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

IT SYSTEMS OF FIXED ASSETS PROCESSES (STUDY OBJECTIVE 7)

The complexities of the fixed asset processes described earlier indicate the obvious fact that information technology is a friend of the fixed asset processes. More and more companies are using specialized asset management software programs instead of spreadsheets or traditional manual systems. Due to the abundance of fixed asset data, the time-consuming and tedious requirements for tracking changes, and the intricacy of the tax laws, most companies can justify the investment in computerized systems dedicated to fixed asset accounting. IT systems have evolved into simple, customized applications that may be integrated with other accounting software. These fixed assets applications automate the processes of creating and maintaining the financial records and tax documents required for adequate fixed assets management.

The benefits of automated fixed asset systems are numerous. Most companies would find it much more expensive and time consuming to manage their fixed assets by manual procedures or spreadsheets than by purchasing and implementing fixed asset software. The shortcomings of a spreadsheet-based system are as follows:

• The design of spreadsheets is very time-consuming. In addition, most companies have complex structures that are nearly impossible to replicate in spreadsheets. For example, the multiple categories and locations of fixed assets require detailed design and linkages that are very difficult to maintain in ...