Accounting Information Systems, 6 th edition - Blog Staff · Sales Order Process Flowchart. ......
Transcript of Accounting Information Systems, 6 th edition - Blog Staff · Sales Order Process Flowchart. ......
Accounting Information Systems,
6th
editionJames A. Hall
COPYRIGHT © 2009 South-Western, a division of Cengage Learning. Cengage Learning and South-Western are trademarks used herein under license
Objectives for Chapter 4Tasks performed in the revenue cycle, regardless of the technology usedFunctional departments in the revenue cycle and the flow of revenue transactions through the organizationDocuments, journals, and accounts needed for audit trails, records, decision making, and financial reportingRisks associated with the revenue cycle and the controls that reduce these risksThe operational and control implications of technology used to automate and reengineer the revenue cycle
The Conceptual SystemOverview of Revenue Cycle Activities
Three process in revenue cycle for most retail, wholesale & manufacturing organizations:
Sales order procedureSales return procedureCash receipt procedure
REVENUE CYCLE(SUBSYSTEM)
Sales Order
Billing/ AccountsReceivable
Cash Receipts/Collections
Shipping
1
6
4/5
3
Credit / CustomerService
2
Revenue Cycle Databases
Master filescustomer master fileaccounts receivable master filemerchandise inventory master file
Transaction and Open Document Files
sales order transaction fileopen sales order transaction file
sales invoice transaction filecash receipts transaction file
•
Other Files– shipping and price data
reference file
– credit reference file (may not
be needed)
– salesperson file (may be a
master file)
– Sales history file– cash receipts history file– accounts receivable reports file
DFD of Sales Order Process
Journal Vouchers/Entries How do we get them?
Billing Department prepares a journal voucher:Accounts Receivable
DR
Sales
CRInventory Control Dept. prepares a journal voucher:Cost of Goods Sold
DR
Inventory
CRCash Receipts prepares a journal voucher:Cash
DR
Accounts Receivable
CR
Sales Order Process Flowchart
Sales Order Process Flowchart
Manual Sales Order Processing
Begins with a customer placing an orderThe sales department captures the essential details on a sales order form.
The transaction is authorized by obtaining credit approval by the credit department.Sales information is released to:
BillingWarehouse (stock release or picking ticket)Shipping (packing slip and shipping notice)
The merchandise is picked from the Warehouse and sent to Shipping.
Stock records are adjusted.The merchandise, packing slip, and bill of lading are prepared by Shipping and sent to the customer.
Shipping reconciles the merchandise received from the Warehouse with the sales information on the packing slip.
Shipping information is sent to Billing. Billing compiles and reconciles the relevant facts and issues an invoice to the customer and updates the sales journal. Information is transferred to:
Accounts Receivable (A/R)Inventory Control
Manual Sales Order Processing
A/R records the information in the customer’s account in the accounts receivable subsidiary ledger.Inventory Control adjusts the inventory subsidiary ledger.Billing, A/R, and Inventory Control submits summary information to the General Ledger dept., which then reconciles this data and posts to the control accounts in the G/L.
Manual Sales Order Processing
The company shipped the customer the wrong merchandise.The goods were defective.The product was damage in shipment.The buyer refused delivery because the seller shipped the goods too late or they were delayed in transit.
Sales Returns Procedures
DFD of Sales Returns
Sales Returns Flowchart
Sales Return Journal EntryG/L posts the following to control accounts:
Inventory—Control
DRSales Returns and Allowances
DR
Cost of Goods Sold
CRAccounts Receivable—Control
CR
DFD of Cash Receipts Processes
Cash Receipts Flowchart
Manual Cash Receipts ProcessesCustomer checks and remittance advices are received in the Mail Room.
A mail room clerk prepares a cash prelist and sends the prelist and the checks to Cash Receipts. The cash prelist is also sent to A/R and the Controller.
Cash Receipts: verifies the accuracy and completeness of the checksupdates the cash receipts journalprepares a deposit slipprepares a journal voucher to send to G/L
A/R posts from the remittance advices to the accounts receivable subsidiary ledger.
