Accounting Information Systems

Accounting Information Systems 3-1. The text provides seven reasons why documenting AISs is important: (1) depicting how the system works, (2) training users, (3) designing new systems, (4) controlling systems development costs, (5) standardizing communication with others, (6) auditing, and (7) controlling end-user support costs. Additional reasons include: (1) to help evaluate the performance of system personnel, (2) to help evaluate the adequacy or efficiency of an existing system, and (3) to provide design specifications to outside vendors who might be proposing new systems. Accountants are interested in system documentation for all these reasons. For example, inadequate documentation makes it difficult to use an integrated accounting package effectively, design one for others to use, or audit a system intelligently. Flowcharts and similar systems documentation are also important to auditors. These charts can help auditors spot internal control weaknesses that are not apparent from prototypes or not obvious wh en observing a system in use. 3-2. Document flowcharts are a type of system flowchart. Whereas system flowcharts are process-oriented, document flowcharts focus on the flow of physical documents through the processing system. Document and system flowcharts are similar in that they use similar symbols in their construction. A few additional symbols, such as envelopes and hand trucks to depict movement of goods, are more likely to appear in document flowcharts than system flowcharts. But system flowcharts contain more detail about processing logic. Accountants can use data flow diagrams (DFDs) to depict the physical flows of data through an AIS (like document flowcharts), or the logical flow of data through an AIS (like system flowcharts). Like document or system flowcharts, their main objective is to document data flows in an orderly, graphic, and easily-understood format. But DFDs use fewer symbols than either document or system flowcharts, and do not require columns (like document flowcharts). Program flowcharts are really the lowest level of system flowcharts because they outline the logic sequence for a particular application program. Thus, they are more used by programmers and system analysts than by accountants and auditors. Still, auditors will need to understand these program flowcharts when looking at program logic and program controls. Program flowcharts use many of the same symbols found in system flowcharts, but also use some special ones such as the decision symbol. 3-3. A document flowchart is a pictorial representation of the physical data flow through the various departments of a business. A document flowchart is used in designing or evaluating an accounting information system. 1. A systems analyst uses it when evaluating a system to see if each department is receiving the necessary data and that unnecessary data are not transferred. 2. A system designer uses it when there is interest in improving or replacing an existing system. 3. A computer p rogrammer can use a document flowchart when preparing system flowcharts. 4. An auditor uses it to help define, follow, and evaluate an audit trail. 5. An internal data security expert uses it to indicate weaknesses in internal control and data control. 3-4. Guidelines for creating document flowcharts, system flowcharts, and data flow diagrams are listed in the text. See relevant chapter sections for document flowcharts, system flowcharts, and data flow diagrams.

Business & International Trade Assignment Example | Topics and Well Written Essays - 1000 words

