| As many professional accountants and
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| | communication, which are assessed
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| auditors state - accounting is a language
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| | separately and put together a single rate
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| of business which is accepted in all
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| | of organization's performance. Control
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| developed and developing countries.
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| | environment means the way of
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| Every company applies accounting because
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| | organization's internal control - which
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| it is generally accepted that companies
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| | manager controls the employees, how and
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| have to reveal certain financial and
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| | whom does that manager reports next about
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| management information to the government
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| | the plan performance etc. Risk
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| and public users and of course because
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| | assessment implies measures to determine
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| accounting is indispensable tool in
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| | all the potential risks in advance, their
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| business decision-making process. With
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| | causes, probabilities and
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| the development of information
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| | counter-measures to avoid and manage
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| technologies there were developed many
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| | them; how can those risks influence
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| computer products (software) that make
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| | company's performance and financial
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| accounting as easy as ABC for those who
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| | state; how to minimize the costs of
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| uses them. From this point accounting can
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| | facing financial risks etc. Monitoring
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| be divided into two basic categories:
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| | implies quality control of company's
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| those which apply manual accounting and
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| | operations and personnel. Information and
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| those which prefer computerized
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| | communication element means the control
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| accounting systems. This paper is targets
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| | over communication flow and the quality
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| the main features of manual and
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| | of information flow within the
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| computerized accounting, their benefits
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| | organization in order to minimize the
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| and shortcomings, and their comparison.
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| | time of communication and information
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| From the accounting theory it is known
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| | losses. Internal control procedures allow
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| that accounting cycle includes the
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| | to keep companies' assets from
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| following steps: journalizing the
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| | dissipation and control productivity and
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| transactions, posting them to ledger
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| | usefulness of all departments.
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| accounts, preparing trial balance, making
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| | Buy custom essays
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| adjustment entries, preparing adjusted to
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| | Let's return to the main issue of the
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| end-of-period trial balance, preparing
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| | paper. Manual accounting implies that
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| financial statements and appropriate
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| | employees perform the whole accounting
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| disclosures, journalizing and posting the
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| | cycle manually on a periodic basis: they
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| closing entries, and preparing
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| | calculate trial balances, journalize
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| after-closing trial balance at last. From
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| | transactions, prepare financial statement
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| the first look it is not very difficult
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| | reports and other routines. Of course it
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| and it is so indeed, but when there are
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| | takes much time, resources and effort in
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| thousands or millions of transactions the
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| | large organizations. Computerized
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| situation dramatically changes. Lots of
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| | accounting implies that the only thing
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| transactions that must be processed in
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| | that employees do is recording
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| the accounting cycle make this process
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| | transactions into the computer which
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| routine and even a little mistake or
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| | processes the other steps of accounting
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| inaccuracy can cause all the cycle from
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| | cycle automatically or by a request. But
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| the very beginning in order to find and
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| | this is a very simplified view on the
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| correct the mistake. So as to shed some
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| | computerized accounting because
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| light on the matter lets examine
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| | transaction is a complex category which
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| accounting cycle more thoroughly.
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| | includes not only sales or acquisitions,
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| Buy custom written essay & term paper
| |
| | but depreciation, premiums and wages
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| Every transaction (event that change the
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| | calculation, dividends etc. So computers
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| financial resources or obligations of the
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| | provide accurate calculations and smart
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| company) must be recognized, classified
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| | reports but it takes much time, resources
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| and documented; in addition there must be
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| | and effort too and it's difficult to
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| corresponding accounts identified and
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| | assess which accounting type is more fast
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| changed. The transactions are recorded in
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| | and economic. If manual accounting
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| appropriate journals (general journal,
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| | requires qualified accountants to keep a
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| sales journal etc) with transaction data,
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| | record of business transactions,
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| affected accounts' titles, debit and
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| | computerized requires accountants which
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| credit of each affected account and
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| | can use specific software and thus they
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| explanation specified in the journal
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| | cost more. Computer software calculates
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| record. The above procedure is used for
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| | faster but it does not know what you need
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| each transaction. All the journal records
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| | until you can clearly explain what
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| must be posted to the ledger on a
| |
| | exactly you need. In addition good
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| periodic basis (daily or weekly), which
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| | computerized accounting system can cost
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| is a group of accounts put together and
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| | thousands and even millions dollars,
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| classified (assets, liabilities, revenue,
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| | depending on the complexity and the size
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| expenses and equity) - in other words
| |
| | of organization. Computerized accounting
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| general ledger summarizes all the
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| | provides better internal control report
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| transactions within a period of time. In
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| | system for any given period of time
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| addition there is a subsidiary ledger can
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| | (computer can control thousands
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| be used, which is a more detailed source,
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| | indicators simultaneously and create
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| where individual items comprised
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| | notifications to the appropriate
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| (inventory, accounts payable and accounts
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| | departments or workers if some indicators
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| receivable). General ledger contains
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| | do not correspond to the normal state),
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| controlling accounts which summarize the
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| | while manual control takes more time.
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| content of subsidiary ledger.
| |
| | Among the advantages of manual accounting
|
| At the end of accounting period with the
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| | there are: comparatively cheap workforce
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| help of general ledger there is a trial
| |
| | and resources, reliability, independence
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| balance calculated to make sure that
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| | from machines, skilled workers
|
| debit and credit are in balance (if they
| |
| | availability; the disadvantages include:
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| are not equal it means that there is an
| |
| | reduced speed, increased effort of
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| error somewhere). Then there must be
| |
| | accountants, relatively slower internal
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| appropriate adjustments made like
| |
| | control reporting, routine work and some
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| depreciation and income tax expenses,
| |
| | others.
|
| adjusted records posted to the ledger and
| |
| | Among the main advantages of computerized
|
| adjusted trial balance calculated. After
| |
| | accounting there are: high speed and
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| this there are financial statements
| |
| | mobility of reporting, reliability, no
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| should be prepared, which include balance
| |
| | routine work, increased accuracy,
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| sheet, income statement, statement of
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| | internal control system of increased
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| retained earnings and statement of cash
| |
| | productivity, easy back up and
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| flows. Then journal entries of temporary
| |
| | restoration of records; the disadvantages
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| accounts are closed to permanent accounts
| |
| | include: extremely high costs on
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| and posted to the ledger, and at last
| |
| | developing, introducing and using the
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| after-closing trial balance can prepared.
| |
| | system, special trainings for personnel,
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| In order to stay on top companies have to
| |
| | increased personnel costs, dependence on
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| analyze the performance of all
| |
| | machines etc.
|
| organizational cells (starting from
| |
| | Obviously both computerized and manual
|
| unskilled workers and operating
| |
| | accounting have advantages and
|
| personnel, and finishing with top
| |
| | disadvantages but they perform the same
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| managers and other key personnel) and
| |
| | task, and the final result is the same.
|
| discover all the deviations from the
| |
| | The main differences between them are the
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| plan, their causes, and finally
| |
| | costs, speed and mobility. Thus small and
|
| companies' management has to take
| |
| | medium businesses usually prefer manual
|
| corresponding measures to avoid such
| |
| | accounting without detriment to quality
|
| deviations in the future. These
| |
| | while large corporations apply complex
|
| procedures are called internal controls
| |
| | accounting systems which cost millions
|
| and include the following five elements:
| |
| | dollars but the effect from their
|
| control environment, risk assessment,
| |
| | application exceeds all the expectations.
|
| monitoring, information and
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| |
|
