Accounting Cycle Description Paper
An organization’s accounting information system includes roll uping information so spliting the information into rhythms. This paper will place the five accounting rhythms and specifically how Riordan Manufacturing uses the outgo rhythm. The strengths and failings of the internal controls related to the outgo rhythm will be examined. This paper will explicate how to incorporate the outgo rhythm into an enterprise-wide accounting information system. The assorted types of information systems necessary to accomplish this integrating will be illustrated. Last. this paper will show the flow of accounting information through Riordan Manufacturing.
Accounting Cycles
The five accounting rhythms are the gross. outgo. funding. fixed-asset. and transition rhythms. Each has its specific map within the accounting system. Almost every company uses the first four accounting rhythms. non all will utilize the transition rhythm. As a company grows. it is of import for direction and employees to understand the grounds for each accounting rhythm and ways the information needs to flux. The accounting rhythms build upon each other. Without the gross rhythm. none of the other rhythms would come into drama. Once a company has gross bring forthing activities. the outgo rhythm is necessary to pay the measures incurred in producng the goods required for the gross rhythm.
The funding rhythm is necessary to give the company handiness to buy the necessary edifices and machinery for production along with doing certain there are financess for the stockholders. The fixed-asset rhythm records depreciation on the edifices and machinery along with the disposal of said points. The transition rhythm is of import to fabricating companies who use cost accounting to find production costs. Table 1 ( UOP. 2009 ) . explains each stage of the accounting rhythm and what paperss and ledger histories are affected by that rhythm.
Beginning: University of Phoenix Week 1 “Read Me First”
Riordan Manufacturing uses the outgo rhythm by bring forthing purchase orders and having studies to track their purchases. Riordan so uses these paperss to bespeak payment for the purchases. Riordan uses HRIS to maintain path of employee hours. wage rates. holiday and vacation clip so uses this information to bring forth paysheet cheques. The company besides has gross revenues forces who submit expense studies for reimbursement of disbursals incurred during gross revenues calls. Riordan Manufacturing uses buying and paysheet records to find the sum of revenue enhancements necessary to pay for gross revenues revenue enhancement. FICA. FUTA. SUTA and any other revenue enhancements due.
Internal Controls
In order to run into ends and aims. organisations such as Riordan Manufacturing. set up internal controls. Internal control is the program of organisation and methods a concern uses to safeguard assets. supply accurate and dependable information. promote and better operational efficiency. and promote attachment to order managerial policies. Torahs. and ordinances ( UOP. 2009 ) . In looking specifically at the outgo rhythm. Riordan Manufacturing has both strong and weak internal controls.
Strengths include internal controls in operations and quality control. To guarantee consistence of operations and quality control. Riordan Manufacturing manages grosss of natural stuffs. paths merchandise. and histories for finished goods stock lists. Internal controls include the gross revenues section finishing the gross revenues orders and come ining them into client transportation and charge system. Transporting so loads the gross revenues orders and stock list clerk updates the stock list system based on those transporting paperss. Another illustration is the production studies. They include a undertaking name. document history including the alteration day of the month. blessings. and distribution. Undertaking history informations is archived in an sanctioned location.
However. failings in Riordan Manufacturing’s human resource section are abundant. Employee files are kept by single directors alternatively of by human resources in a cardinal employee file country under lock and cardinal. Changes to personal information such as name. matrimonial position. and freedoms are submitted by employee directors which should be requested by employees non their directors. A third-party supplier keeps its ain records of employees on workers’ compensation but Riordan does non. Excel spreadsheets which include preparation and development records. applicant information. and single compensation determinations are kept in unsecure countries and accessible to anyone
. Enterprise-wide
In order to incorporate the outgo rhythm into an enterprise-wide accounting information system. Riordan direction should analyze the human resource section method of managing employee records. For case. in an enterprise-wide system. the accounting information system should concentrate on four aims including strategic. operations. coverage. and conformity. In order for a concern procedure direction system to be implemented. the directors of the company demand to measure certain standards of the human resource section which can impact the outgo rhythm. First. direction needs to place the aims of the human resource section in respects to employee records. This has a direct impact on the strategic aim of the enterprise-wide system.