Periodically, a summary of the postings is sent to G/L.
G/L department:reconciles the journal voucher from Cash Receipts with the summaries from A/R updates the general ledger control accounts
The Controller reconciles the bank accounts.
Manual Cash Receipts Processes
Summary of Internal Controls
Authorization ControlsProper authorization of transactions (documentation) should occur so that only valid transactions get processed.Within the revenue cycle, authorization should take place when:
a sale is made on credit (authorization)a cash refund is requested (authorization)posting a cash payment received to a customer’s account (cash pre‐list)
Segregation of Functions Three Rules
1. Transaction authorization should be separate from
transaction processing.2.
Asset custody should be separate from asset record‐
keeping.3.
The organization should be so structured that the
perpetration of a fraud requires collusion between two or more individuals.
Segregation of FunctionsSales Order Processing
credit authorization separate from SO processinginventory control separate from warehouseaccounts receivable sub‐ledger separate from general ledger control account
Cash Receipts Processingcash receipts separate from accounting recordsaccounts receivable sub‐ledger separate from general ledger
Supervision
Often used when unable to enact appropriate segregation of duties. Supervision of employees serves as a deterrent to dishonest acts and is particularly important in the mailroom.
Accounting Records
With a properly maintained audit trail, it is possible to track transactions through the systems and to find where and when errors were made:
pre‐numbered source documentsspecial journalssubsidiary ledgersgeneral ledgerfiles
Access Controls
Access to assets and information (accounting records) should be limited.Within the revenue cycle, the assets to protect are cash and inventories and access to records such as the accounts receivable subsidiary ledger and cash journalshould be restricted.
Independent VerificationPhysical procedures as well as record‐keeping should be independently reviewed at various points in the system to check for accuracy and completeness:
shipping verifies the goods sent from the warehouse are correct in type and quantitywarehouse reconciles the stock release document (picking slip) and packing slip billing reconciles the shipping notice with the sales invoicegeneral ledger reconciles journal vouchers from billing, inventory control, cash receipts, and accounts receivable
Automating the Revenue CycleAuthorizations and data access can be performed through computer screens. There is a decrease in the amount of paper.The manual journals and ledgers are changed to disk or tape transaction and master files. Input is still typically from a hard copy document and goes through one or more computerized processes. Processes store data in electronic files (the tape or disk) or prepare data in the form of a hardcopy report.
Automating the Revenue CycleRevenue cycle programs can include:
formatted screens for collecting data edit checks on the data entered instructions for processing and storing the datasecurity procedures (passwords or user IDs) steps for generating and displaying output
To understand files, you must consider the record design and layout. The documents and the files used as input sources must contain the data necessary to generate the output reports.
Computer‐Based Accounting Systems
CBAS technology can be viewed as a continuum with two extremes:
automation ‐ use technology to improve efficiency and effectiveness reengineering – use technology to restructure business processes and firm organization
Example: Automated Batch Sales
Reengineering Sales Order Processing Using Real‐Time Technology
Manual procedures and physical documents are replaced by interactive computer terminals.Real time input and output occurs, with some master files still being updated using batches.
Real‐time ‐ entry of customer order, printout of stock release, packing slip and bill of lading; update of credit file, inventory file, and open sales orders fileBatch ‐ printout of invoice, update of closed sales order (journal), accounts receivable and general ledger control account
Real‐time Sales Order
Advantages of Real‐Time Processing
Shortens the cash cycle of the firm by reducing the time between the order date and billing date Better inventory management which can lead to a competitive advantageFewer clerical errors, reducing incorrect items being shipped and bill discrepanciesReduces the amount of expensive paper documents and their storage costs
Reengineered Cash Receipts
The mail room is a frequent target for reengineering. Companies send their customers preprinted envelopes and remittance advices. Upon receipt, these envelopes are scanned to provides a control procedure against theft.Machines are open the envelopes, scan remittance advices and checks, and separate the checks.Artificial intelligence may be used to read handwriting, such as remittance amounts and signatures.
