STUDY MATERIAL C2
300
CONTROLLING THE BOOKKEEPING SYSTEM
However, the biggest single drawback of computerised systems is that the user cannot
physically see what is happening to the bookkeeping system and errors and omissions can-
not be readily identifi ed.
Of course, many computerised accounting systems are ‘ self-balancing ’ , in that a single
transaction is input, and is used to update the ledger accounts, the daybooks, the control
accounts, perhaps even the inventory records, and it is all too easy to assume that every-
thing has been done correctly. Unfortunately, this is not always the case.
9.8.1 Aspects of computerised accounting systems
There are many different types of computerised system. Some lend themselves to large
organisations, others to smaller organisations. Typical confi gurations are:
(i) a mainframe computer that has a very large capacity, supported by a minicomputer
(slightly smaller) and perhaps several personal computers for individual users. Such
a system might involve the users in entering data into the system, and accessing the
results directly.
(ii) Networked computers, where the fi les are held centrally, but updated and accessed
from remote locations by users.
(iii) Stand-alone computers, where fi les are held on individual computers, updated by
those users.
All of these confi gurations have security implications. For example, some may allow indi-
vidual users to update the ledger accounts. It is important that there is suffi cient segrega-
tion of duties in this situation. Others may only allow access to the balances, but not the
facility to amend those balances.
In all cases, the ledger accounts will have to balance and a trial balance will be pro-
duced. This may be part of the ‘ month-end routine ’ , which typically produces totals of the
transactions during, and balances at the end of, the month. The month-end routine would
provide lists and totals of invoices issued and received, payments made, expenses incurred,
as well as end-of-month balances of receivables, payables, inventories, bank and cash, and
expenses.
The computer system will also be capable of making adjustments to the accounts for
accruals, prepayments, allowance for receivables and so on. These will normally be input
via a journal entry, as in a manual system.
9.9 Accounting coding systems
By now you will realise that a busy organisation will have a large number of ledger accounts
and subsidiary records within and outside the accounting system. Using the titles of
accounts to locate and cross-reference transactions could be diffi cult in such situations.
Imagine the tax authorities maintaining all the records of taxpayers according to their
names. There will be hundreds of thousands of taxpayers with the surnames Smith, or Khan
or Jones – and thousands called John Smith or Helen Jones. Each needs a unique code to
identify them from the others. The same applies to accounting systems. The ledger accounts
require unique codes, as do inventory items, employees on the payroll and so on.