Business & International Trade - Assignment Example The two main parts of the current account are the balances of visible and invisible trade (goods and services) and both of these are affected by the exchange rate of a country against others. The basic types of exchange rates are floating exchange rate, where the market dictates movements in the exchange rate; pegged float, where a central bank keeps the rate from deviating too far from a target band or value; fixed exchange rate, which ties the currency to another currency, mostly more widespread currencies such as the U.S. dollar or the euro or a basket of currencies. If the economy of UK has a large and persistent deficit on its balance of payments, then serious economic problems could result, such as: †¢ A fall or depreciation in the value of ?‘s exchange rate (Campbell, 2007, p.110-114) †¢ A decline in the country’s reserves of foreign currency †¢ An unwillingness of foreign investors to put money into the economy. The business importance of these pro blems is likely to be most serious if: †¢ The exchange rate depreciation (or frequent fluctuations in the exchange rate) make importing and exporting too risky (Bean, 2002, p.276) — see section below on exchange rates †¢ The government takes corrective actions by, for example, limiting foreign exchange transactions and putting substantial controls on imports, such as tariffs and quotas (Dale & Haldane, 2005, p.1611-26). This policy (protectionist policy), used currently by Zimbabwe, might have short-term benefits by reducing imports of competitors’ products. However, serious consequences could also result. The policy could lead to retaliation by other countries that will then reduce export demand. Also, import controls are serious for firms that depend on imported supplies of raw materials. Question: How would an increase in the value of the ? against the $ and/or the â‚ ¬ affect the price of UK exports and imports into the UK? (2.1a) Answer: When demand f or a currency exceeds supply, its value will rise. This is called an appreciation because one unit of the currency will buy more units of other currencies. Exchange rate depreciation, on the other hand, is a fall in the external value of a currency as measured by its exchange rate against other currencies. If ?1 increases in value from â‚ ¬2 to â‚ ¬1.5, the value of the ? has appreciated (Fisher et al, 2007, p.19). The domestic firms that would gain from an appreciation of the country’s currency are: †¢ Importers and exporters in the UK of foreign raw materials and components, for whom the domestic currency cost, of these imports will be falling — this increases their competitiveness. †¢ Importers and exporters in the UK of foreign manufactured goods, who are’ able to import the product more cheaply in terms of domestic currency —in 2008, it was claimed that European importers of US-produced cars were profiteering at the expense of consume rs(Britton & Whitley, 2007,p. 152-62). This was because, although the import price of cars was falling due, to the appreciation of the euro against the US dollar, they were not selling them more cheaply to European consumers. Hence, they were taking advantage of the appreciation to make much higher profits (Calvo, 2003, p.383-98). †¢ Lower import prices will help to reduce the rate of inflation for the whole economy and all firms are likely to gain from this more stable position. The domestic fir

Should economic efficiency be the primary consideration and priority Essay

Should economic efficiency be the primary consideration and priority for the enforcement of competition law - Essay Example This research considers both sides of the debate and emphasises EU competition law and policies. It is concluded that there is no real dominant theme as between economic and non-economic policies and purposes in the enforcement of competition law. This is as it should be, since, the social, political and economic aspects of competition law and policies are equally important to the efficient operation of the market. It is argued that economic efficiency cannot be obtained unless, the political and social objectives of competition laws are achieved. Table of Contents Abstract 2 Introduction 4 The Purpose of Competition Law 5 Non-Economic Purposes and Policies of Competition Law 7 Economic Purposes and Policies of Competition Law 10 Non-Economic Factors as the Main Consideration in the Enforcement of Competition Law 11 Economic Efficiency as the Main Consideration in the Enforcement of Competition Law 15 Conclusion 17 Bibliography 19 Introduction Governments have introduced national com petition laws reflecting a growing trend toward a general consensus that competition laws are primarily aimed at promoting economic efficiency in the market (Lloyd, 1998, p. 1129). Non-economic policies are also reflected in competition laws which are divided between social and political concerns (Baker, 2013, p. 2176). ... 93). Economists tend to favour the economic efficiency of competition law while legal scholars are not comfortable with this view (Kerber, 2009, p. 93). Lianos (2013) presents the two sides of the debate in terms of the economic welfare perspective versus the normative perspective (p. 7). The economic welfare perspective views economic efficiency as the main objective of competition laws. In this regard, economic efficiency refers to enabling consumption choices and the fairer distribution of production permitting freer market entry (Lianos, 2013, 7). The normative perspective refers to the promotion of innovation and democracy in the market for the social and political efficiency of the market (Lianos, 2013, p. 13). This paper analyses both sides of the debate and determines that while economic efficiency appears to be the main consideration and priority for the enforcement of competition law, non-economic factors should have equal consideration. In making this argument, this paper is divided into three parts. The first part of this paper presents the economic and non-economic policies of competition law. The second part of this paper analyses the non-economic arguments and the final part of this paper analyses the economic arguments. The Purpose of Competition Law The purpose of EU competition law can be gleaned from Article 101 of the Treaty on the Functioning of the European Union (Consolidation Edition) 2012 (hereinafter TEFU). Article 101 in general bans any agreement or collusion calculated to distort trade and competition in the market (TEFU, Article 101). A list of the applicable activities include, price fixing, production restrictions or controls, sharing markets or