AIS Chapter 2

7/21/2019 AIS Chapter 2

http://slidepdf.com/reader/full/ais-chapter-2-56dff8308d9ca 1/7

Chapter 2 Introduction to Transaction

Processing

A Financial Transaction is...

an economic event that afects the assets

and equities o the rm, is reected in its

accounts, and is measured in monetary

terms.

similar types o transactions are grouped

together into three transaction cycles:

the expenditure cycle,

the conversion cycle, and

the revenue cycle.

Relationship between Transaction

Cycles

Each Cycle has Two Subsystes

Expenditure Cycle: time lag beteen the

to due to credit relations ith suppliers:

physical coponent !acquisition

o goods"

!nancial coponent !cash

disbursements to the supplier" Conversion Cycle :

the production syste

!planning, scheduling, and control o

the physical product through the

manuacturing process"

the cost accounting syste

!monitors the o o cost inormation

related to production"

#evenue Cycle: time lag beteen the to

due to credit relations ith customers :

physical coponent !sales order

processing"

!nancial coponent !cash

receipts"

"anual Syste Accounting Records

Source #ocuents $ used to capture

and ormali%e transaction data needed or

transaction processing

Product #ocuents $ the result o

transaction processing

Turnaround #ocuents $ a product

document o one system that becomes a

source document or another system

$ournals $ a record o chronological entry

special %ournals $ specic classes

o transactions that occur in high

requency general %ournal $ nonrecurring

inrequent, and dissimilar transactions

&edger $ a boo& o nancial accounts

general ledger $ shos activity

or each account listed on the chart o

accounts

subsidiary ledger $ shos activity

by detail or each account type

Flow o' Econoic E(ents Into the

)eneral &edger



Accounting Records in a Coputer*

+ased Syste

E,P&A-ATI- F STEPS I- FI)/RE:

0. Compare the '# balance in the balance

sheet ith the master le '# control account

balance.

2. #econcile the '# control gure ith the

'# subsidiary account total.

1. (elect a sample o update entries made to

accounts in the '# subsidiary ledger

and trace these to transactions in the sales

)ournal !archive le".

. *rom these )ournal entries, identiy source

documents that can be pulled rom their les

and veried. + necessary, conrm these

source documents by contacting the

customers.

Audit Trail

'ccountants should be able to trace in both

directions.

(ampling and conrmation are to common

techniques.

E3aple o' Tracing an Audit Trail

eriying 'ccounts #eceivable

Coputer*+ased Systes

-he audit trail is less observable in

computer$based systems than traditiona

manual systems.

-he data entry and computer programs

are the physical trail.

-he data are stored in magnetic les.

Coputer Files

"aster File $ generally contains account

data !e.g., general ledger and subsidiary

le"

Transaction File $ a temporary le

containing transactions since the last

update

Re'erence File $ contains relatively

constant inormation used in processing

!e.g., tax tables, customer addresses"



Archi(e File $ contains past transactions

or reerence purposes

#ocuentation Techni4ues

ocumentation in a C/ environment is

necessary or many reasons.

*ive common documentation techniques:

Entity #elationship iagram

ata *lo iagrams

ocument *locharts

(ystem *locharts

0rogram *locharts

Entity Relationship #iagra 5ER#67

is a documentation technique to

represent the relationship 1 beteen

entities 2 in a system.

-he #E' model version o E# is idely

used in '+(. #E' uses 3 types o entities:

resources !cash, ra materials"

e(ents !release o ra materials

into the production process"

agents !inventory control cler&,

vendor, production or&er"

Cardinalities7

represents the numerical mapping

beteen entities:

one$to$one

one$to$many

many$to$many

Cardinalities

#ata Flow #iagras 5#F#67

use symbols to represent the processes

data sources, data os, and entities in a

system

represent the logical eleents o the

system

do not represent the physical syste

#ata Flow #iagra Sybols

#ocuents Flowcharts7

illustrate the relationship among

processes and the documents that o

beteen them

contain more details than data o

diagrams

clearly depict the separation o unctions

in a system

Sybol Set 'or #ocuent Flowcharts



First Stages in Constructing #ocuent

Flowchart Showing Areas o' Acti(ity

Finished #ocuent Flowchart Showing

Areas o' Acti(ity

Syste Flowcharts7

are used to represent the relationship

beteen the &ey elements$$input sources

programs, and output products$$o

computer systems

depict the type o media being used

!paper, magnetic tape, magnetic dis&s

and terminals"

in practice, not much diference beteen

document and system ocharts

Systes Flowchart Sybols

First Stages in Constructing Syste

Flowchart Showing Areas o' Acti(ity



Finished Syste Flowchart Showing All

Facts Translated into 8isual Sybols

Progra Flowcharts7

illustrate the logic used in programs

Progra Flowchart Sybols

"odern Systes (ersus &egacy Systes

4odern systems characteristics:

client$server based and process

transactions in real time

use relational database tables

have high degree o process

integration and data sharing

some are mainrame based and

use batch processing

(ome rms employ legacy systems or

certain aspects o their data processing.

'ccountants need to understand

legacy systems.

5egacy systems characteristics:

mainrame$based applications

batch oriented

early legacy systems use at les

or data storage

later legacy systems use

hierarchical and netor& databases

data storage systems promote a

single$user environment that

discourages inormation integration

/pdating "aster Files: Priary 9eys

5P96 and Secondary 9eys 5S96

#atabase +acup Procedures

• estructive updates leave no bac&up.

• -o preserve adequate records, bac&up

procedures must be implemented, as

shon belo:

-he master le being updated is

copied as a bac&up.

' recovery program uses the

bac&up to create a pre$update version

o the master le.

Coputer*+ased Accounting Systes

-o broad classes o systems:



batch systems

real$time systems

+atch Processing

' batch is a group o similar transactions

that are accumulated over time and then

processed together.

-he transactions must be independent of

one another during the time period over

which the transactions are accumulated

in order or batch processing to be

appropriate.

' time lag exists beteen the event and

the processing.

+atch Processing;Se4uential File

Steps in +atch Processing;Se4uential

File

9eystroe $ source documents are

transcribed by cler&s to magnetic tape or

processing later

Edit Run $ identies clerical errors in the

batch and places them into an error le

Sort Run $ places the transaction le in

the same order as the master le using a

primary &ey

/pdate Run $ changes the value o

appropriate elds in the master le to

reect the transaction

+acup Procedure

- the original master

continues to exist and a ne master le is

created

Ad(antages o' +atch Processing

6rgani%ations can increase e<ciency

by grouping large numbers o

transactions into batches rather than

processing each event separately.

/atch processing pro(ides control over

the transaction process via contro

gures.

Real*Tie Systes7

process transactions indi(idually at

the moment the economic event occurs

have no tie lag beteen the economic

event and the processing

generally re4uire greater resources

than batch processing since they require

dedicated processing capacity7 hoever,

these cost diferentials are decreasing

otentimes have longer systes

de(elopent tie

=hy #o So "any AIS /se +atch

Processing>



'+( processing is characteri%ed by high$

volume, independent transactions, such

are recording cash receipts chec&s

received in the mail.

-he processing o such high$volume

chec&s can be done during an of$pea&

computer time.

-his is one reason hy batch processing

maybe done using real$time data

collection.

AIS Chapter 2

Documents

Transcript of AIS Chapter 2