Automated Cash Receipts
Point‐of‐Sale SystemsPoint of sale systems are used extensively in retail establishments.
Customers pick the inventory from the shelves and take them to acashier.
Daily ProcedureThe clerk scans the universal product code (UPC). The POS system is connected to an inventory file, where the price and description are retrieved.
The inventory levels are updated and reorder needs can immediately be detected.
Point‐of‐Sale SystemsThe system computes the amount due. Payment is either cash, check, ATM or credit card in most cases.
No accounts receivables
If checks, ATM or credit cards are used, an on‐line link to receive approval is necessary.
Point‐of‐Sale SystemsEnd‐of‐day ProcedureAt the end of the day or a cashier’s shift, the money and receipts in the drawer are reconciled to the internal cash register tape or a printout from the computer’s database.
Cash over and under must be recorded
Journal voucher posted to GL account:Cash
DR
Cash Over/Short
DR
A/R (credit card)
DR
COGS
DR
Sales
CRInventory
CR
Computerized POS
Reengineering Using EDIEDI helps to expedite transactions.The customer’s computer:
determines that inventory is neededselects a supplier with whom the business has a formal business agreementdials the supplier’s computer and places the order
The exchange is completely automated.No human intervention or management
EDI System
PurchasesSystem
EDI TranslationSoftware
EDI TranslationSoftware
CommunicationsSoftware
CommunicationsSoftware
OtherMailbox
OtherMailbox
CompanyA’s mailbox
CompanyB’s mailbox
Sales OrderSystem
ApplicationSoftware
ApplicationSoftware
Direct Connection
VAN
Company A Company B
Reengineering Using the Internet
Typically, no formal business agreements exist as they do in EDI.Most orders are made with credit cards.Mainly done with e‐mail systems, and thus a turnaround time is necessary
Intelligent agents are needed to eliminate this time lag.Security and control over data is a concern with Internet transactions.
CBAS Control ConsiderationsAuthorization ‐ in real‐time systems, authorizations are automated
Programmed decision rules must be closely monitored.Segregation of Functions ‐ consolidation of tasks by the computer is common
Protect the computer programsCoding, processing, and maintenance should be separated.
Supervision ‐ in POS systems, the cash register’s internal tape or database is an added form of supervisionAccess Control ‐magnetic records are vulnerable to both authorized and unauthorized exposure and should be protected
Must have limited file accessibilityMust safeguard and monitor computer programs
CBAS Control Considerations
Accounting Records ‐ rest on reliability and security of stored digitalized data
Accountants should be skeptical about the accuracy of hard‐copy printouts.Backups ‐ the system needs to ensure that backups of all files are continuously kept
Independent Verification – consolidating accounting tasks under one computer program can remove traditional independent verification controls. To counter this problem:
perform batch control balancing after each run produce management reports and summaries for end users to review
CBAS Control Considerations
PC‐Based Accounting SystemsUsed by small firms and some large decentralized firmsAllow one or few individuals to perform entire accounting functionMost systems are divided into modules controlled by a menu‐driven program:
general ledgerinventory controlpayrollcash disbursementspurchases and accounts payablecash receiptssales order
PC Control IssuesSegregation of Duties ‐ tend to be inadequate and should be compensated for with increased supervision, detailed management reports, and frequent independent verificationAccess Control ‐ access controls to the data stored on the computer tends to be weak; methods such as encryption and disk locking devices should be usedAccounting Records ‐ computer disk failures cause data losses; external backup methods need to be implemented to allow data recovery
Internal Control
Risk Exposure 1) Credit sales made to customers who represent poor credit risks 1) Losses from bad debts 2) Unrecorded or unbilled shipments 2) Losses of revenue; overstatement
of inventory and understatement of accounts receivable in the balance sheet
3) Errors in preparing sales invoices 3) Alienation of customers and possible loss of future sales; losses of revenue
Figure 12-22
Risk Exposures in the Revenue Cycle - I
