Bài giảng Hệ thống thông tin kế toán Chapter 4: ThS. Vũ Quốc Thông

Vũ Quốc Thông 10/16/2014

HO CHI MINH CITY OPEN UNIVERSITY ACCOUNTING – AUDITING FACULTY ACCOUNTING INFORMATION SYSTEM

ACCOUNTING RELATED PROCESSES

Lecturer: Vũ Quốc Thông

Chapter 4 Learning Objectives

 Describe

the basic business

activities

and related information processing operations performed in the related accounting cycle.

 Discuss the key decisions that need to be made in the related accounting cycle, and identify the information needed to make those decisions.

 Identify major threats in the related accounting cycle, and evaluate the adequacy of various control procedures for dealing with those threats.

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The Revenue Cycle: Sales to Cash Collections

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The Revenue Cycle

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The Revenue Cycle

 Provides goods and services to customers

 Primary Objective (P-P-P):  Provide the right product  In the right place  At the right time for the right price

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 Collects cash in payment for those sales

Revenue Cycle Activities

2. Shipping

1. Sales order entry

3. Billing

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4. Cash collections

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Sales Order Entry

1. Take order

3. Check inventory availability

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2. Check and approve credit

Sales Order Threats

 Invalid orders

 Incomplete/inaccurate orders

 Uncollectible accounts

 Loss of customers

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 Stock-out or excess inventory

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Sales Order Entry Controls

 Restriction of access to

master data

 Perpetual inventory control system

 Digital signatures or written signatures

 Credit limits

 Use of bar-codes or RFID

 Training

 Specific authorization to approve sales to new customers or sales that exceed a customer’s credit limit

 Sales forecasts and activity

 Periodic physical counts of inventory

 Aging of accounts

receivable

reports

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 CRM systems, self-help Web sites, and proper evaluation of customer service ratings

Shipping

1. Picking and packing the order

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2. Shipping the order

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Shipping Threats

 Picking the wrong items or the wrong quantity

 Shipping errors (delay or failure to ship, wrong

 Theft of inventory

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quantities, wrong items, wrong addresses, duplication)

Shipping Controls

 Bar-code and RFID

technology

 Reconciliation of picking lists to sales order details

 Restriction of physical access

 Reconciliation of

to inventory

shipping documents with sales orders, picking lists, and packing slips

 Documentation of all inventory transfers

 RFID and bar-code

technology

 Data entry via bar-code scanners and RFID

 Periodic physical counts of

inventory and reconciliation to recorded quantities

 Use RFID systems to identify delays

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 Configuration of ERP system to prevent duplicate shipments

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Billing

Invoicing

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2. Updating accounts receivable

Billing Threats

 Billing errors

 Failure to bill

 Posting errors in accounts receivable

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 Inaccurate or invalid credit memos

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Billing Controls

 Separation of billing and  Data entry controls shipping functions  Mailing of monthly  Reconciliation of statements to customers

 Reconciliation of

invoices with sales orders, picking tickets, and shipping documents subsidiary accounts to general ledger

 Configuration of system to automatically enter pricing data

 Segregation of duties of

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 Restriction of access to pricing master data credit memo authorization from both sales order entry and customer account maintenance

Cash Collections Threats

2. Cash flow problems

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1. Theft of cash

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Cash Collection Controls

 Separation of cash handling function from accounts

receivable and credit functions

 Regular reconciliation of bank account with recorded amounts by someone independent of cash collections procedures

 Having two people open all mail likely to contain customer payments

 Daily deposit of all cash receipts

 Use of cash registers

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 Cash flow budgets

The Expenditure Cycle: Purchasing to Cash Disbursements

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The Expenditure Cycle

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The Expenditure Cycle

 Purchasing and payment of  Goods and services

 Activities and information processing related to:

 Primary objective:

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 Minimize the total cost of acquiring and maintaining inventories, supplies, and the various services the organization needs to function

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Expenditure Cycle Activities

2. Receiving materials, supplies, and services

1. Ordering materials, supplies, and services

3. Approving supplier invoices

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4. Cash disbursements

Ordering Threats

 Inaccurate inventory records

 Purchasing items not needed

 Purchasing at inflated prices

 Purchasing goods of inferior quality

 Unreliable suppliers

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 Purchasing from unauthorized suppliers

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Ordering Controls

 Periodic physical counts of inventory

 Bar coding or RFID tags

 Perpetual inventory system

 Centralized purchasing function

 Review and approval of purchase requisitions

 Price lists

 Competitive bidding

 Budgets

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 Purchasing only from approved suppliers

Receiving Threats

 Mistakes in counting

 Accepting unordered items

 Verifying receipt of services

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 Theft of inventory

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Receiving Controls

 Budgetary controls

 Requiring existence of approved purchase order prior to accepting any delivery

 Restriction of physical access to inventory

 Do not inform receiving

employees about quantity ordered

 Require receiving employees to

 Documentation of all transfers of inventory between receiving and inventory employees

sign receiving report

 Document transfer of goods to

inventory

 Periodic physical counts of inventory and reconciliation to recorded quantities

 Use of bar-codes and RFID tags

 Segregation of duties:

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custody of inventory versus receiving

Invoice Processing

 Non-Voucher

 Each approved invoice is posted to individual supplier records in the accounts payable file and is then stored in an open-invoice file.

 When a check is written to pay for an invoice, the voucher package is removed from the open-invoice file, the invoice is marked paid, and then the voucher package is stored in the paid-invoice file.

 Voucher

invoice is approved for payment.

 Disbursement voucher is also created when a supplier

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 Identifies the supplier, lists the outstanding invoices, and indicates the net amount to be paid after deducting any applicable discounts and allowances.

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