Bài giảng Romney_ais13 - Chapter 16: General Ledger and Reporting System

General Ledger and Reporting SystemChapter 1616-1Learning ObjectivesDescribe the information processing operations required to update the general ledger and to produce reports for internal and external users.Identify the major threats in general ledger and reporting activities and evaluate the adequacy of various control procedures for dealing with them.Understand the implications of new IT developments, such as XBRL, and changes in external reporting requirements, such as IFRS, for the design and operation of the general ledger and reporting system.Discuss how tools like responsibility accounting, balanced scorecards, and graphs can be used to provide information managers need to effectively monitor performance.16-2General Ledger and Reporting System ProcessUpdate general ledgerPost adjusting entriesPrepare financial statementsProduce managerial reports16-3General Ledger and Reporting System16-4Update General LedgerThreatsControlsInaccurate updating of general ledgerUnauthorized journal entries1 a. Data entry processing integrity controls b. Reconciliations of accounts from subsidiary journals to general ledger accounts (e.g., Accounts payable) c. Audit trail2 a. Access controls b. Reconciliations and control reports c. Audit trail16-5Adjusting EntriesAccrualsMade at end of accounting period to reflect events that have occurred but are not in the financial statements (e.g., wages payable)DeferralsMade at end of accounting period to reflect exchange of cash prior to performance of related event (e.g., rent)EstimatesPortion of expenses expected to occur over a number of accounting periods (e.g., depreciation)RevaluationsEntries made to reflect differences between actual and recorded value of an asset or change in accounting principleCorrectionsEntries made to counteract effects of errors found in the general ledger16-6Post Adjusting EntriesThreatsControlsInaccurate adjusting entriesUnauthorized adjusting entries1 a. Data entry processing integrity controls b. Spreadsheet error protection controls c. Standard adjusting entries2 a. Access controls b. Reconciliations and control reports c. Audit trail creation and review16-7Prepare Financial StatementsProduce Managerial ReportsThreatsControlsInaccurate financial statementsFraudulent financial reportingPoorly designed reports and graphs1 a. Processing integrity controls b. Use of packaged software c. Training and audits2 a. Audits3 a. Responsibility accounting b. Balanced scorecard c. Training on proper graph design16-8New Standards and Technology That Affect Financial ReportingInternational Financial Reporting Standards (IFRS)Understand the systems implications due to the fact that the IFRS is different in financial reporting than Generally Accepted Accounting Principles (GAAP)eXtensible Business Reporting Language (XBRL)Specifically used for communicating financial data (required by the Securities and Exchange Commission (SEC) if public company)16-9Evaluating PerformanceResponsibility accountingReporting results based upon managerial responsibilities in an organization Flexible budgetBudget formula based upon level of activity (e.g., production levels)Balanced scorecardMeasures financial and nonfinancial performanceGraphsData visualization and proper graph design16-10Key TermsJournal voucher fileTrial balanceAudit trailXBRLInstance documentElementTaxonomySchemaLinkbasesStyle sheetExtension taxonomyResponsibility accountingFlexible budgetBalanced scorecard16-11