e-accounting & reporting

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Transcript e-accounting & reporting

Adejola Adebayo Paul, PhD., FCSA(USA), CNA, ACA, ACTI
Lecturer, Department of Accounting, Nasarawa State
University, Keffi
Tel: +234-8036802529
E-mail: [email protected]
• Introduction
• E- Accounting & Accounting Soft
• Peachtree Accounting
• Web Based Accounting
• Audit Soft wares
• System Audit and Investigation
• Conclusion
• We are in a world of Information and
Communication Technology (ICT), where virtually
most activities are no longer done manually, instead
• The enormous advantages ICT has accrued to the
delivery of information and communication around
the world, as well as the central role of ICT in the
new global economy, means that ICT will shape the
dynamics of the new millennium.
• The role of and potential for ICTs in private and
public sector accounting, auditing, investigation and
reporting is enormous and cannot be over
• This is year 2012. As at date, over 7 billion people
exist on earth; Nigeria coming 6th with an estimated
population of 169million.
• The information technology (computer) is a fast
developing one that keeps changing every now and
then. It has touched every profession; thus
changing our way of doing things in an organization
and society as a whole.
• Of particular importance is the electronic
accounting aspect which has brought about speedy,
timely and efficient information processing which is
very significant for day to day accounting and
reporting as well as decision making.
• With the ongoing waves in digital and information
revolution, it is not a fallacy to assert that
“becoming an accountant on a technology
platform is a sure way for accountants to
secure their careers in the Digital age”.
• E-accounting simply means using electronic
processing computer based systems to:
• Acquire financial data
• Processing
• Storage
• Planning and forecasting
• Coordination and cost control
• Dissemination of vocal, textual, pictorial and
numerical information for timely decision
Presently, the following accounting soft-wares are
available in Nigeria to solve accounting and financial
• Peachtree Accounting
• Quick books
• Dac Easy for window
• Ms-Money (Financial management Software)
• Spec – pay (personnel mgt software)
• Eagle tracks for inventory management
• MYOB Accounting
• Sages accounting software
• Budgetmatic software for budgeting and budgetary
• Sun system software
• Tally accounting
Benefits of Using E-accounting in an Organization
The following are the benefits of appropriate usage and
application of electronic accounting in an organization. You
are able to:
• Get quicker information on financial position of the
organization by just pressing/touching a button.
• Ascertain with accuracy the revenue generated in an
organization on daily, weekly, monthly, quarterly etc within
a second.
• Provide detailed expenditure information to aid the
management in cost control and facilitate decision-making.
• Budget and forecast e.g. annual budget etc.
• Reduce clerical and administrative overheads.
• Project monitoring and variance analysis.
• Prevent frauds.
• Get timely report and financial statement after every
• This software comes in different flavors depending on
the number of users. Peachtree Pro, Peachtree
Complete, Peachtree Premium and Peachtree Quantum.
Most organization prefers Peachtree accounting to any
Other accounting Package(s) as a result of its:
• Cost Effectiveness
• Comprehensiveness
• Reliability
• Flexibility
• Portability
• Storage capability
• Timing
• Peripherals
• Documentation
Basic Steps in Using Peachtree Accounting
• Click Start button
• Click on program, select and click Peachtree
• Note: Peachtree Window dialog box will
• Click on set up a new company
• Peachtree new company set up wizard/dialog appears.
Click next
• Type the Company information e.g. Company Names,
Addresses, City, State etc. Click Next
• Select a chart of Account e.g. set up a new company on
using Samples, Copy Chart from existing Peachtree
Accounting Company, etc.
• Click next and select chart of accounts as related
to your business line
• Select accounting method e.g. Accrual or cash
and Click next
• Select posting method e.g. Real Time or Batch
and Click Next
• Select Accounting period and click next
• Select the monthly accounting periods e.g. JanDec 2011. The first month of Data entry e.g.
Jan. 2011, first year of entering payroll select
2011 and click next.
• Click finish.
Set Up a New Chart of Accounts
• Click on "MAINTAIN MENU"
• Click on Chart of Accounts
• A dialog box will appear:
• Type Account ID Number
• Type the Accounts description
• Select account type e.g. Cash, Income, and
Expenses etc.
