Accounting Information System - Essay Example

Keeping in view the requirements of the business operations the treasure evaluates the need for procurement of funds and investment of surplus in profitable ventures. He/she drafts policies and procedures for account collections and offers credit to customers and signs notes of indebtedness as approved by higher management. Finally, he/she prepares financial reports for management and advises them on investments and loans (Kerr & King, 1984).

The controller’s functions include accounting, reporting and control. The accounting function involves the preparation and maintenance of accounting records related to each business transaction. The controller directs and coordinates financial planning and budget management functions based on each forecast submitted by each department’s manager. He/she identifies any variations in operating results against budget by carrying out an analytical review of the company’s procedures and outcomes and manages the preparation of annual and interim reports of the company.

The controller is primarily involved in planning and policy-making committees and works as a legislative liaison to handle the company’s financial issues. The company’s tax issues, payroll and internal audit activities are also governed. Other activities may include the preparation of budgets and financial statements. Finally, he/she oversees the financial management of the company’s foreign operations and assists them to improve (Bragg, 2002).
Transaction processing cycle:

The transaction processing cycle begins with a transaction. A transaction is an agreement between buyer and seller to exchanges goods or services for payment. The transaction processing cycle, therefore, relates to the repetitive flow of the activities of an ongoing enterprise. There are three major transaction cycles which include (1) Revenue Cycle which relates to sales, shipping, receivables, and collections arising from company’s activities (2) Buying Cycle which relates to purchases, payables, and payments of company’s activities and (3) Production Cycle which relates to manufacturing products and storage activities of the company (Davis, 1999).

The entire transaction processing cycle no matter what type it is consists of basic steps including data collection, data editing, data correction, data manipulation, data storage and document production (Schaefer, 2002). These processes are integrals of a transaction processing system (TPS) which could be operated manually or through a computerized system. The process involves the input of business transactions either manually or via automated systems with assigned transactions codes.

The data editing process validates the transaction and checks it for completeness and data correction reports any errors allowing altering of the entered transaction details. Data manipulation is related to performing calculations, classifying transactions according to their account title and summarizing them. Data storage is the outcome of TPS which produces data to be linked with other systems and finally allows the documentation which involves the issuance of invoices, receipts and payment cheques, etc. Thus, on a whole, the transaction processing cycle covers sales order processing, purchasing and accounting of both. Read More