ACCT105 BUSINESS

ACCOUNTANCY
MODULE 4
Applications in Accountancy

Main Topics
Identify weaknesses in
accounting systems.
potential for errors and
inefficiencies in accounting
systems.
Identify business uses of
computers and IT software
applications:
i) Spreadsheet applications
ii) Database systems
iii) Accounting packages..
2

What is an Accounting System?

Organized set of manual and
computerized accounting methods.
procedures, and controls established
to gather, record, classify, analyze,
summarize, interpret.
Presentation of accurate and timely
financial data for management
decisions.
3

An overview of an Accounting System?

Other definition of an accounting

system
Ways in which a organisations record
and reports its financial information:
set of principles and methods used
by organizations for recording and
reporting financial information:
a computer program or set of
computer equipment and software
that is used for keeping accounts:
5

Weaknesses in an accounting
system
Depends on whether the firm uses only
manual recording and storage of
accounting information, or only
computerised accounting system or both
types.
Employees my not be familiar with the
technology or are hesitant to use them
Accounting information may be out dated
due to time constraints or response is very
slow so decisions are affected
6

 Firms may be over excited at

implementing computerised system
but are unaware of what to do to
secure the vital info.
Employees may commit fraud and
not reveal it or use means to hide the
errors.
Vital information may not reach the
stakeholders at time.
Volume of data may be too much to
handle manually or how to use
accounting packages

Potential errors in an
accounting system
Management may have been hasty in
implementing computerised system if
manual systems was very appropriate.
Excessive costs would arise such as
training of staff, service cost.
Use of technology would require firms to
create the necessary environment to
protect the expensive equipment from
natural disasters and human malpractice
8

 Firms may not be using the correct

accounting packages resulting in
delays and errors in processing,
retrieval and report preparation.
Employees who are aware of its
operations may be away on leave so
others may not know the passwords
thus delays in work.

Business uses of
computers

Computers have
improved the way
businesses operate in
their respective
industries.
Technology has advanced
so much that those who
are not using computers
in their business are at a
major disadvantage
against their competitors.

10

Organization
Computers allow tracking of their files,
documents, schedules and deadlines.
Computers allow firms to organize all
of their information in a very
accessible manner.
ability to store large amounts of data
on a computer is convenient and
inexpensive, and saves space.
leads to better time management and
productivity.
11

Self-Sufficiency
staff and companies become more self-sufficient
by allowing them to do tasks that previously had
to be outsourced.
Firms can now use office software to create their
own training material.
Desktop publishing software can be used to
create marketing materials.
Online tax and accounting programs allow
companies to prepare their own taxes.
Major operations of a company remain in-house
and empowers the company to become more
independent and less susceptible to errors
committed by outside parties.
12

Cost-Effective
technology makes services more affordable
and allows companies to save on their staff
payroll and office equipment.
allow work to be done faster and more
efficiently.
possible for a company to hire fewer staff.
companies can store data more easily, saving
on the cost of outside file storage, and can
avoid having to purchase as many copiers,
fax machines, typewriters, and other such
items that were used before computers
became popular.
13

 potentially profitable businesses can be

started with a smaller overhead cost.
Email capabilities decrease postage
costs; software applications reduce the
need for large accounting departments,
while videoconferencing reduces the
need for travel.
All resources saved will trickle down to
the consumers, who are then provided
with much more affordable products
and service.
14

Speed
Computers help speed up other
business operations.
collecting of consumer feedback,
ordering of raw materials, and
inspection of products is made
quicker through the use of
computers.
allowing companies to operate much
faster and to produce better quality
results.
15

Use of Spreadsheet in
Business

Storing Data

primary purpose of a spreadsheet is to store data in a

structured way.
Data values are entered into cells in a worksheet. These
data values can be formatted using various categories of
data types, including numerical and textual types.
The cells in a worksheet can refer to other cells, using
the location of a cell within the rows and columns in the
sheet. Individual parts of a worksheet can be contained
within tables, with a single worksheet potentially holding
a range of information sets.
Spreadsheet programs such as Excel provide templates
for common business tasks, such as expenses recording.
16

17

18

19

20

21

22

23

24