Risk Exposure 4) Misplacement of orders from customers or unfilled backorders
4) Losses of revenue and alienation of customers
5) Incorrect posting of sales to accounts receivable records
5) Incorrect balances in accounts receivable and general ledger account records
6) Posting of revenues to wrong accounting periods, such as premature booking of revenues
6) Overstatement of revenue in one year (year of premature booking) and understatement of revenue in the next
Figure 12-22 (continued)
Risk Exposures in the Revenue Cycle ‐
II
Risk Exposure 7) Fictitious credit sales to nonexistent customers
Overstatement of revenues and accounts receivable
8) Excessive sales returns and allowances with certain of the credit memos being for fictitious returns
8) Losses in net revenue, with the proceeds from subsequent payments by affected customers being fraudulently pocketed
9) Theft or misplacement of finished goods in the warehouse or on the shipping dock
9) Losses in revenue; overstatement ofinventory on the balance sheet
Figure 12-22 (continued)
Risk Exposures in the Revenue Cycle ‐
III
Risk Exposure 10) Fraudulent write-offs of customers’ accounts by unauthorized persons
10) Understatement of accounts receivable; losses of cash receipts when subsequent collections on written-off accounts are misappropriated by perpetrators of the fraud
11) Theft (skimming) of cash receipts, especially currency, by persons involved in the processing; often accompanied by omitted postings to affected customers’ accounts
11) Losses of cash receipts; overstatement of accounts receivable in the subsidiary ledger and the balance sheet
12) Lapping of payments from customers when amounts are posted to accounts receivable records
12) Losses of cash receipts; incorrect account balances for those customers whose records are involved in the lapping
Figure 12-22 (continued)
Risk Exposures in the Revenue Cycle ‐
IV
Risk Exposures in the Revenue Cycle ‐
V
Risk Exposure 13) Accessing of accounts receivable, merchandise inventory, and other records by unauthorized persons
13) Loss of security over such records, with possibly detrimental use made of the data accessed
14) Involvement of cash, merchandise inventory, and accounts receivable records in natural or human-made disasters
14) Losses of or damages to assets
15) Planting of virus by disgruntled employee to destroy data on magnetic media
15) Loss of customer accounts receivable data needed to monitor collection of amounts from previous sales
Figure 12-22 (continued)
Risk Exposures in the Revenue Cycle ‐
VI
Risk Exposure 16) Interception of data transmittal between customers and the web site
16) Loss of data which may be used to the detriment of customers
17) Unauthorized viewing and alteration of other customer account data via the Web
17) Loss of security over customer records resulting in misstatement of accounts receivable balances
18) Denial by a customer that an online order was placed after the transaction is processed
18) Loss of sales revenues
Figure 12-22 (continued)
Risk Exposures in the Revenue Cycle ‐
VII
Risk Exposure 19) Use of stolen credit cards to place orders via the Web
19) Loss of shipped goods for which payments will not be received
20) Breakdown of the web server due to unexpectedly high volume of transactions
20) Loss of sales revenues and alienation of customers
Figure 12-22 (continued)
Typical Control Objectives
for the Revenue Cycle
Semua customer yang diterima untuk credit sales adalah credit‐worthySemua barang yang dipesan dikirim dan semua jasadilaksanakan sesuai dengan tanggal yang disetujui oleh semuapihak.Semua barang yang dikirim diotorisasi dan ditagih All shipped goods are authorized dan ditagih sesuai dengan periodeakuntansi yang tepat. Semua sales returns and allowances diotorisasi dan dicatatdengan teliti dan berdasarkan actual return of goodsSemua cash receipts dicatat dengan lengkap dan akurat. Semua credit sales dan transaksi cash receipts transactions diposting ke customers’ accounts yang tepat pada accounts receivable ledgerSemua accounting records, merchandise inventory,and cash dilindungi.
General Controls of the Revenue Cycle ‐
I
Organizational ControlsUnit‐unit dengan fungsi kustodian harus dijaga agar terpisah satu sama lain.Fungsi kustodian harus dipisah dari fungsi record‐keeping. Untuk sistem yang dikomputerisasi, pengembangansistem harus dijaga agar terpisah dari operasi‐operasisistem.
