Electronic Data Processing Systems

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Electronic Data Processing Systems
Chapter 6

Learning Objective 1

Describe how application controls are used in data processing systems to ensure accuracy and integrity.

Manual Input System
In some computerized accounting systems, inputs to the system are based on handwritten or typed source documents. These documents are then collected and forwarded to computer operations for error checking and processing.

Preparation and Completion of the Source Document
Source documents, such as customer orders are the physical evidence of inputs into the transaction processing system and serve several purposes: Capture data, facilitate and standardize operations, and provide a permanent file for future analysis.

Preparation and Completion of the Source Document
The source document, such as sales orders, are prepared manually. Errors can be minimized if the source document is well designed and easy to understand.

Transfer of Source Documents to Data Processing
Batch control totals and data transfer registers controls data transfers.

User’s departments

Data processing

Transfer of Source Documents to Data Processing
Document counts are a simple form of batch control. Batch totals may be taken for all or several numeric fields in the original data file.

Transfer of Source Documents to Data Processing
Data entry Key verification Visual verification Program data editing

Program Data Editing Techniques
Data editing routines may be applied to each of the basic data structures. Character Records Fields Files

Program Data Editing Techniques
What is a table lookup? It is an editing program that compares the value of a field to the acceptable values contained in a table file.

Program Data Editing Techniques
Limit test Continuous operations auditing Check digit Valid code check

Electronic Input Systems
In electronic input systems, sometimes called online input systems, transactions are input directly into the computer network.

Possible loss of segregation of duties and audit trail.

Electronic Input Systems
Source document Preparation Performed by the same person

Data entry

Electronic Input Systems
Transaction logs or transaction registers are created by logging all inputs to a special file that automatically contains tags to identify transactions.

Electronic Input Systems
What is tagging? It means that additional, audit-oriented information is included with original transaction data.

Electronic Input Systems

Online manual data entry systems Automatic identification systems

Electronic Input Systems
Transactions in electronic input systems involving human intervention typically proceed through two phases. 1. Data entry and data editing 2. Transfer to the host application system

Electronic Input Systems

Networked vending machine (NVM) Electronic data interchange (EDI)

REA and the Structure of  Input Data
Resources-Events-Agent (REA) Model provides a very general model for capturing and recording events and their related attributes. The model stipulates that for each event there are two categories of attributes: resources and agents. Location (of a resource) has been added, making the REAL model.

REA Example: Sales Transaction
Sales Department Customer Raw Material Finished Goods

Inventory Cash Consumable

Sales

REA and the Structure of  Input Data
It’s also necessary to specify how events relate to each other (relationships). In a pure REA system there are no journals, ledgers, or accounts. Instead, reports or “views” from the basic recorded event data are generated.

Learning Objectives 2 and 3

Characterize the various types of electronic systems used for processing. Describe the basic functions of a computerized accounting application.

The Processing System
Processing involves the manipulation of files that provide storage of data.

A file is a collection of records, and records are a collection of fields....
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