Electronic Data Processing Systems. Chapter 6. Describe how application controls are used in data processing systems to ensure accuracy and integrity. Learning Objective 1. Paper-Based Input System. In some computerized accounting systems, inputs to the system are based on
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.
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.
Input document control form:
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.
Data transfer log
Program data editing
Data editing routines may be applied
to each of the basic data structures.
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.
Continuous operations auditing
Valid code check
In paperless input systems, sometimes called
online input systems, transactions are input
directly into the computer network.
Possible loss of segregation
of duties and audit trail.
Performed by the same person
Transaction logs or transaction registers
are created by logging all inputs to a
special file that automatically contains
tags to identify transactions.
What is tagging?
It means that additional, audit-oriented
information is included with
original transaction data.
Examples of paperless
Online manual data entry systems
Automatic identification systems
Transactions in paperless input systems
involving human intervention typically
proceed through two phases.
1. Data entry and data editing
2. Transfer to the host application system
Networked vending machine (NVM)
Electronic data interchange (EDI)
Examples of Batch Processing:
Weekly time reports to produce paychecks
Groups of checks to update
accounts payable master files
Processing invoices to update an
accounts receivable master file
Performing Batch Processing:
Sequential file updating
Random-access file updating
Preparing the transaction file
Updating the master file
Updating the general ledger
Preparing general ledger reports
There are two major aspects to the operation
of a computerized general ledger system.
1. The direct processing of the general
ledger programs, most of which
takes place on a monthly basis
2. The processing in other computer
application systems to prepare the
inputs to the general ledger system
As they are released by the general ledger, journal
vouchers are used to build a journal voucher file.
This file is program data edited to check for the
proper journal and account numbers and to
determine whether the accounts are correctly
associated with their related journals.
The current journal voucher transactions
are processed against the previous
month’s general ledger master file.
The master file is updated and the current
period’s general ledger register is produced.
Preparing reports requires a link between
the general ledger accounts and the
report (s) in which they appear.
In many systems, indexes are maintained for
both the subsidiary and general ledger files.
Maintaining these indexes allows users
to quickly access a particular account.
Random-access file updating is simpler
than sequential-access updating.
The following steps are used:
1. A record is read from the transaction file.
2. The key value of the transaction
record is used to randomly access
the related record in the master file.
3. The record in the master file is updated
in memory and then rewritten back
to the data file.
online real-time processing
The main difference between paperless and
paper-based batch processing systems is
that journal vouchers are replaced by their
electronic equivalents, and the general ledger
is updated automatically in period batch runs.
A primary advantage of paperless
systems is that they make
possible real-time processing.
The processing of individual transactions
as opposed to groups of transactions
is called immediate, direct,
or real-time processing.
Online, real-time systems (OLRS) process
transactions immediately after they are input.
These systems can provide
immediate output to users.
What are some types of real-time
processing in OLRS?
Data entry systems
File processing systems
Full processing systems
(transaction processing systems)
Relative disadvantages of OLRS are:
of systems operations
that arise from erroneous or fraudulent inputs.
These systems utilize contemporary information
technology to maximize system performance.
POS (Point-of-Sale) system
Bar coding for automatic identification
EDI (Electronic Data Interchange) ordering system
The output system can be paper-based,
paperless, or something in between.
Most paper-based, batch-oriented systems
with sequential file processing produce
very large volumes of output.
Online, real-time paperless systems
tend to produce very little output.
Output controls are designed to check that
processing results in valid output and
that outputs are properly distributed.
A separate EDP control group is often
established to monitor EDP operations.
Typically, an output distribution register is
maintained to control the disposition of reports.