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FINANCIAL REPORTING
& MANAGEMENT
REPORTING SYSTEMS

AIS255 ACCOUNTING INFORMATION SYSTEM

 TOPIC Operational features
of General Ledger
System (GLS)
OUTCOME
Operational features
of Financial
Reporting System
Financial Reporting (FRS)
System (FRS)
XBRL-
Reengineering
Management Financial Reporting
Reporting System
(MRS)
Controlling the
GL/FRS
Data Analytic & Ad
Hoc Reporting
A Framework for 3

Information
Systems
FINANCIAL REPORTING SYSTEM (FRS) 4

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 General Ledger 5

System (GLS)
• GLS is hub connected to the
other systems through
information flow
• Transaction cycle process
individual data in different
cycles and recorded in special
journal & subsidiary accounts
• Summaries of transactions
flow to GLS & become source
for MRS & FRS
 Financial Reporting System (FRS) 6

Prepare the Prepare the

• It is a system used to provide stewardship Capture the
adjusted trial financial
transaction.
information to external parties. balance. statements.

• Much of the information provided takes the

Journalize and Journalize and
form of standard financial statements, tax Record in
post adjusting post the closing
special journal.
returns, and documents required by entries. entries.
regulatory agencies
Post to Prepare the
• The primary recipients of financial statement subsidiary
Make adjusting
post-closing trial
entries.
information are external users, such as ledger. balance.
stockholders, creditors, and government
agencies. Prepare the
Post to general
unadjusted trial
ledger.
balance.
Financial 7

Reporting
Process
 Real-Time
General Ledger
and Financial
Reporting
System

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Extensible Business Reporting Language (XBRL) 9

It is an XML-based language that was designed to provide the

financial community with a standardized method for
preparing, publishing, and automatically exchanging
financial information, including financial statements of
publicly held companies.

XML used to replace HTML (hyper text markup language),

which the HTML reports not conveniently processed through
IT automation. It requires user to manually entered the user’s
information system on any data received using the HTML
reports.

The objective of XBRL is to facilitate the publication,

exchange, and processing of financial and business
information.
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 • Management should design and implement

Controlling controls over the financial reporting process.

• It include the controls on transactions processing
the GL/FRS system of every cycles that contribute data to FRS
• Potential risks to the FRS include the following:
– A defective audit trail
– Unauthorized access to the general ledger
– GL accounts that are out of balance with
subsidiary accounts
– Incorrect GL account balances because of
unauthorized or incorrect journal vouchers
• Uncontrollable risks results in misstated financial
statements & other reports, thus misleading users
if this information. Potential to litigation, significant
financial loss to the business, sanction by
regulatory.
 Transaction Authorisation
• A proper authorisation on the journal voucher by a responsible manager at the source department, since the documents authorise 13
the entry to the general ledger
Segregation Of Duties
CONTROL ISSUES
• User with access authority to GL accounts should not:
 Have recordkeeping responsibility for special journals or subsidiary ledgers,
 Prepare journal vouchers, and
 Have custody of physical assets.
• In situation real-time processing, where transactions are authorised, processed, and posted directly to GL (Figure 8.5), system should
generate listing of journal voucher & account activity reports, for users to detect errors & unusual events
Access Controls
• A limit database access to authorised users able to reduce an authorised access to the GL accounts which potential in errors, frauds
and misrepresentation in the financial statements.
Accounting Records
• In system-based processing, the audit trail provide a path for data input, processing and turn into transaction output. It provides
details on related documents, journals and ledgers designed to capture the transactions
Independent Verification
• The GL function as an independent verification step within the accounting information systems
• FRS produces 2 operational reports, The Journal Voucher Listing & The GL Change Report; which provide proof of the accuracy of
process
IT Application Controls
• Input/Process/Output controls
MANAGEMENT REPORTING SYSTEM 14

(MRS)

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 Factors that influence the MRS
Management Management Principles
•
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Reporting System
Formalization of tasks
• Responsibility & authority
• Span Of control

(MRS) • Management by exception

• Often classified as discretionary
reporting because it is not
mandated under regulatory
• It helps business:
 To identify solutions on timely
basis to identified business
problems
 Promote effective
management
 Support to achieve business
Management Function, Level And Decision Type
• Strategic planning decisions
• Tactical planning decisions
• Management control decisions
• Operational control decisions
Problem Structure
• Unstructured
• Partially structured
• Structured
Types Of Management Reports
• Programmed reports
• Scheduled reports
• On-demand reports
Responsibility Accounting
• Cost centre
• Profit centre
• Investment centre

objectives Behavioral Considerations

• Goal congruence
• Information overload
• Inappropriate performance measures
Management Principle
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Management 17

Function, Level
And Decision Type
 Problem 18

Structure
• A structured problem is a problem
in which data, procedures, and
objectives are known with
certainty. Repetitive & routine
problems
• An unstructured problem is a
problem for which there are no
precise solution techniques. Non-
routine & non-recurring problems.
• Partial structure is combination of
both
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Programmed
Reporting

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Responsibility Accounting 20
 Behavioral • Goal congruence is the merging of goals within an
organization.
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Considerations • Information overload occurs when a manager

receives more information than can be assimilated.
• Inappropriate performance measures is when
behavior and performance measures are
inconsistent with the objectives of the firm.
DATA ANALYTIC & AD HOC REPORTING 22
 • Data analytics represents a significant departure from the traditional
structured reporting.

Data
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• Management are facing problems to fulfill their information needs.
This due as data could exists:

Analytics & – in large volume

– in unstructured formats

Ad Hoc – multiple sources

Reporting
– available in short notice

• Therefore, two data analytics approaches is suitable to address these

problems:
1. Small data analytics characterizes techniques that employ data
that are in a format and of a volume that allows them to be
analyzed and acted upon by traditional technologies.
2. Big data analytics is characterized and defined by the three Vs:
extreme volumes of data, the rapid velocity at which the data
must be processed, and the wide variety of structured and
unstructured data types that need to be integrated.
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THANK YOU 26