A Database Management System - Example

Technical Report Accounting Systems 204 Due: Week 10 of semester (please refer to the unit outline, lecture and BB announcement for more details). Name of Tutor: Tutorial day / Tutorial Time: Family Name / Surname: Other Names: Student ID: 1.0 Introduction The business environment is usually characterized with recurrent risk which when the management must strive always to keep in check. This requires the management to put in place measures that can assist them in the task. Failure to keep these risks in check may threaten the very existence of the organization. One of the challenges that managers face in mitigating the organization risks is the problem of management of the details of each employ as well as the day to day transactions that the organization engage in. To counter this challenge, managers opt to use Database Management Systems (DBMS). A Database Management System (DBMS) is a computer program that allows a computer to perform the functions of storing, retrieving, adding, deleting and modifying data. Relational Database Management System on the other hand is a Database Management System that implements the relational model of tables and relationships. Examples of Database Management Systems include; Microsoft Access, MySQL, Oracle, Microsoft SQL Server and FileMaker Pro. Among these, Microsoft Access is the most common and easiest to use. The significance of DBMS can never be over-estimated. Organizations which have made it big in the corporate field have the history of good data management. Managing organization is crucial. DBMS allows an organization to manage and use an incredible variety of information easily. Databases are easy to set-up, easy to manipulate and easy to use and allows the organization to maintain order in what could be a very chaotic management environment. 2.0 The Organization Grant Thornton can trace its origin back in 1924 when Alexander Richardson Grant founded Alexander Grant & Co. in Chicago. Grant was a senior accountant with Ernst & Ernst (currently Ernst & Young). The organization experienced a period of both explosive growth and centralization in the 1950s and early 1960s. The organization established a national office in Chicago in 1961 with a net revenue exceeding $5 million. In the mid-1960s, the company expanded and joined with firms from Australia, Canada and the United Kingdom and established the organization as Alexander Grant Tansley Witt. This organization operated successfully for ten years. In 1986, Alexander Grant & Co. changed its name to Grant Thornton following its merger with United Kingdom firm, Thornton Baker in 1985. Grant Thornton LLP is today a U.S member firm of Grant Thornton International Ltd, a leading organization of independent audit, tax and advisory organizations. These firms assist dynamic organizations to unlock their potential for growth by providing meaningful, forward looking advice. The firm helps privately owned, publicly listed and public sector clients to find solutions. Grant Thornton has established branches in over 120 countries with 38,500 employees. 2.1.0 Mission To make a difference to their colleagues, their clients, their profession and their communities 2.1.1 Vision To be the leading audit, tax and advisory firm serving dynamic organizations in their chosen markets. 2.1.2 Key Goals 1. Make a difference to their colleagues Grant Thornton is striving to acquire and retain the best individual in their taskforce. This is shown by the manner in which the company is offering training programs for graduates who later turn to make a difference in the firm. The firm has also cultivated the virtue of hard work and teamwork which has brought about the success of the firm. 2. Make a difference to their clients The company has continued to make a difference in the private sector and the public sector alike. They have done this by tailor making their services to suit their various clienteles. The company has also established new subsidiaries in different countries so as to ensure each client receives the kind of service that is coherent with the laws of the land. 3. Make a difference to their profession The firm aims at representing in their brand in a way that enhances their reputation and distinguishes the firm and their clients in the market place. The firm also aims at taking a leadership position on issues of importance to their profession, the firm and the public interest. They aim at encouraging living their values as per their communication and being committed to doing what is right and inspire themselves to reach full potential. 4. Make a difference to their community The firm aims to provide distinctive client service regardless of the origin of their clients. The firm is currently aiming at expanding to more countries in order to locate closer to their clients. They aim at sharing knowledge, opportunity and best practices for the benefits of the clients and the development of the public. Furthermore, the firm aims at providing services which brings respect to the public and care for the environment. 