Sunday, June 18, 2023

Developing Accounting and Auditing Systems | School Administration and Supervision

QUESTION

How technology is helpful in auditing and accounting systems in school?

Course: School Administration and Supervision
Course code 8616
Level: B.Ed Solved Assignment

ANSWER

Developing Accounting and Auditing Systems

Over the centuries, traditional ways were used to keep accounts. Calculators, pens, and a set of paper books were the basic ingredients of this system. But in today's changing world and computerization era, there is no need to take these manual ways.

Computer systems perform these basic tasks in a flash and keep up to date and increase efficiency and accuracy eventually leading to saving time and money.ICT is the basic ingredient for efficient financial management. Nowadays traditional accounting and audit systems have been replaced with technology-based accounting and audit systems. Astonishing progress in information technology based on the use of computers and electronic communication systems has emerged the need for the development and application of ICT-based accounting and audit systems in the field of educational management and administration. The latest technology-based accounting information systems are designed to provide the integration of knowledge and sets of skills to face new challenges and opportunities in the world of information technology and to deal with them.

Financial management and audit are the basic components of every organization including education. So, it is an essential task for educational administrators and managers to keep the record correct and up-to-date. To meet the challenges of the time and to make the system efficient and faster it is necessary for administrators and managers to develop computer-based accounting and auditing systems. Computers are used in accounting for storing and analyzing financial data, automation, accuracy, data access, and reliability.

Computerized accounting systems are software programs that are stored on a company's computer, or network server, or remotely accessed via the Internet. Computerized accounting systems allow to set up of income and expense accounts, such as rental or sales income, salaries, advertising expenses, and material costs. They also can be used to manage bank accounts, pay bills, and prepare budgets. Depending upon the program, some accounting systems also allow you to prepare tax documents, handle payroll, and manage project costing.

Computer-based accounting and audit systems normally include using basic office productivity software such as spreadsheets, word processors, and text editing programs and more advanced software packages involve the use of statistical analysis and business intelligence tools. It helps analyze large amounts of data as compared to traditional systems. Auditors can extract every transaction performed during the period reviewed and can test data to determine any problem. Computerized accounting and auditing systems now become a basic necessity and no longer a luxury for administrators and managers. Computerized auditing systems facilitate a more granular analysis of data and help to determine the accuracy of the information.

Application of Technology in Accounting

1. To Keep Accounting Records of Big Companies is Possible

It is so easy to keep unlimited accounting records without any risk of forgetting.

There is a variety of programs used for this purpose.

2. Separate Payroll Accounting is Possible

We all know the top costly expense is the salary of employees. So, it must be recorded separately. The computer can help with this. Anytime any edit regarding salary, name, or any other adjustment in payroll is possible.

3. Automation of All Financial Accounts

Just go to any computerized account office. In its computer system, there are lots of financial statements and other accounting reports. How can an organization quickly send its financial statements to the CA office for an audit? The answer is very simple. Everything is connected to the computer. If the accountant passes voucher entries, financial accounts will automatically be created by computer software.

4. Graphic Presentation of Accounting Results

The computer can be used for the graphic presentation of accounting results. You can see the sale trend graphs, charts, and diagrams. Not only the sale trends but you can see anything in the accounting area through graphics way. It will so easy and understandable instead of reading only manual financial results.

5. Updated Fastly

If there is any mistake, we can easily correct it. All the accounts will automatically be corrected. In manual accounting, it is not possible. There are lots of options that can help more quickly by providing updated accounting reports. For example, a computer reminder system can send updated debtor balances to the customer.

6. Best Inventory Control

Recording every small item on the computer is so easy without keeping big inventory registers. By comparing computer records of inventory and actual inventory, anytime, we can check the difference and find the reason behind this difference. In simple words, the single computer has saved the cost of keeping a hundred accounts clerks. Without any errors, the computer can record millions of transactions.

Advantages of Computerized Accounting System

i. It can generate financial reports automatically at the end of the financial year.

ii. It eliminates paperwork.

iii. It makes the accounting system easier, faster, and more proficient.

iv. It provides up-to-date information.

v. It provides motivation and quick feedback.

vi. It gives accurate results.

vii. It eliminates time and cost. Computerized accounting and auditing systems have some disadvantages also. They require expertise, cost, and extra software for its effectiveness.

Procedures for Computerized Auditing

Preparation for Computer Processing

After an organization to be audited by using computers is selected, the content of its operations as well as documents on computerized systems is to be examined.

The following are the kinds of data to be obtained for examination:

a. types of computers in use as well as how they have been introduced,

b. types and contents of programs,

c. types, contents, and formats of data files,

d. types, contents, and formats of output,

e. procedure manuals describing operations (operation manuals and others),

f. organizational chart and staffing table of the computer department (manager, SE, programmer, operator, keypunch operator, and others), and

g. Information on data in general (period of storing data, number of cases, recording modes, and others).

Preparation of a Checklist

Based on the examination described in (i), lists of items to be inspected (checklist) are prepared. Lists may be prepared by picking out adequate items from existing general inspection manuals or by studying operation manuals of the organization under audit and deciding on items to be checked. Checklists are usually prepared by a combination of these two methods. These checklists are classified into some groups and placed in the order of priority to facilitate the preparation of audit programs.

Data Processing

There are some preparatory works to be done before actual processing by computer. External works include acquiring data files to be processed, renting computers, and other supporting staff. Internal works include a study on processing schedule, assignment of personnel, designing of input and output data formats, system designing as well as preparation of block diagrams and others, coding, card punching, and debugging. These works may be completed one after another, or be carried out simultaneously. To well manage the progress of these works, a time schedule should be prepared beforehand to make sure that each work is completed as has been planned. Reports on the result of computerized audit processing will be analyzed and studied. Then an additional step such as the preparation of letters of inquiry may be taken to bring the audit findings into the annual audit report, if necessary.

Audit Methods

Test-data method

Detailed examination of selected programs and reprocessing of selected data with these programs Use of general-purpose programs.

Advantages of Auditing Techniques

 Examination of data is more rapid

 Examination of data is more accurate

 The only practical method of examining large amounts of data

 Provides new opportunities to the auditor

 Test large amounts of data within the flash of time.

 It is cost-effective.

 Comparison becomes easy and accessible.

B.Ed Helper | Teacher Education [Student-Teacher-School-Society]

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