Documentation ControlsDokumentasi yang lengkap dan up‐to‐date harus tersediatermasuk didalamnya adalah salinan dokumen, flowcharts, record lay‐outs, dan laporan.Program untuk edit dan proses sales dan cash receipt harus diorganisasikan ke buku atau paket terpisah yang ditujukan ke masing‐masing programer, komputeroperator, dan system user.Kebijakan manajemen yang berhubungan dengan credit approvals, account write‐off, dsb harus dalam bentuktertulis.
General Controls of the Revenue Cycle ‐
II
Asset Accountability ControlsA/R subsidiary ledger (master file) harus sering direkonsiliasidengan A/R control account di GL.Merchandise inventory record harus dijaga pada ledger dandirekonsiliasi secara periodik ke merchandise inventory control account Bank reconciliation, harus dibandingkan balance pada bank account dengan cash account balance di GL.Petugas bagian pengiriman yang menyetujui penerimaanorder dan pengambilan barang dari gudang denganmenandatangani stock request atau shipping order.Mail room clerk yang menyiapkan daftar semua receive remittances.Customer yang mereview monthly statement dari sales danpayments untuk jumlah‐jumlah yang salah.
General Controls of the Revenue Cycle ‐
II
Management Practice ControlsKebijakan
manajemen
yang berhubungan
dengan
revenue
cycle yang harus
ditetapkan
dan
diikuti
adalah
sbb:
Pegawai (programer dan akuntan harus dilatih denganhati‐hati), pegawai yang menangani kas harus diikatdengan surat perjanjian.Perubahan dan pengembangan sistem harus melaluiprosedur yang jelas yang melibatkan prior approvals, testing, dan sign‐offs.Audit terhadap prosedur dan kebijakan sales dan cash receipt harus dilakukan.Manajer harus melakukan review periodic analyses, control summaries, dan laporan‐laporan tentang aktivitasaccount dan computer‐approved transactions.
General Controls of the Revenue Cycle ‐
II
Data Center Operations ControlsJadwal pemrosesan komputer untuk sales dan cash receipts batches harus ditetapkan dengan jelas.Sistem informasi dan pegawai bagian akuntansi harus diawasisecara aktif dan pekerjaannya direview dengan bantuancomputer processing control reports dan access logs.
Authorization ControlsSemua transaksi credit sales (atau service order) harusdiotorisasi oleh manajer kedit. Pada sistem yang dikomputerisasi otorisasi dilakukan dengan program aplikasiyang dibagun dengan aturan persetujuan kredit.Manajer tidak terlibat dalam pengolahan sales atau pada A/R.Salinan permintaan barang dari sales order harus mengotorisasipengambilan barang dari gudang dan pemindahan barang keshipping dock.
General Controls of the Revenue Cycle ‐
II
Access ControlsBerikan password pada petugas yang diberi otorisasi untukmengakses A/R dan file‐file yang berhubungan dengancustomer, untuk melaksanakan tugas‐tugas yang telahditentukan.
Batasi terminal‐terminal untuk melaksanakan fungsi‐fungsiyang berhubungan dengan transaksi sales dan cash receipts.
Catat semua transaksi sales and cash receipt ke sistem.
Sering‐seringlah mengeluarkan master file A/R danmerchandise inventory ke magnetic tape backups
Lindungi gudang dan lemari besi secara fisik.
Gunakan lockbox collection system pada situasi yang feasible.
General Controls of the Revenue Cycle ‐
III
Application Controls of the Revenue Cycle: Input ‐
I
1.
Siapkan
pre‐numbered documents dan
dokumen
yang dirancang
dengan
baik
untuk
dokumen
sales,
shipping, and cash receipts, masing‐masing
dokumen diotorisasi
oleh
orang
yang berwenang.
2.
Validasi
data sales orders dan
remittance advices seperti
data yang disiapkan
dan
dimasukkan
untuk
pengolahan. Pada
computer‐based systems, validasi harus
dilaksanakan
dengan
sarana
program edit check.
