Manual and computerized system

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Accounting system according to an Italian monk, Luca Pacioli , is the combination of personnel records and procedures that a business uses to meet its need for financial data. Financial accounting also encompasses the summary of information and presentation of periodic reports such as profit and loss statement and balance sheet.

The historical firms of accounting were of different degree of sophistication according to the need and techniques of the time. This is why modern accounting is based on the double entry system and the recognition of the dual nature of each transaction and this gives a co-ordinate support for the control of all the transaction of a business.

Accounting system according to business dictionary is an organized set of manual and computerized accounting methods, procedures and controls established to gather, record, classify, analyze, summarize, interpret and present accurate and timely financial data for management decisions. In spite of this, there are policies for reporting on an organization performance and current conditions. These policies increase the usefulness of report including their reliability and comparability.

The policy that makes up acceptable accounting practices are determined by many individuals and groups and those policies are referred to as generally accepted accounting principles GAAP. The financial Accounting standard Board FASB is another body or group that is seen as an independent group of seven full-time members with a large staff. This body has issued six statements of accounting concepts which help in guiding accounting standard setting.

They include investors, government agencies, politicians, unions, lenders and other business and non-business organizations. Furthermore, there are two major types of methods used in recording accounting information, such methods are manual accounting system and software accounting system or computerized accounting system. Manual accounting system extends and includes the method of processing, recording, journalizing transactions posting to the ledgers and preparing the financial statements which provide decision makers with useful information in making decisions.

These decisions relate to the allocation and use of scarce economic resources such as money, land, labour and capital. These manual accounting systems are wholly used for preparing income tax returns, reports to managers, bills to customers and other forms of providing accounting information.

In addition, with manual accounting system, accountants and managers usually inspect the documents, journal ledgers and reports in the performance of testing and verification. Transaction can be traced from source documents to journals, general ledgers, printed report etc. Subsidiary ledgers can be posted and the total can be compared with control accounts. It is visually observed by the auditors or accountants to determine whether proper books of accounts or is being followed.

Technology is a main part of our modern society and business practices. It also plays a major important in accounting as it help in reducing the time, effort and cost of record keeping while improving clerical accuracy. Technology has distinct the way we store, process and summarize large masses of data which makes accounting free to increase its field.

The origin of software could be dated back to early s. Historically, emphasis in computer industry was on programming and was seen as the biggest single problem in the implementation of a computer system.

Computer has the ability to add and subtract, but frequently not to multiply or divide, the computer run with relatively simple software routines. However, this study tends to analyze the comparison between manual accounting and software accounting which are the two types of accounting system used by various organizations and companies.

In recent times, most companies and organizations have been using the manual form of operations in their accounting systems. Primarily, this manual accounting systems used to meet the organizational information requirement but this has been on consistent failure in recent times as a result of growth and diversification of business and technological advancement complexities in information technology to meet the current business demands.

Thus, companies and organizations had usually been faced with a number of problems in the use of this manual accounting system which involve lack of ability to handle sufficient volume of data in terms of speed and accuracy, insufficient data storage and retrieval system often resulting in loss of vital records, incorporating final updates, rampant report of frauds and forgeries in the use of the system, unseemliness of information which implies that information needed for effective decision making.

This is repeatedly, as a result of poor retrieval and inability to collect large volume of data within the required time. All these problems include consequence in great loss of scarce resources and impeded organization growth, steadiness and advancement. Hence, in attendance to affect these problems related with the manual accounting system and substitute it with the development of an integrated accounting software system where financial and non-financial accounting transaction are recorded, analyzed, retrieved, reported, interpreted, summarized and processed.

The main objective of this study is a comparative analysis of software accounting system and manual accounting system. The study aims at ascertaining the following objectives:. To evaluate whether frauds and forgeries are encourage in computerized accounting system i. To examine whether software accounting system can handle large volume of data than the manual accounting system.

To study whether the use of software accounting system increases effectiveness and efficiency in organizations or companies than manual accounting system in reducing the amount of funds lost through frauds and forgeries. Develops solution by preparing and evaluating alternative workflow solutions.

Controls solution by establishing specifications; coordinating production with programmers. Validates results by testing programs. Ans: Change Agent: The analyst may be viewed as an agent of change. A candidate system is designed to introduce change and reorientation in how the user organization handles information or makes decisions. Then, it is important that the user accepts change. Ans: Systems development methodology: A standard process followed in an organization to conduct all the steps necessary to analyze,design, implement, and maintaininformation systems.

Systems development life cycle SDLC : The series of steps used to mark the phases of development for an information system. Systems Analysis : Phase of the SDLC in which the current system is studied and alternative replacement systems are proposed. Internal documentation: System documentation that is part of the program source code or is generated at compile time. Phase should not be considered complete until documentation is done. Coding should not be considered done unless its has required comment lines.

Ans: There are various techniques to gather data and facts of system. Ans: Feasibility studies are almost always conducted where large sums are at stake. Also called feasibility analysis. A feasibility study is conducted in order to determine the success and minimize the risks related to the project. When it becomes certain that the specific project could be carried out profitably view more.. Recommended Posts: Feasibility study and its importance Types of feasibility studies and feasibility reports System Selection plan and proposal Prototyping Cost-Benefit and analysis -Tools and techniques Scope and classification of metrics Software measuring process and product attributes Direct and Indirect Measures, Reliability What Is Information Systems Analysis and Design?

