CONTROL ISSUES

Accounting Information Systems and Control Issues

Accounting Information Systems and Control Issues

Introduction

Internal control is a function that aims to safeguard and preserve the assets of the company, prevent improper expenditure of funds and offer the assurance that no obligations shall be incurred without authorization. An information system is a set of interrelated elements that collects data, processes it and becomes information, which stores and later disclosed to users. The Accounting is an information system, as it captures, processes, stores and distributes vital information for sound decision-making in the company.

The key role played by accounting to control and organize the various activities of the company in order to meet the situation where this is located, in a flexible, timely and useful to carry out the purposes you want to perform and thus meet the objectives (www.aabri.com/).

Discussion

An accounting information system is a basic model and a well-designed information system, providing control, support, flexibility and an acceptable cost / benefit. The accounting system of Leakit regardless of the accounting system used must be run using three basic steps related to financial activities, the data must record, classify and summarize, but the accounting process involves communicating to those interested and interpretation of accounting information to assist in making business decisions.

Leakit is a part of Plumbing sector and make credit sales as well as cash sales. They have recently started selling a selection of their merchandise online using what they believe to be a secure portal. As they are facing problem in accounts receivable ledger from part of users regarding how to process certain transactions.

Basically the Revenue Cycle of a company includes all functions required to carry out change for cash, customers, products and services. These functions include taking customer orders, shipment of finished products, and the use by clients of the services provided by the company, maintain and collect accounts receivable and cash received from these. Under the Revenue Cycle is the cycle in which the physical control and property rights over resources are sold, the determination of cost of sales is an accounting function that can be identified with the Revenue Cycle (Jones & Dill, 1995, pp. 3).

Besides functions, common accounting entries, forms and important documents, etc. Revenue Cycle described below, are those that could be considered as typical of this cycle. However, it should be noted that they should serve only as a general guide to guide the auditor when carrying out the review of internal control, since the identification and determination of these functions, common accounting entries, forms and important documents etc should be made for each particular case (www.samson.de/). The objectives of internal control in Leakit are as followed:

Protect the assets of the organization avoiding fraud losses or negligence.

Ensure the accuracy and veracity of the accounts and off-balance sheet, which are used by management for decision making.

Promote operational efficiency.

Encourage monitoring of practices mandated by management.

Promote and evaluate the safety, quality and continuous improvement.

Control System Objective

Control is the activity of checking the facts of ...