INTRODUCTION TO TRANSACTION PROCESSING.pptx

An introduction to transaction processing in accounting information system.

1. INTRODUCTION TO TRANSACTION PROCESSING IT 101 – ACCOUNTING INFORMATION SYSTEM

2. LEARNING OBJECTIVES Identify the broad objectives of transaction cycles. Recognize the types of transactions processed by each of the three transaction cycles. Identify the basic accounting records used in TPS. Distinguish the relationship between the traditional accounting records and their magnetic equivalents. Enumerate the documentation techniques. Distinguish the differences between batch and real-time processing and the impact of these technologies on transaction processing. Enumerate data coding schemes used in AIS.

3. TRANSACTION CYCLES

4. GOAL OF TRANSACTION PROCESSING SYSTEM (TPS)

5. THREE TRANSACTION CYCLES

6. BASIC ACCOUNTING RECORDS

7. MANUAL SYSTEMS

8. ACCOUNTING RECORDS (pgs. 49-54)

9. The accounting records described previously provide an audit trail for tracing transactions from source documents to the financial statements.

10. MANUAL VS. MAGNETIC

11. Aspect Traditional Accounting Records Magnetic (Electronic) Equivalents Format Paper-based (manual journals, ledgers, balance sheets, etc.) Digital (stored in databases, spreadsheets, accounting software) Data Storage & Accessibility Physical storage (filing cabinets, shelves) Digital storage (cloud, hard drives, servers) Processing of Data Manual entry, calculations, and postings Automated data entry, calculations, and postings Accuracy & Error Minimization Prone to human error (miscalculations, omissions) Automated checks and error detection reduce human error Security Vulnerable to physical damage (fire, theft, water) Digital encryption, backups, and access control for security Cost & Resources Requires paper, storage space, labor for filing and retrieval Lower long-term costs, reduced need for physical storage Compliance & Auditing Time-consuming audits, harder to maintain compliance Easier tracking, reporting, and audit trails for compliance Updates & Modifications Manual corrections, cross-referencing errors Easy modification, audit trails of changes Integration & Scalability Difficult to integrate with other systems, hard to scale Easy integration with other systems, scalable as business grows Real-time Data & Reporting Periodic reporting (e.g., quarterly, annually) Real-time data access and instant reporting

12. DOCUMENTATION TECHNIQUES

13. DOCUMENTATION TECHNIQUES The old saying that a picture is worth a thousand words is extremely applicable when it comes to documenting systems. A written description of a system can be wordy and difficult to follow. Experience has shown that a visual image can convey vital system information more effectively and efficiently than words. As both systems designers and auditors, accountants use system documentation routinely. The ability to document systems in graphic form is thus an important skill for accountants to master.

14. 4 BASIC DOCUMENTATION TECHNIQUES

15. DATA FLOW DIAGRAM

16. ENTITY RELATIONSHIP DIAGRAMS

17. FLOWCHART

18. RECORD LAYOUT DIAGRAM a visual representation showing the structure and organization of data within a digital file or database record

19. BATCH VS REAL-TIME PROCESSING

20. DATA CODING SCHEMES IN AIS

21. DATA CODING SCHEMES

22. DATA CODING SCHEMES

23. DATA CODING SCHEMES

24. DATA CODING SCHEMES DATA CODING SCHEMES

25. LEARNING OBJECTIVES Identify the broad objectives of transaction cycles. Recognize the types of transactions processed by each of the three transaction cycles. Identify the basic accounting records used in TPS. Distinguish the relationship between the traditional accounting records and their magnetic equivalents. Enumerate the documentation techniques. Distinguish the differences between batch and real-time processing and the impact of these technologies on transaction processing. Enumerate data coding schemes used in AIS.

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