Page 378 - Accounting Information Systems

8
chapter

Financial Reporting and

Management Reporting

Systems

he chapter begins with a review of the objectives,
operational features, and control issues of two
T related systems: the general ledger system (GLS)
and the financial reporting system (FRS). The chapter illus-
trates the central role of the GLS as a hub system that is con- Learning Objectives
nected to transaction processing systems through formal
information flows. Transaction cycles process individual After studying this chapter, you should:
events that are recorded in special journals and subsidiary
Understand the operational features
accounts. Journal vouchers and account summaries of these
of the general ledger system (GLS),
transactions flow into the GLS, which provides input to the
financial reporting system (FRS),
FRS. The financial reporting process is presented as a multi-
and management reporting system
step activity that begins with the capture of the transaction
(MRS).
and concludes with the preparation of financial statements.
Significant changes to the traditional financial report proc- Be able to identify the principal
ess, in the form of XBRL (extendable business reporting operational controls governing the
language), are imminent. This chapter outlines the key fea- GLS and FRS.
tures of XBRL and its implications for accountants. Finally, Understand the factors that influ-
the management reporting system (MRS) is examined. The ence the design of the MRS.
MRS is distinguishable from the FRS in one key respect: fi- Understand the elements of a
nancial reporting is mandatory and management reporting is responsibility accounting system.
discretionary. Management reporting information is needed
Be familiar with the financial report-
for planning and controlling business activities. Organiza-
ing issues surrounding XBRL
tion management implements MRS applications at their dis-
cretion, based on internal user needs. This chapter examines
the factors that drive the design of such applications.