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Essay on Computerized Accounting System

The essay is on a computerized accounting system and its importance in...
Course

Management Information System (MIS 105)

108 Documents
Students shared 108 documents in this course
Academic year: 2018/2019
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Masnoon Ahmed
North South University
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Essay on Computerized Accounting System

Table of Contents

1............................................................................................................................................

2 Main body.............................................................................................................................................

(a) Computerized accounting system assistance towards business..............................................................

i. Positive impacts that computerized accounting system brings to the business.................................

  • 1............................................................................................................................................
  • 2 Main body.............................................................................................................................................
  • (a) Computerized accounting system assistance towards business..............................................................
    • i. Positive impacts that computerized accounting system brings to the business.................................
    • ii. Accountants benefit from the engagement of a computerized accounting system...........................
  • (b) Controls that are being used in the accounting system and their benefits...............................................
  • (c) Main contributions of the payroll system and the pros and cons of the inventory and billing system....
  • 3 Conclusion.............................................................................................................................................
  • References...................................................................................................................................................

easily with computerized system. The management can obtain the necessary accounting and financial information more easily with a computerized accounting system. Hence, management decision-making processes are stimulated and become more efficient.

The computerized accounting system not just helps in obtaining accounting information quickly but it also supports getting the complex report to reinforce management decisions. The business documents like purchase orders, invoices, salary slips, etc. can be produced more rapidly with computerized system. Apart from this, several accounting reports are updated automatically as well as available instantly with the help of this system. As the computerized system helps the management in getting necessary accounting and financial information more quickly, hence it supports in making better management decisions. In these ways, this system has brought important optimistic impacts on business organization[ CITATION Mou15 \l 1033 ].

ii. Accountants benefit from the engagement of a computerized accounting system...........................

The accountants are significantly benefitted by the engagement of a computerized system of accounting. The system supports accountants to store as well as access the financial data more quickly and efficiently. The accountants can make the necessary changes very quickly to provide essential financial reports to the management. It alleviates the requirement of keeping the paper files, which are often terrifying to the accountants. The computer has huge storage capacity and the information on the computer can be gathered instantly. It also supports the accountants to get the necessary financial and accounting information more quickly. As the computerized accounting system is very fast, thus it saves the time of the accountants, hence they get adequate leisure time. The business transactions can be entered into the system quickly. Moreover, the computer system uses to post the transactions accordingly. The bookkeepers or accountants can be able to process more accounting information as quickly as possible by using the formulas as well as can verify the computed totals and hence it leads to minimizing errors[ CITATION Mor18 \l 1033 ].

The computerized accounting systems are generally customized by the specific industry and thus allow the bookkeepers and accountants to use the existing templates for the general ledger entry. It supports the business organization in staying organized. While the accounting or financial information is entered into the computer system it supports obtaining the information more easily. It supports the accountants to store huge accounting information within the system and

they can be accessed very quickly at the time of requirements, unlike paper files. The reporting is becoming easier by the uses of this system so that accountants can deliver the necessary reports promptly to the management.

(b) Controls that are being used in the accounting system and their benefits...............................................

For the control of the accounting system, an internal control system is being attributed that monitors, measures and directs the resources of the organization in regards to accounting and auditing. The five most important components of this internal control system in account maintenance are risk assessment, communication and information gathering, monitoring and controlling of the environment and some of the specified activities. At the managerial level, the internal control's objectives recount the consistency of monetary reporting, timely criticism on the accomplishment of outfitted or some tactical goals. Along with this, another attribute is acquiescence with laws and policies. This internal control usually involves identifying cases in which robbery or some kind of loss could take place and determine if the presented control events efficiently supervise the risk to a satisfactory level. The evaluation of internal controls are made and changed to build a big business procedure to run further successfully and effectively. For example, the automation of some controls that are physical in nature can accumulate costs and perk up processing the transactions for dealing out. The board of the administrators in an organization provides immense guidance to the management for the holding of the internal controls as they are the working knowledge of the organization.

Improvements that could be done in regards to this accounting attribution towards business is segregating the accounting duties, restricting access to the financial system and increasing the oversight the small businesses generally depend on A bookkeeper or on one worker to ensure that all aspects of the accounting system are well maintained. The processing of cash recipients and the processing of the payments should segregate within two different people. This will decrease the happenings of fraud. It is also prudent to alternate persons executing the activities for the aforementioned activities occasionally. The access restriction to the financial system will remove the probability of a person creating fake entries and casing up their tracks [ CITATION sig18 \l 1033 ]. An internal control without oversight is not a fine adequate thing. A suitable

kind of hassle and one can profoundly defend the bill by password protection process. The system is user-friendly and greatly beneficial for the bill generators. This saves time than the traditional billing system and the loss in the bill is also being reduced through this system. Most of the systems of billing are outsourced from online process. The outsourcing of these billing results in the generation of some kind of fees through which one can easily use the billing system. This is one of the advantages of this system. The securitization and safety is another negative side of this system. As this is an online system so hacking is a very common aspect. The downtime of the internet also creates some of the major hindrances in electronic billing[ CITATION sus18 \l 1033 ].

3 Conclusion.............................................................................................................................................

The computerized accounting system is a very eminent kind of system in the new era and it has some of the controlling units that help the business management in a fruitful manner. In this paper, some of the aspects of the computerized accounting system are being discussed with some examples to get a proper view of the points. The role of the accountants in regards to this accounting system is also being broadly discussed with some latest development in this trend. The internal control system is also being explained wholly. Lastly, the paper discussed the contributions of the payroll system which is one of the efficient tools in this accounting system along with the advantages of the inventory and the billing system. It is also equally playing a great role in maintaining accounts for a business.

References Lohrey, J. (2018). What Are the Negative & Positive Impacts of Computerizing an Accounting Department? Retrieved from smallbusiness.chron: smallbusiness.chron/negative-positive-impacts-computerizing-accounting- department-31404

Reddy, C. (2018). Inventory Management: Features, Objectives, Pros and Cons. Retrieved from content.wisestep: content.wisestep/inventory-management-features-objectives- pros-cons/

Rush, M. (2018). The Advantages of Manual or Computerized Accounting. Retrieved from smallbusiness.chron: smallbusiness.chron/advantages-manual-computerized- accounting-4910

Shenoy, S. (2019). Here's how a good payroll management system can benefit your startup in the long run. Retrieved from yourstory: yourstory/2019/06/employee-payroll- management-system-startup

Shiraj, M. M. (2015). THE IMPACT OF USING COMPUTERIZED ACCOUNTING SYSTEMS (CAS) IN FINANCIAL REPORTING AMONG SMES: SPECIAL REFERENCE TO THE SOUTH EASTERN REGION, SRI LANKA. Retrieved from seu.ac: seu.ac/researchandpublications/symposium/5th/abstract/businessandmanagement/ 16

signatureanalytics. (2018). 5 Ways to Improve Internal Accounting Controls and Oversight in Your Business. Retrieved from signatureanalytics: signatureanalytics/5-ways-to- improve-internal-controls-and-oversight-in-your-business/

sushindiawriters. (2018). The Advantages And Disadvantages Of Electronic Billing. Retrieved from sushindiawriters.wordpress: sushindiawriters.wordpress/2012/12/24/the- advantages-and-disadvantages-of-electronic-billing/

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Essay on Computerized Accounting System

Course: Management Information System (MIS 105)

108 Documents
Students shared 108 documents in this course

University: North South University

Was this document helpful?
Essay on Computerized Accounting System

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