Saat
data dimasukkan
ke
computer‐readable medium, key verification
dicocokkan.
Application Controls of the Revenue Cycle: Input ‐
II
3.
Betulkan
kesalahan
yang terdeteksi
selama
data entry dan
sebelum
data diposting ke record‐record
customer dan
inventory.4.
Precompute
batch control totals yang berhubungan
dengan
data penting
pada
sales invoices (atau shipping notices) dan
remittance advices.
Precomputed
batch control totals haus
dibandingkan dengan
totals yang dihitung
selama
posting ke
accounts receivable ledger dan
setiap
kali processing run. Pada
cash receipts, total pada
remittance advices
harus
dibandingkan
dengan
total pada
deposit slips.
Application Controls of the Revenue Cycle: Processing ‐
I
1.
Pindahkan
barang
yang dipesan
dari
gudang
barang
jadi (finished goods warehouse) dan
kirim
barang‐barang
hanya
berdasarkan
otorisasi
tertulis
seperti
stock request copies2.
Invoice customers hanya
diberiahukan
oleh
bagian pengiriman
atas
jumlah
yang telah
dikirimkan.
3.
Pengeluaran
credit memos untuk
sales returns hanya
jika disertai
bukti
(seperti
receiving report) telah
diterima
bhwa
barang
memang
benar‐benar
dikembalikan.4.
Periksa
semua
perhitungan
pada
sales invoices sebelum dikirim
dan
diposting
ke
customers’
accounts yang tepat.
Bandingkan
sales invoices dengan
shipping notices and open orders, untuk
meyakinkan
nahwa
jumlah
yang dipesan
direkonsiliasi
dengan
order yang dikirim
dan
back‐ordered.
Application Controls of the Revenue Cycle: Processing ‐
II
5.
Periksa
bahwa
jumlah
total yang diposting
ke
accounts receivable accounts
dari
batch transaksi
sama dengan
precomputed
batch totals, dan
posting jumlah
total ke general ledger accounts yang tepat.
6.
Depositokan
semua
kash
yang diterima
lengkap
dengan minimum of delay, sehingga
menghilangkan
kemungkinan
cash receipts yang sedang
digunakan untuk
membayar
pegawai
atau
untuk
membayar
petty
cash funds.7.
Betulkan
kesalahan
yang dibuat
selama
tahapan pengolahan
biasanya
dengan
membalik
kesalahan
posting ke
perkiraan
dan
masukan
data yang benar. Audit trail yang berhubungan
dengan
perkiraan
yang
dikoreksi
akan
menunjukkan
kesalahan
aslinya, the reversals, and the corrections
Application Controls of the Revenue Cycle: Output
1.
Siapkan
monthly statements, yang harus
diposkan
ke semua
credit customers, terutama
jika
pendekatan
balance forward
digunakan.2.
Salinan
file dari
semua
dokumen
yang berkaitan dengan
transaksi
sales dan
cash receipts dicek
secara
periodik
dengan
urutan
nomor
pada
tiap
file untuk melihat
celah
yang ada. Jika
transaksi
tidak
didukung
dengan
preprinted documents, seperti
yang sering terjadi
pada
online computer‐based systems, tandai
nomor
transaksi
ke
transactions.3.
Siapkan
daftar
transaksi
yang dicetak
dan
account summaries pada
periodic basis untuk
menyediakan
audit trail dan
dasar
untuk
review.
Web Security ProceduresAuthentication, user identification number dan password dibutuhkan untuk akses ke private network.Authorization
Use of an Access Control ListAccountability, untuk menetapkan tanggung jawab atassegala modifikasi pada Web sites Web sercer log harusdipelihara.Data Transmission, untuk menjaga kerahasiaan danintegritas data yang dikirim via Web harus menggunakanenkripsi.Disaster Contingency & Recovery Plan,
Diperlukan prosedur backup yang cukup termasuk fault tolerance untuk meminimalkan gangguan yang tidakdiharapkan. Recovery plan direncanakan untuk meyakinkan rekonstruksidari data yang hilang.