Page 80 - Accounting Information Systems

CHAPT E R 2 Introduction to Transaction Processing 51

FI G U R E
2-10 RELATIONSHIP BETWEEN THE SUBSIDIARY LEDGER AND THE GENERAL LEDGER

Accounts Receivable
General Ledger
Subsidiary Ledger

Hobbs Johnson Cash
XXXX.XX XXXX.XX
9,845,260

Smith
XXXX.XX
Total AR = Accounts Receivable
14,205,800
14,205,800

Ray Howard
XXXX.XX XXXX.XX

Inventory
126,389,538

reconciling the AR subsidiary ledger with the control account and from confirming customers’
accounts help the auditor form an opinion about the accuracy of accounts receivable as reported on the
balance sheet. The auditor performs similar tests on all of the client firm’s major accounts and transac-
tions to arrive at an overall opinion about the fair presentation of the financial statement. The audit
trail plays an important role in this process.

COMPUTER-BASED SYSTEMS
Types of Files
Audit trails in computer-based systems are less observable than in traditional manual systems, but they
still exist. Accounting records in computer-based systems are represented by four different types of mag-
netic files: master files, transaction files, reference files, and archive files. Figure 2-11 illustrates the rela-
tionship of these files in forming an audit trail.

MASTER FILE. A master file generally contains account data. The general ledger and subsidiary ledg-
ers are examples of master files. Data values in master files are updated from transactions.