• Click save
• A web-based accounting package is a complete
accounting system that resides on a web server.
Anybody in the world can access that accounting
system with a simple browser to set up and run
their own company. Instead of paying large sums of
money up front for hardware and software, the user
pays a smaller monthly rental fee.
• Web based accounting is the next evolution
accounting. It is an attempt to take accounting to
the next level- level of paperless processing of
financial transactions and presentation of financial
statements; level of generating financial reports
online without buying or owning hardware and
software .
Benefits of Web-Based Accounting
• You Only Need a Browser
• Lower Up-Front Costs for Software
• Lower Up-Front Costs for Hardware
• Lower Administration Costs
• Shorter Implementation Time Frame
• Lower Costs for Multiple Locations
• Work from Home
• High-End Databases
• No More Backup Worries
• Up-to-date Application Code
Categories of Web-based Accounting
Web based accounting is of two major categories:
1. Entry level for small business
• This software addresses the accounting functions of
small business organizations. Examples of these
soft-wares include:
• Merchant mirror accounting
• Xero online accounting
• Liberty accounting
• Cashbus accounting
• Saasu accounting
• Crunch accounting
• Nolapro accounting
• Arithmo accounting
2. Enterprise Resource Planning Softwares (ERPS)
• This software is also referred to as Cloud
computing. It addresses the accounting
functions, human resources management
functions, warehousing functions and reporting
functions of small and big business
organizations. It simplifies accounting functions
and has global coverage.
• Examples of these soft-wares include:
Net suite
Key Requirements in Using Web- Based
• Connectivity to the internet.
• Awareness of the website address you are
• Payment of subscription.
• Existence of a valid e-mail account.
• Registration online.
• In today’s modern and computerized world, even small
companies have huge numbers of financial transactions
going through the books. It is the responsibility of an
(external) auditor, to analyze these transactions and
ultimately form an opinion as to whether the accounts
show a true and fair view of the company’s position. But
with this huge number of transactions, it’s impossible to
analyze everything manually, so what is the alternative?
The answer is what is known as “generalized audit
Generalized audit software packages are tools designed
specifically for auditors and have two main functions:
• 1) To facilitate and automate the testing of 100% of a
• 2) To focus the auditors attention on specific areas or
transactions which are of higher risk.
Types of Audit soft-wares
• Specialized CAAT (Computer Aided Audit
Techniques) tools such as ACL (Audit Control
Language) and IDEA (Interactive Data Extraction
and Analysis) include libraries of prewritten queries
to ask typically meaningful questions on data sets.
• Other utilities such as Wiz Rule help explore complex
data sets and applications. Excel 2007 allows analysis
of over 1,000,000 records. ACL and IDEA are also
faster at analyzing data than Excel, Active Data or
Top CAATs, although none of the products were
particularly slow.
• CAATs are wonderful for asking bizarre audit
questions that ordinary system users, managers,
analysts and developers have probably never even
considered, some of which can lead to the
identification of frauds or (conversely) confirmation
that control weaknesses have not been exploited.
Application Areas and Features of Audit softwares
• Aging
Produces aged summaries of data based on established
cutoff dates.
• Append/Merge
They are used in combining two files with identical fields into
a single file. An example would be to merge two years worth
of accounts payable history into one file.
• Calculated Field/Functions
Audit soft-wares are applied in creating calculated fields by
using data within the file. For example, the net payroll pay to
an employee could be recalculated using the gross pay field
and deducting any withholding/taxes.
• Digital Analysis
Audit technology designed to find abnormal duplications
of specific digits, digit combinations, specific numbers,
and round numbers in corporate data.
• Duplicates
Audit software identifies duplicate items within a
specified field in a file.
• Extract/Filter
Extracts specified items from one file and copies them to
another file, normally using an “if” or “where” statement.
• Gaps
Audit software identifies gaps within a specified field in a
file. For example, identify any gaps in cheque sequence.