2.2 Inherent risks to achieving of the goals LIKELIHOOD CONSEQUENCES 1 (Insignificant) 2 (Minor) 3 (Moderate) 4 (Major) 5 (Catastrophic) 5 (Almost Certain) M H H E E 4 (Likely) M M H H E 3 (Possible) L M H H-Error H-Fraud 2 (Unlikely) L L M-Misleading Financial Statements M H 1 (Rare) L L-Conflict of Interest M M M 3.0 Business Cycle A business cycle occurs as a result of fluctuations in the state of the economy over time. These fluctuations result from changes in economic growth. A business cycle describes changes in the demand-side of the economy as measured by GDP: GDP = C + I + NX GDP does not remain constant over time but it changes due to both economic and non-economic reasons. Economic reasons may include changes in government policies like interest rates, taxes and legislation. Non-economic reasons include drought, natural calamities, war, man-made disasters etc. A hypothetical business cycle includes: Peak – the rate of economic growth is increasing at the left of the curve. For example a 5 per cent GDP may be increasing to a 6 per cent of annual GDP growth. Once GDP growth reaches the peak, it flattens out. Downturn – as the economic growth increases, it will reach a point when inflation also starts to rise. This will prompt for the enactment of counter-inflationary measures to slow down the rate of economic growth. Recession – at this point, growth rate becomes negative. It is defined by two consecutive quarters of negative GDP growth. Unemployment rises up significantly as inflation is contained. Expansion – at this range, inflation is completely under control and the economy gains a positive growth. Unemployment decreases and the demand for goods and services rise steadily. Desired growth – once the level of GDP reaches this point, the growth rate slows down and becomes steady. 3.1 Revenue Cycle Peak – here, the rate of economic growth is characterized by high rate of employment, high demand for manufactured goods, unsaturated labor markets, fair interest rates and a steady growth. Downturn – this is characterized with fall in GDP, job losses, dwindling demand for manufactured goods, increasing levels of unemployment, escalating cost of living and increasing inflation. Recession – this is the worst scenario where GDP levels reach record low, high levels of unemployment, high interest rates, high inflation levels, very low demands in manufactured goods, saturated labor markets, high taxes and general economic instability. Expansion – this is the period when measures are put in place to counter inflation. The economy begins to expand with increasing jobs, deflation, reduction of interest rates and a rising GDP. Desired Growth – this is the point where economic growth reaches its peak and all factors that contribute to economic growth are in a level of equilibrium. 4.0 Database and File Structure See Appendix 1-3 5.0 Screens and Reports The Design View: this screen enables one to define the number of fields that each table will have as well as the fields that are required to appear in the tables. It also enables one to define the kind of data that each field will contain. This screen is the basic screen that will determine how the whole database will look like. The Tables: this screen is where the database users will access to manipulate the contents of the tables created. Each item entered in the fields must conform to the data types described for the particular field. The Relationships Table: this screen enables the database administrator to define the relationships between the various tables created in the previous screen. The relationships between the tables and fields are determined by the data types defined for each field. Reports: a report is usually a summary of the database and queries. They present information in summary that is useful for decision making. 6.0 Controls to Mitigate Risks & Residual Risks Identification 6.0.1 Fraud Hiring of workers with proven integrity. Measures to verify accounting procedures used. Stiff penalties for any person found to have engaged in fraud. Instilling the culture of self-discipline in the workers. Strict internal procedures to safeguard against fraud. 6.0.2 Error Several accountants in place to detect any errors that may arise. Ensuring the workers do not work under pressure. Strict accounting procedures to safeguard against any error. 6.0.3 Misleading Financial Statements Employment of competent workers. Putting in place double checking measures for the calculations. Ensuring no conflict of interest. 6.0.4 Conflict of Interest Ensuring the employed individuals are not affiliated to any of the clients. Hiring individuals with high integrity. 7.0 Conclusion Database Management Systems are an easy and convenient way to manage the information of large companies where the manual data storage methods are inapplicable. A competent database manager should be hired if the organization is to get the maximum benefit of the system. The system safeguards against data corruption as well as data redundancy. A suitable database management system should be chosen according to the size of the organization and the needs of the management. Business cycle is one important tool that management of a large organization like Grand Thornton LLC can employ for precise short term and long term planning. Since the state of the economy affects the business, having up to date information of the state of the economy will prove to be of great significance to the management of the company. Overall Grand Thornton LLC needs to put in place a team of competent individuals that can help in risk assessment and who are able to recommend mitigation measures to safeguard against any inherent risks that the company may face. 8.0 Appendices Appendix 1: The Relationships Window Appendix 2: Relationships Appendix 3: Report Appendix 4: The Design View Window Appendix 5: The Tables Window Appendix 6: The Relationships Screen References 1. RISK MANAGEMENT. (2011). Five steps to risk assessment. [Online] Available at: http://www.hse.gov.uk/risk/fivesteps.htm. [Accessed on: 18th May 2014] 2. JOHN, F. (2014). Risk in Accounting & Auditing Firms. [Online] available at: http://smallbusiness.chron.com/risks-accounting-auditing-firms-67385.html. [Accessed on: 18th May 2014] 3. PEARSON. (2011). Accounting Information Systems. [Online] available at: http://wps.pearsoned.co.uk/ema_ge_romney_ais_12/194/49668/12715217.cw/index.html. [Accessed on: 18th May 2014] Read More