Previous Page. Oct 26, Next Page. Any query? Free PDF's 1. Download Chemistry notes 2. Download Physics notes 3. Download Mathematics notes 4. Download JEE Books 5. Download Coaching Class Materials 7. Determine how the firm responds when an alarm is activated. This should be covered in the firm's standard operating procedures. Determine the types of alarms lights, buzzers, whistles, etc.

Are they tested periodically and equipped with in-line monitoring lights to show they are ready? Because an activated alarm may signal a significant out of control situation it is important that such alarm activations are documented. Determine how alarm soundings are documented-in batch records, in separate logs or automatic electronic recording, for instance.

Can all alarm conditions be displayed simultaneously or must they be displayed and responded to consecutively? If an employee is monitoring a CRT display covering one phase of the operation will that display alert the employee to an alarm condition at a different phase? If so, how? How a computer controlled process is handled in the event of computer shutdown e. Shutdown recovery procedures are not uniform in the industry. Some systems, for example, must be restarted from the initial step in the process sequence and memory of what has transpired is lost.

Other systems have safeguards whereby memory is retained and the process is resumed at the point Determine the disposition of the computer's memory content program and data upon computer shutdown. Determine the firm's shutdown recovery procedure and whether or not, in the event of computer failure, the process is brought into a "safe" condition to protect the product. Determine such safeguards and how they are implemented.

Where is the point of restart in the cycle--at the initial step, a random step or the point of shutdown? Look for the inappropriate duplication of steps in the resumption of the process.

The time it takes to resume a computerized process or switch to manual processing can be critical, especially where failure to maintain process conditions for a set time e. Therefore, note recovery time for delay-sensitive processes and investigate instances where excessive delays compromise product quality or where established time limits 21 CFR Many systems have the ability to be run manually in the event of computer shutdown.

It is important that such back-up manual systems provide adequate process control and documentation. Determine if back-up manual controls valves, gates, etc.

Records of manual operations may be less detailed, incomplete, and prone to error, compared to computerized documentation, especially when they are seldom exercised. Therefore, determine how manual operations are documented and if the information recorded manually conforms with CGMP requirements.

In general, the hardware of a computer system is considered to be equipment within the meaning of the CGMP regulations. Therefore those sections of the regulations which address equipment apply to hardware. For example, the following apply:. In general, software is regarded as records or standard operating procedures instructions within the meaning of the CGMP regulations and the corresponding sections of the CGMP regulations apply, for example:.

In some cases it may be reasonable to copy a disk or tape whereas in other cases it might not, particularly where we would have to physically remove the disk or tape from the establishment in order to copy it. Consider the analogy of removing an entire file cabinet so that we can copy five pieces of paper. We believe that, rather than copy an entire disk or tape ourselves, it is preferable to have the firm generate hard copies of only those portions of the disk or tape which we need to document.

There are several factors which must be considered on a case by case basis in determining what is reasonable in accessing a firm's computer. For example, the effect on drug production is a factor; specifically, if the process of running a program disrupts drug production in an adverse manner then that would be unreasonable.

Another factor is whether or not our manipulations give us access to unauthorized information; the data we may be searching with a program may contain some information we are not entitled to review such as financial data. Consider also that some computer programs are protected by copyright and carefully licensed to software users; thus, we would not be able to copy and use such programs without prior approval of their owners.

Return to: Page Top Inspection Start. A switch pattern which identifies the location of a piece of data or a program step. A systematic procedure or equation designed to lead to the solution of a problem in a finite number of steps. Continuous signal having a voltage which corresponds to the monitored value. Term used to describe software written to perform tasks on a computer. American Standard Code for Information change; a system used to translate keyboard characters into bits.

Program which translates assembly code to executable machine code; e. Symbolics, a simple language; different computers have different assembly codes. Term used to describe the exchange of information piece by piece rather than in long segments.

The rate at which data is received or transmitted in serial: one baud is one bit per second. Binary Digit; the smallest unit of information in a computer, represented as 0 or 1, off or on for a switch.

An initialization program used to set up the computer when it is turned on. A sequence of adjacent bits, usually eight, operated upon as a unit; the lowest addressable unit in a computer. Program which translates a computer language into executable machine code. A compiler translates an entire program before the program is run by the computer. Control Program for Microcomputers; a registered trademark of Digital Research; an operating system. Central processing unit of a computer where the logic circuitry is located; the CPU controls the entire computer; it sends and receives data through input-output channels, retrieves data from memory and conducts all program processes.

A circular rotating magnetic storage device. Disks come in different sizes and can be hard or flexible. Erasable programmable read only memory: switch pattern in circuit can be erased by exposure to ultraviolet light.

Set of related records treated as a unit, stored on tape or disk; synonymous with data set. The base 16 number system. This is a convenient form in which to examine binary data because it collects 4 binary digits per hexadecimal digit.

Decimal 15 is in binary and F in hexadecimal. Small wafers of silicon etched or printed with extremely small electronic switching circuits; also called CHIPS.

An application in which each entry calls forth a response from a system or program, as in a ticket reservation system. A device which permits two or more devices to communicate with each other.