When Azina and John first started their business Azina kept a close eye on all the expenditure

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When Azina and John first started their business Azina kept a close eye on all the expenditure relating to the business. She could almost tell exactly how much money was outstanding at any one point without looking at the records. As the business grew and more and more customers appeared along with a variety of suppliers, this meant that keeping a close eye on the level of income and expenditure became more difficult. Azina would rely on looking at the AIS for confirmation of the figures. Now that the record keeping has been delegated to a member of staff. Azina and John rely on the accuracy and integrity of the data produced by the computerized accounting system to help them plan their business." Hindia is a school leaver who has just started working for John and Azina, she has five GCSEs and is keen to make a good impression with Azina. She has a limited range of computer skills mainly on word-processing packages, but is a quick learner and is keen to start on the accounting package. Hindia's opportunity comes sooner than expected when Terry the accounting system operator suffers a severe attack of RSI (repetitive strain injury) and has to take two months off work. Hindia's first task is to enter the cheque income from outstanding debtors on the system when they arrive each morning. She notes the amount, debtor name and, where it exists, the invoice number. Hindia follows the Sales Receipts procedure as outlined in Chapter 6. After a few days Hindia feels very confident in using the system although she does not understand why there is a hig fuss about matching reference numbers, invoice numbers and debtor listings. John and Azina. in the meantime, are quite happy with Hindia's work and Azina congratulates herself on appointing Hindia as she seems such a competent girl. Just before Terry's return to work a very irate letter arrives from one of the company's best customers. Anthony Wong. Anthony is not at all amused by the fact that he has received a final demand for payment when he had already paid the amount within the time period that qualified him for an early settlement discount. How did this happen?' asks John, 'I shall check the records myself," replies Azina.

Indeed when the records were checked it did indicate that Anthony Wong had not paid. however when Azina double checked with the bank, Anthony's cheque had been paid into the business account. This meant that somehow the income had not been properly recorded on to the system. Azina checked with Hindia as to how she posts the entries and discovers that Hindia was not following the proper procedures for posting the entries. If Hindia did not find a corresponding invoice number or reference number on the receipt she merely looked for a debtor who has an outstanding amount that matched the amount received. She then proceeded to make up the information as she went along. Hindia said to Azina: 'I thought that if the money was recorded and banked, then as long as the money was secure that there was nothing else to worry about, debtors would all pay up eventually and it would balance'. Azina suddenly had visions of similar letters arriving from irate customers and instantly blamed Hindia for her lack of common sense. Later that morning Hindia left clutching her coat and in tears, declaring that she would never work for the company again The following weekend there was a break-in at the office, very little was taken apart from the coffee and tea kitty that were kept on the shelf behind the door. However when Terry tried to access the accounting system on Monday morning he found that all the previous months' records had been deleted and all new transactions failed due to a virus that had appeared on the computer. I thought you and I were the only one who knew the password,' he said to Azina. 'I must have given it to Hindia when she did some inputting for me while you were away.' replied Azina Fortunately Terry had made backup copies of all entries up until the previous Thursday so it meant that only one day's records had been lost. These required re- entering once the computer had been freed of all viruses. Disappointment struck however when the backup files could not be located, the intruder had overturned a small wooden filing cabinet that contained the disks, the disks had fallen out and were now in disarray amongst the earth and water of the potted plant that had lived on top of the cabinet. It was impossible to identify the backup disk for the previous Thursday. There's nothing left to do but start collating the information from the invoices and individual statements of debtors,' said John. 'But it will take weeks,' replied Terry, Just as well RSI is better then,' snapped John. your Later that morning, after the police had gone, John suddenly remembered Hindia talking about her boyfriend who was obsessed with computers and was forever developing new programs and trying to hack into systems. Somehow he could not but feel uneasy about the events of the weekend.

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Accounting A Systems Approach

ISBN: 9781861520371

1st Edition

Authors: Alison Warman, Jeff Davies

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