Question

"Conceptual Framework" Please respond to the following: Imagine that you are the manager of Information Technology department working on a system conversion for an Accounting Department. Consider the activities in Accounts Payable and Accounts Receivables, and identify those duties that may be incompatible for a manual system but highly effective in an automated system. Compare and contrast the general and application controls used in both systems. Recommend an approach to automating the process. Explain your answer. Assess the risks that are inherent in automating manual accounting systems to an IT environment, giving consideration to the factors that influence supervision, the firm’s obligation to maintain adequate accounting records, and transaction integrity. Recommend a strategy to minimize the risk. Provide support for your recommendation.

Answer 1

Accounts payable is the debt from a company to its creditors which is regarded as a liability in the Balance Sheet of a company. Accounts receivable is the opposite of Accounts Payable and it is considered as Current Asset (Salek, 2005).

The accounts payable is usually operated in most cases on a monthly cycle of accounting. Invoices are recorded on Daily basis with also recording the Adjustments if Required. Computerized Accounting Software as ensured that the recording of transactions on a timely and fast manner.

This Software helps to record even the complex transactions with accurate calculations and it also generates the report.

However manual accounting systems requires qualified accountants who are in a position of keeping a record of the different transactions of the business. A computerized accounting requires accountants who can effectively manipulate specific software in producing results for an accounting entity. The various computer software that are used in accounting do the calculation very much promptly. However, they do not know what one needs until they are in a position of explaining clearly what information they need through the different applicable commands of the software (Salek, 2005).

A computerized accounting provides effective internal control reporting systems for a period of time very fast while the manual systems takes significantly more time because of the fact that the accounting information and records are being analyzed manually. I would recommend a BlackLine Accounting Process Automation as an approach to system automation. This solution improves the speed, the reliability as well as the accuracy of the accounting information that has been presented. This is enabled through automation of the routine as well as the high-volume transactions through configurable certifications and analysis models.

Biggest Risk of Computerized accounting is the lost of data so always backup is required to ensure those are safe (Perry & Schneider, 2005). This is opposed to a manual accounting system where the data and information are usually contained in the hard copy form for purposes of reference. Supervising an automated accounting system might seem a heel of work because an accountant simply keys in the information when they are not being supervised and could even generate reports that have been falsified.

There is the risk of not having accurate accounting records if physical records are not maintained or kept properly (Perry & Schneider, 2005).

It Should always be ensured that the all the recording of transactions should be supported by physical documents. This will help boost the integrity of the accounting records and data as well as act as evidence in the event that the information systems of the organization have been compromised.