Accounting Information Systems: The Processes and Controls, 2nd Edition

IT-ENABLED SYSTEMS OF REVENUE AND CASH COLLECTION PROCESSES (STUDY OBJECTIVE 5)

The previous section described the processes related to revenue transactions. In addition to the activities that take place within those processes, there must also be accounting systems to record, summarize, and report the results of the related transactions. In the majority of organizations, the accounting information system consists of hardware and software within IT systems. However, there is such great variety in accounting software systems in terms of their size, complexity, and extent of automation that it is impossible to describe all of the various kinds of systems. In general, as complexity and automation increase, there are fewer manual processes and more computerized processes. This is usually true regarding size also: Larger IT systems generally have fewer manual processes and more computerized processes. More computerized processes means there would be a greater need for the type of IT controls described in Chapter 4, and it generally means that there are fewer paper documents within the process. As a simple illustration, consider two kinds of restaurants you might visit. A small, family-owned restaurant might not use computers at all, and the server may simply write your order on a pad. On the other hand, a large restaurant chain might have a system completely based on computers, where servers enter orders on the touch screen of a handheld device that transmits the order to the kitchen. ...