Accounting Chapter Summary

* Describe the role of databases and database management systems in managing organizational data and information.

To conduct an analysis of the systems requirements we will first need to understand how the company’s enterprise system is set-up. An enterprise system is the overall combination of computer hardware and software that a business uses to organize and run its operations. (What is enterprise system?)

Internal control is one of the integral parts of an organization. It is a system which controls different types of risks,

There are a variety of methods for storing and retrieving information and data, one of the most likely methods for storing information in a business environment is electronically using databases and Excel.

The two main methods of storage are manual and electronic, both methods having their own benefits. The data can be used for analysis to assist the organisation fulfil its future goals and overall vision. All data must be stored in such a way that it complies with the regulations put in place by the government. This not only protects the organisation, but each and every member of the public.

The value chain is one of the critical elements of a company’s strategy in today’s competitive world, because company’s profit depends on how the successful and efficient it runs its operations and how the end product appeals to the customers at a price that covers all the expenses of the company.

Internal controls are vital to any company’s business and financial sustainability. Internal controls consist of measures taken by a company safeguarding against fraud, and theft. Internal controls ensure accuracy and reliability in accounting data, and secure policies within the organization. Further, internal controls evaluate all levels of performance. These are addressed with five principles

The value chain is one of the critical elements of a company’s strategy in today’s competitive world, because company’s profit depends on how the successful and efficient it runs its operations and how the end product appeals to the customers at a price that covers all the expenses of the company.

1. Internal control is a process designed to guarantee the achievement of the objectives of reliable financial reporting, compliance with laws and regulations and ineffective and inefficient operations.

An effective system of internal control limits the probability that fraud will take place. Within an effective system on internal control an organization will safeguard their assets, encourage employees to follow company policy, promote operational efficiency, strive towards the most accurate and reliable accounting records, and complies with all legal requirements. Internal controls not only helps to eliminate fraud but also waste and inefficiency.

Internal controls are the methods used in businesses to examine the assets, minimize errors, prevent fraud , and to assure management policies enacted. accounting controls also provide a safeguard for the company assets by accurate financial records. The internal controls are intended to provide certified transactions that are recorded in the financial statement preparations.

Databases allow us to easily store and retrieve data in a purely digital format. The strength of this is that large amounts of data can be stored and retrieved with minimal effort on the part of the user. Opposed to manually flipping through files, one can quickly pull up the requested data through a computer program. Many systems that were conventionally paper and file based have been converted to a digital format which are now stored in one or more databases.

Internal control is the process designed, implemented and maintained by those charged with governance, management and other personnel to provide reasonable assurance about the achievement of an entity’s objectives with regard to reliability of financial reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations. The term “controls” refers to any aspects of one or more of the components of internal control. (Ifac, 2010, p. 264)

Internal controls are methods that a company puts in place to ensure the integrity of financial reports and accounting information, and that they meet operational and profitability targets. They are implemented to assure the safe-guarding of assets as well as to detect fraud and any other errors. As such, they provide the company with reasonable assurance that specific objectives will be achieved.

Effective internal controls protect a company’s assets, maintain compliance, improve operations, prevent fraud, and promote accuracy in financial reporting. In 1992 the