• Cross Tabulate
Allows you to analyze character fields; by setting them in rows and
columns. By cross‐tabulating character fields, you can produce
various summaries, explore areas of interest, and accumulate
numeric fields.
• Index/Sort
Audit software sorts files in ascending or descending order. An
example would be sorting a file by codes to see if any blank or
“strange” codes exist.
• Samples
Audit software creates random or monetary unit samples from a
specified population.
• Test grouping
These are groups of tests all designed to be run simultaneously on a
specific report or area of the accounts, e.g. Journals, listings, trade
receivables, fixed assets, etc.
• Highlight differences
These audit software highlights the differences between two
different versions of a report.
System Audit
• System auditing is a branch of general auditing
concerned with governance (control) of information
and communications technologies
(computers). System audit is also referred to as IT
audit or Computer audit. IT auditors primarily study
computer systems and networks from the point of
view of examining the effectiveness of their technical
and procedural controls to minimize risks.
• Auditors spend the bulk of their time dealing with
the people who specify, develop, test, manage,
administer, use and abuse the computer systems but
it’s being able competently to audit the information
technology that makes an outstanding and versatile
What do system auditors actually do?
IT auditors review risks relating to IT systems and
processes including:
• Inadequate information security (e.g. missing or
out of date antivirus controls)
• Inefficient use of corporate resources, or poor
governance (e.g. spending large on unnecessary
IT projects)
• Ineffective IT strategies, policies and practices
(including a lack of policies etc.)
• IT-related frauds
How is a system Audit Performed?
The main stages of a ‘typical’ IT audit assignment have been
extensively analyzed as follows:
• Scoping and pre-audit survey
The auditors determine the main area/s of focus and any areas
that are explicitly out-of-scope, based normally on some form of
risk-based assessment.
• Planning and preparation
The scope is broken down into greater levels of detail, usually
involving the generation of an audit work-plan or risk-controlmatrix.
• Fieldwork
Gathering evidence by interviewing staff and managers, reviewing
documents, printouts and data, observing processes in action etc.
• Analysis
Involves desperately sorting out, reviewing and trying to make
sense of all that evidence gathered earlier. SWOT (Strengths,
Weaknesses, Opportunities, and Treats) or PEST (Political,
Economic, Social, and Technological) techniques may come in
• Reporting
Involves desperately reviewing and trying to make sense of the
evidence and the analysis, figuring out how to relate what was
actually examined and found back to the original audit objectives,
then gradually writing it all up, re-writing it, re-re-writing it ...
circulating it within the department for peer review, modifying it
again, then circulating or presenting it to clients and client
managers to have their say, making final corrections, and finally
issuing it.
• Closure
In addition to sorting out the mess somewhat mistakenly called
‘indexing and cross-referencing’ and literally shutting the audit
files, closure involves preparing notes for future audits, chasing-up
management to complete the actions they promised months
System Investigation
• Investigation is enquiries made, by a
professional, into the financial and non financial
affairs of an organization on behalf of his client,
for specifically agreed purpose other than to
report on the truth and fairness of the
organization's financial information.
• System investigation is the examination of the
system(s) of an organization for a specified
• The world is undergoing revolution in information and
communication technology (ICT), which is righty
referred to as the digital revolution….
• The ongoing revolution in the area of information and
communication technology will continuously present
huge opportunities to internationally recognized
scholars and professionals. The losers will be nations,
professional and scholars who fails to meet the
challenges of ICT.
• By privilege, a member of this Association (ANAN) is
the only Nigerian that made it into the Council of
Association of Chartered System Accountants in the
United States of America. This is by virtue of his
standing with this Association and research in
Accounting Information Technology.........
• In 1998, I passed through the Nigerian College
of Accountancy in Jos and eventually became a
Certified National Accountant. When I accepted
the offer to lecture at Nasarawa State University,
the Acting HOD then was a member of ICAN……
• Readers are Leaders. It is your ability to know
ahead, see ahead and go ahead that make you
the Head (a Leader with a difference). Get copies
of the materials on Electronic Accounting &
Reporting, IFRS and IPSAS , go through them
and what “other Professionals” are following
after will follow after you.