AIS CHAP 6

• Data Processing Department


  Receives hard copy of the personnel action forms, job tickets, and time cards, which it converts to digital files
• Batch Computer Programs


  Performs the check writing, detailed record keeping, and general ledger functions
• Payroll Systems


  Run periodically (weekly or monthly), and they are well suited to batch processing
• HRM System


  Captures and processes a wide range of personnel-related data, including employee benefits, labor resource planning, employee relations, employee skills, and personnel actions as well as payroll
• Personnel or Personnel Department


  Makes changes to the employee file in real time via terminals
• Cost Accounting Department


  Enters job cost data (real time or daily) to create the labor usage file
• Fixed Asset System


  Automatically updates the fixed asset control account in the general ledger and prepares journal vouchers for the general ledger department as evidence of the entry
• Depreciation Schedule


  Stored on the computer disk to permit future depreciation calculations
• Acquisition Procedures

  Begins when the fixed asset accounting clerk receives a receiving report and a cash disbursement voucher
• Receiving Report and Cash Disbursement Voucher


  • Provide evidence that the firm has physically received the asset and show its cost
• Depreciation Schedules


  Used by the fixed asset system to record end-of-period depreciation actions automatically
• Department Managers


  Report changes in the custody or status of assets to the fixed asset department
• Disposal Report


  Formally authorizes the fixed asset department to remove from the ledger as asset disposed of by the user department
• Fixed asset acquisitions


  • Should be formal and explicitly authorized
• Management supervision


  • An important element in the physical security of fixed assets
• Payroll Department


  Reconciles information, calculates payroll and distributes paycheck to the employees
• Cost Accounting


  Receives information regarding time spent on each job from production
• GL Department


  Reconciles summary information from cost accounting ad accounts payable
• Accounts Payable


  Receives payroll summary information from the payroll department and authorizes the cash disbursements department to deposit a single check
• Production Department


  Where employees prepare two types of time records
• Personal Department


  Prepares and submits personal action form to prepare payroll function
• Payroll Processing


  Special case purchases system in which organization purchases labor rather than raw materials/ finished goods for resale
• Job Tickets


  Captures time that individual workers spend on each production job
• Time Cards


  Captures time the employee is at work
• Fixed Assets


  • Permanent item that represent the largest financial investment by the organization
• Fixed Asset System


  Processes transactions pertaining to the acquisition, maintenance, and disposal of fixed assets
• Asset Acquisition


  Usually begins with the departmental manager or user recognizing the need to obtain a new asset or replace an existing one
• Asset Maintenance


  Involves adjusting the fixed asset subsidiary account balances as the assets depreciate over time or with usage
• Depreciation Schedule


  Shows when and how much deprecation to record
• Asset Disposal


  When the management decides to dispose the asset
• Key operating features of Reengineering the Payroll System

  • Personnel
  • Cost Accounting
  • Time-keeping
  • Data Processing
• Departments of the Batch Payroll System

  • Production
  • Data Processing
  • Cash Disbursements
• Types of Time Records

  • Job Tickets
  • Time Cards
• Procedures in the Computer based Fixed Asset System

  • Acquisition procedures
  • Asset maintenance
  • Disposal procedures
• Logic of a Fixed Asset System

  • Asset Acquisition
  • Asset Maintenance
  • Asset Disposal
• Examples of Independent Verification in the Payroll System

  • Time and Attendance
  • Accounts Payable
  • General Ledger
• Fixed Asset System Risks and Controls


  • Authorization Controls
  • Supervision Controls
  • Independent Verification Controls
• Technologies for Employee Timekeeping

  • Biometric Time
  • Magnetic swipe ID cards
  • Proximity cards
  • Mobile remote devices
• Documents of Audit Trail for Payroll

  • Time Cards
  • Journal Information
  • Subsidiary Ledger Accounts
  • GL Accounts
• Payroll Application Logic


  • Error Messages
  • File Backup
  • Automated Posting To Accounts