for related transactions
–
Mechanical and electronic devices
–
Adequate insurance
–
Internal auditing
–
Programming controls
–
Physical controls
–
Other controls
Limitations of Internal Control
Systems

•
Absolute assurance not possible
•
Effectiveness influenced by size of entity’s
operations
•
Good controls can break down due to
tiredness, indifference or carelessness
•
Reliance on segregation of duties
•
Difficulties in detecting computer fraud
Manual Accounting Systems —
Subsidiary Ledgers
•
Control accounts and subsidiary ledgers
–
Summary information
•
Control account
–
Detailed information
•
Subsidiary ledger
•
Accounts receivable
•
Accounts payable
•
Inventory

General Ledger
Accounts Receivable Control
Date Debit Credit Balance
Nov 1 6500
Nov 30 5500 11000
Nov 30 6900 4700
Subsidiary Ledger
P. Able
Date Debit Credit Balance
Nov 1 3200
Nov 8 1800 5000
Nov 16 3200 1800
Subsidiary Ledger
R. Baker
Date Debit Credit Balance
Nov 1 1100
Nov 3 1100 -
Nov 20 2400 2400
Subsidiary Ledger
D. Cane
Date Debit Credit Balance
Nov 1 2200
Nov 12 900 3100
Nov 28 2600 500
Schedule of Accounts Receivable
as at 30 November
P. Able $1 800
R. Baker 2 400
D. Cane 500
$4 700

Manual Accounting Systems —
Special Journals
•
General journal inefficient where there are
many transactions
•
Group like transactions and record in a
special purpose journal
–
credit sales sales journal
–
credit purchases purchases journal
–
cash receipts cash receipts journal
cash payments cash payments
journal
Sales Journal
•
Records only credit sales of inventory
•
Total posted to general ledger monthly
•
Detail (by debtor) posted to subsidiary
ledger daily
•
Advantages
–
Each transaction recorded on a single line
–
Entries do not require a narration

–
Posting efficiency achieved
Sales Journal
Invoice Posting GST
Accounts
Date No. Account Ref Sales Collections
Receivable
Jan 2 401 R Abbot 1100 110
1210
5 402 D Ball 900 90
990
7 403 N Camp 820 82
902
9 404 R Abbot 1410 141
1551
19 405 A Evans 920 92
1012
21 406 J Ford 850 85
935
26 407 A Evans 1550 155
1705
29 408 N Camp 750 75
825
8300 830
9130
Sales Journal
Invoice Posting GST
Accounts
Date No. Account Ref Sales Collections
Receivable

Jan 2 401 R Abbot 1100 110
1210
5 402 D Ball 900 90
990
7 403 N Camp 820 82
902
9 404 R Abbot 1410 141
1551
19 405 A Evans 920 92
1012
21 406 J Ford 850 85
935
26 407 A Evans 1550 155
1705
29 408 N Camp 750 75
825
8300 830
9130
Dr Accounts Receivable 9130
Cr Sales Revenue 8300
Cr GST Collections 830
Dr Accounts Receivable 9130
Cr Sales Revenue 8300
Cr GST Collections 830
Purchases Journal
•
Records only credit purchases
•
Can be used for items other than inventory
•

Total posted to general ledger monthly
•
Detail (by debtor) posted to subsidiary
ledger daily
•
Advantages
–
as for sales journal
Purchases Journal
Date of Post GST
Accounts
Date Invoice Account Terms Ref. Purch. Outlays
Payable
Jan 3 Jan 2 Kirby Ltd n/30 1900 190
2090
6 4 Risk Ltd n/30 1200 120
1320
8 8 Dunn Supply n/30 1410 141
1551
13 12 Dunn Supply n/30 1820 182
2002
20 18 CSR Ltd 2/10, n/30 820 82
902
24 24 Cooper Ltd 2/10, n/30 900 90
990
27 26 Risk Ltd 2/10, n/30 2810 281
3091
30 29 CSR Ltd n/30 900 90
990
11760 1176

12936 (510)
(160) (210)
Purchases Journal
Date of Post GST
Accounts
Date Invoice Account Terms Ref. Purch. Outlays
Payable
Jan 3 Jan 2 Kirby Ltd n/30 1900 190
2090
6 4 Risk Ltd n/30 1200 120
1320
8 8 Dunn Supply n/30 1410 141
1551
13 12 Dunn Supply n/30 1820 182
2002
20 18 CSR Ltd 2/10, n/30 820 82
902
24 24 Cooper Ltd 2/10, n/30 900 90
990
27 26 Risk Ltd 2/10, n/30 2810 281
3091
30 29 CSR Ltd n/30 900 90
990
11760 1176
12936 (510)
(160) (210)
Dr Purchases 11 760
Dr GST Outlays 1 176
Cr Accounts Payable 12 936
Dr Purchases 11 760

Dr GST Outlays 1 176
Cr Accounts Payable 12 936
Cash Receipts Journal
•
Records all receipts of cash
•
Records each receipt and total banked
•
Totals posted to general ledger monthly
•
Detail (debtors only) posted to subsidiary
ledger daily
•
Columns set up for common receipts
Cash Payments Journal
•
Records all payments of cash
•
Records each payment and cheque number
•
Totals posted to general ledger monthly
•
Detail (creditors only) posted to subsidiary
ledger daily
•
Columns set up for common payments
Use of the General Journal
•
Generally inefficient
•

Used for
–
Infrequent transactions
–
Adjusting entries
–
Closing entries
–
Reversing entries
–
Correcting entries
Transaction Types Summary
•
Credit Sale
•
Credit Purchase
•
Receipt of Cash
•
Payment of Cash
•
Adjusting entries
•
Closing entries
•
Reversing entries
•
Credit Sale
•
Credit Purchase

•
Receipt of Cash
•
Payment of Cash
•
Adjusting entries
•
Closing entries
•
Reversing entries

Sales Journal

Purchases Journal

Cash Receipts Jnl

Cash Payments Jnl

General Journal

General Journal

General Journal

Sales Journal

Purchases Journal

Cash Receipts Jnl


Cash Payments Jnl

General Journal

General Journal

General Journal
Other Issues
•
Abnormal balances in subsidiary ledgers
–
Credit balances in accounts receivable
–
Debit balances in accounts payable
•
Account set-offs
–
Buying and selling from same customer/supplier
–
Need legal right to set-off
Computerised Accounting
Systems
•
Use of computers in business
•
Manual vs. computerised systems
–
Input
–

Processing
–
Output
•
MYOB
•
Quickbooks Pro
Computerised Accounting
Systems (cont’d)
Accounts receivable
master file -
start of period
Accounts receivable
master file -
start of period
Accounts receivable
master file -
end of period
Accounts receivable
master file -
end of period
Transaction file -
current period
Transaction file -
current period
Transaction file -
current period
Transaction file -
current period
Transaction file -

current period
Transaction file -
current period
COMPUTER
(processing)
•
Schedule of
accounts receivable
•
Sales journal
•
Cash receipts journal
•
Schedule of
accounts receivable
•
Sales journal
•
Cash receipts journal
INPUTS OUTPUTS
Accounting Software
•
Electronic spreadsheets
–
Excel, Lotus 123
•
General ledger programs
–
ACCPAC, Attache, MYOB, QuickBooks, Sybiz
–

Data input obtained from source documents
–
Output produced by the program