Second. the input map needs to be reevaluated. For case. since the company has four different subdivisions. all input informations should be on one method of input. This analysis and pending action would increase the operations map. Third. end product clip would radically increase for all four subdivisions. The types of end product Riordan should see are the conformity and describing aims of the enterprise-wide system. Furthermore. to hold the outgo rhythm implemented. this would diminish the sum of clip that Riordan is taking to describe disbursals.
Necessary Information Systems for Integration
The assorted types of information systems necessary to accomplish this integrating would include analysing the followers: hardware. package. informations. people. and processs ( Bagranoff. Simkin. and Strand. 2008. ) Three types of controls necessary to maintain in head include preventative. investigator. and disciplinary. The company has already established computing machine hardware for each of the four subdivisions. In order to find a package accounting plan. the company needs to set up policies and processs in respects to beginning paperss. This has a direct impact on the information that is accumulated for the company.
In order for paysheet processing to take consequence. personal action signifiers and employee paysheet tax write-off mandate signifiers should be established. Riordan should see a SOX Assurance and Compliance Application. Additionally. lone directors should hold entree to company records. All records. electronic or difficult transcript should be kept in one cardinal location. therefore the usage of privateness direction information package. Furthermore. policies and processs for all sections should be retained with a records direction system.
Flow of Accounting Information
The flow of accounting information sing stock list begins with a log of natural stuffs and transportation paperss which are supervisor approved and taken to an stock list clerk who enters the information into the stock list system. Once entered into the stock list system. accounting forces can pay supplier bills. An stock list usage signifier is provided by the fabrication staff to the stock list clerk to be entered into the stock list system which tracks natural stuffs and subassemblies. Manufacturing besides provides the stock list clerk with an stock list signifier accounting for subassemblies and concluding merchandises when added into the stock list system. In the concluding merchandise transportation procedure. gross revenues orders are created and entered into the client transportation and charge system. Transporting prepares the tonss harmonizing the gross revenues order information generated and ships consequently. Then accounting can fix the bill after fiting the gross revenues order with the stock list system which illustrates the goods shipped.
Each of the three runing entities of Riordan Manufacturing has their ain accounting system. Therefore the systems are non compatible which makes the consolidation of information at the corporate office hard and labour intensive. Much information is conveyed via electronic mail and spreadsheets. Employee personal information alterations are requested through a written signifier and are entered into the system by the paysheet clerk.
Decision
The five accounting rhythms in an organization’s accounting information system and specifically how Riordan Manufacturing incorporates the outgo rhythm into its system was explained. Strengths and failings of Riordan’s internal controls related to the outgo rhythm were commented on. This paper explained how the outgo rhythm could be integrated into an enterprise-wide accounting information system. The assorted types of information systems necessary to accomplish this integrating were illustrated. Finally. the flow of accounting information through Riordan Manufacturing was demonstrated.
Mentions
Apollo Group. Inc. ( 2006 ) . Riordan Manufacturing. Accounting Information System 1 – overview. Retrieved March 11. 2009. ACC340-Accounting Information Systems Processing. hypertext transfer protocol: //ecampus. Phoenix. edu/secure/aapd/cist/vop/Business/Riordan/RioMfgHome002. htm Bagranoff. N. . & A ; Simkin. M. . & A ; Strand. C. . ( 2008 ) . Core Concepts of Accounting Information Systems ( 10th ed. ) [ University of Phoenix Custom Edition E-text ] . New York. New york: Wiley. Retrieved from University of Phoenix. ACC/340 Accounting Information System 1 Web site. University of Phoenix ( 2009 ) . Week five overview. Retrieved March 12. 2009. from University of Phoenix. Week Five. resource. ACC340-Accounting Information Systems 1 Course Web site. University of Phoenix ( 2009 ) . Week one overview. Retrieved March 12. 2009. from University of Phoenix. Week One. resource. ACC340-Accounting Information Systems 1 Course Web site.
