Module 4 - Accounting Information Systems And Controls: Part One Flashcards
What are Accounting Information Systems?
The structures used by organisations to collect, store and process financial and accounting data
Approach that is relevant to designing and controlling any accounting information system
Step 1: Break the process down into phases
Step 2: Consider the objectives for that phase
Step 3: Decide on the relevant documentation for the phase
Step 4: Consider the ‘what can go wrongs’ (the risks)
Step 5: Design controls to address these ‘what can go wrongs’
Phases of the sales cycle?
Phase 1: Customer places order
Phase 2: Order fulfilled and dispatched
Phase 3: Customer invoiced for goods
Phase 4: Customer pays for goods
POTENTIALLY
Phase 5: Goods returned (may replace phase 4)
Phase 6: Credit not issued / refund given to customer
Phases of the Purchases Cycle:
Phase 1: Place Order
Phase 2: Receive Goods
Phase 3: Invoice Received
Phase 4: Payment for Goods
POTENTIALLY
Phase 5: Return goods (may replace phase 4)
Phase 6: Credit Note / Refund Received
What is a purchase requisition?
What department would deal with this?
A document asking for permission to purchase a high value product
Raised by user, after approval, a copy would be passed to the purchases department
What is a purchase order?
Which department deals with it?
A purchase order is raised by the purchaser to send to the seller of goods to request purchase of goods or services
Prepared by the purchasing department with a copy sent to the supplier
What is a sales order?
Which department deals with a sales order?
An internal document raised by the seller of ordered goods to record the receipt of a purchase order from a customer
Prepared by the sales team
What is a Goods Despatch Note (GDN)?
Which department deals with a GDN?
An internal form completed by the dispatcher of ordered goods confirming the goods sent out to the customer
The GDN is prepared by the warehouse with a copy sent to the finance department to initiate invoice preparation
What is a Goods Received Note (‘GRN’)?
Which department deals with a GRN?
A form completed by the warehouse as an internal document confirming the specification of the goods received
GRNs are raised by the warehouse upon receipt of goods
What is an invoice?
Which department deals with an invoice?
A document sent by the seller of goods or services to the buyer - detailing amount due, discount available, payment dates and admin details such as account number
Prepared by the finance department with a copy sent to the buyer as a demand for payment
What is Remittance Advice?
Which department deals with Remittance Advice?
A remittance advice is submitted by the buyer to the seller in association with a payment that details the nature and purpose of the payment
The remittance is sent to the seller to allow them to match the payment against the relevant invoice
What is a Credit Note?
Which department deals with a Credit Note?
A credit note is sent by a seller to a customer to cancel (or partly cancel) an invoiced charge
Credit notes are raised by the finance department and sent to the buyer
What is a WCGW?
A “what can go wrong”
What are matched to objectives?
WCGW’s
Once you have clarified objectives and identified WCGW’s what can then be implemented?
Controls
