Internal Control and Risk Evaluation

Romney, M., & Steinbart, P. (2012). Accounting information systems. (12th ed., p. 143). Upper Saddle River, NJ: Prentice Hall.

The auditor must assess the transactions for how much of a risk factor is involved. When reviewing these transactions, auditor must be able to review the internal controls of the company’s accounting personnel. The segregation of duties is associated with the safeguarding of an organization 's assets and the topic known as internal control. An example of the segregation of duties would be a company 's requirement that the bank statement for its checking

Go to Course Home and review the Course Project tab. Then download the Course Project template from Doc Sharing. In this graded discussion, we will be examining the operation of the Accounting Information System (AIS) with the use of problems and exercises from your textbook.

Kudler Fine Foods is in search of a new accounting system to help run the corporation faster and more efficiently for its clients, employees, and

There are several top rated Core Accounting programs that would fulfill the needs of your accounting department. Weak areas and areas of concern with the existing system include inventory and ordering control, and the way employees punch in and out for work. Presently, there is no systematic way of ordering supplies other than when a store runs low, an order is placed to share between the three stores. If one of the stores should experience a slow period, overstocking could very well become a problem, especially when freshness of their products is one of Kudler’s trademarks. An inventory control feature within the core program can automatically analyze, predict supply needs for a set delivery date, and actually place the order for each individual store saving lots of time and expense. The process in which employees punch in and out of work and the process it goes through just to get to the payment agency seems very time consuming for Kudler. A payroll processing feature of a new accounting system would record data such as name, date, time, employee number, etc. from a card that an employee would swipe upon signing in or out,

In the modern business today, there is no more manual accounting. Instead a lot of companies and businesses all over the world are trying to use and adapt by having an accounting system that is computerised, less hassle and fast processing.

Accounting Information Systems The Crossroads of Accounting and IT by Donna Kay, Ali Ovlia Instructor’s Solutions Manual

An accounting information system – its principles and components- Control principle prescribes that an accounting information system have internal controls. Internal controls are methods and procedures allowing managers to control and monitor business activites. Relevance principle prescribes that an accounting information system report useful, understandable, timely and pertinent information for effective decision making. The compatibility principle prescribes that an accounting information system conform with a company’s activities, personnel, and structure. The flexibility principle prescribes that an accounting information system be able to adapt to changes in the company, business environment, and needs of decisions makers. The cost-benefit principle prescribes that the benefits from an activity in an accounting information system outweight the costs of that activity. The five basic components of an accounting information system are source documents, input devices, information processors, information storage, and output devices.

Tesco is a big company managing large sums of money and more complex financial transactions. Its computerised accounting systems are compatible to its industry. An accounting system is effective to the extent that it is compatible with daily business needs, such as storing client information, creating invoices, keeping account of and tracking inventories. The nature of this system urges the all users to be well trained in order for the system to be beneficial for the company. Tesco’s employees on the ground have a good knowledge of the accounting system and it eases accounting and financial functions in the business. The nature of this system urges the all users to be well trained in order for the system to be beneficial for the company. Tesco’s accounting system has been well implemented as the system is functioning

By streamlining decision procedures, accounting guidelines can make the bookkeeping process better. For the easiest transactions, accounting insurance policy may be used to automate financial deals in a company's accounting system. As the work of the artificial accounting systems still must be examined by accounting staff, this technique should be less time-consuming than undertaking the work by hand. Another advantage to the automation of accounting techniques is a decrease in error. Generally, the artificial accounting systems do not make typographical mistakes or transpose information. While blunders can be produced, they are usually more organized and better to spot.

Information systems changed forever the way accounting tasks are processed. The days of green paper pads are gone, and instead businesses have a centralized place where all accounting transactions are entered and saved. No more looking for paper

The Independent Internal Verification control is also being violated because the data that eh accountant has been providing has not been verified by any other personnel in your company. It is simply being recorded and reported by him only. The company’s petty cash is being handled by all employees and they are only being asked to leave a note in the drawer when it is being used. Why are all employees being allowed to have access to the petty cash fund? How do you know that it is being used to benefit the company, not the employee? Why is the cash not locked away instead of being placed in a desk drawer? This violates the Human Resources Control as well as the Physical Control. Employees who handle cash should be bonded and all cash should be locked away. Receipts or other means of record keeping should be provided when petty cash is used, not notes left in the drawer. The company does not have individual passwords assigned to employees for computer use. This also is a violation of Physical Controls. Thorough background checks are not being done on employees before they are hired. This violates the Human Resources Control. If this had been done, the employee that had been convicted of child molestation would have never been hired. The accountant should not be interviewing and approving new hires. This goes against the Establishment of Responsibility control. The accountant has too many roles within the company that should be assigned to

Risk management of his family and property to reduce the effect, usually at the end of a special task force to organize a relative or related words, prosperity and security risk or in crisis, to identify and evaluate a high priority. You threatened the welfare administration and strategy, as well as some pieces of the owner to ensure safety needs help.

It has been observed that the company is violating the principle of control activity of segregation of duties. The accountant is acting as the treasurer and controller. In this dual role, he purchases all of the supplies and pays for these purchases. He also receives the checks and completes the monthly bank reconciliation. Various frauds are possible when one person handles related activities. These duties must be segregated to multiple personnel.

As computer technology changes at such fast phase, many businesses sectors try to cope up by upgrading computer system constantly in order to stay competitive. The multi function ability of technology for its advance system is also an important factor for a company to use software. It makes efficient use of the advance technology and has ambition to discover more. Computers have the great impact on the profession of accounting. With the rapid growth of technology today, there is no doubt that computer will become a common asset in all profession.