總帳及報告循環 General Ledger And Business Reporting (GL/BR) Process

1. 總帳及報告循環 General Ledger And Business Reporting (GL/BR) Process

2. GL/BR is a Spoke on AIS Wheel • The GL/BR process • Assembles financial information for both internal and external users • Depends on process controls for accuracy and completeness • Relies on pervasive controls for system security • Documentation of effective controls is required by Sarbanes-Oxley

3. Functions of GL/BR • GL • accumulating data, classifying data by GL accounts, recording data in those accounts • fueling FR, BR and other reporting subsystems

4. Functions of GL/BR, Cont’d. • BR • preparing general-purpose, external financial statements • ensuring that F/S conform to GAAP • generating web-based forms • generating ad hoc & predetermined business reports

5. GL/BR Horizontalperspective 1. Business process feeders send updates to the business reporting department.

6. GL/BR Horizontalperspective 2. Treasurer notifies the business reporting department of investing transaction activities.

7. GL/BR Horizontalperspective 3. Treasurer notifies the business reporting department of financing transaction activities.

8. GL/BR Horizontalperspective 4. Controller notifies the business reporting department of various adjusting entries.

9. GL/BR Horizontalperspective 5. Finalized budget figures are sent to the business reporting department from the budgeting department.

10. GL/BR Horizontalperspective 6. Adjusted trial balance figures are sent from the business reporting department to the financial reporting officer.

11. GL/BR Horizontalperspective 7. Actual and budget figures are sent from the BR department to the budgeting department; the actual results will be one of the inputs used in formulating next period’s budgets.

12. GL/BR Horizontalperspective 8. Actual and budget figures are sent by the business reporting department to the managerial reporting officer.

13. GL/BR Horizontalperspective 9. Financial reporting officer sends GAAP-based financial statements to Treasurer, Controller, and outside parties (owners, banks, SEC)

14. GL/BR Horizontalperspective 10. Managerial reporting officer sends performance reports to various managers.

15. Manual Reports The old method of manually preparing financial reports Financial reports are comprised of text and data from the operational data stores formatted as financial statements Often data had to be re-keyed for each different report created XBRL Enabled Reports Operational store data contains descriptive (semantic) tags XBRL enabled report reads descriptive tag and merges data into report Data from one data store can be used to generate many different reports including Web reports without re-keying E-Business Angle Operational stores are financial information stored in databases used to create the chart of accounts, GL and financial reports

16. Internal and External Business Reporting Flows

17. Responsibility Accounting/Reporting System • Duties of managerial reporting officer • Reports to assist internal management decision making • Performance reports comparing actual performance with budgeted performance • Reports are most detailed at lowest levels of management, least detailed at highest levels of management • It ties into the concept of responsibility accounting

18. Responsibility Accounting Performance Reporting

19. GL/BR Process: Context Diagram • Various feeder processes provide event information • Source of internal and external financial reports

20. GL/BR Process: Level 0 DFD • Detail of common GL/BR processes

21. GL Hierarchical Coding • 1113 Cash in Bank • 1xxx = assets • x1xx = current assets • xx1x = cash accounts • xxx3 = cash in bank • -------------------------------------------------- • 1111 might mean petty cash1112 might mean change fund1121 might mean trade accounts receivable1122 might mean receivables from officers

22. Chart of Accounts • Must be flexible to meet the firm’s financial and managerial reporting needs • For a multi-entity firm, there is need to code for departments, geographical regions, product lines, divisions, and special reporting entities • Should accommodate “rolling up” or consolidating accounts into statements using different forms

23. Section 302 Requires CEO and CFO to certify that financial statements contain neither material untrue facts nor omit material facts. Penalty for violation of section 302 up to 20 years prison and $5 million in fines Section 401 Requires financial statements that clearly reflect the economic reality of business events Section 404 Defines report on internal control that must be provided with annual report Requires management assertion and auditor attestation on internal control effectiveness Section 409 Requires rapid and current disclosure of information regarding material changes in financial conditions Sarbanes-Oxley Act of 2002

24. Current Environment of Financial Reporting • Today’s environment demands rapid access to information • Investors want information sooner • Sarbanes-Oxley demands “rapid and current” disclosures • SEC has shortened the time companies have for reporting certain events • Real-time reporting of events summarized in the GL is just over horizon