Accounting Information System

Week 14 – HRM & Payroll Cycle

Context Diagram
Time Card

A document that records the employee’s arrival &

departure times for each work shift
Time Sheet

A document that is used by salaried professionals to

record how much time was spent performing various
tasks for specific clients
 Time card vs Time sheet
A document that records the A document that is used by salaried
employee’s arrival & departure times professionals to record how much
for each work shift time was spent performing various
tasks for specific clients

For employees paid on hourly basis For employees paid in fixed salary

Applied in manufacturing company Applied in service organizations:

particularly for factory labors accountant, lawyer and consultant
Prepare Payroll
• The third step in payroll cycle
• Documents used in this activity:
▫ Payroll register
▫ Deduction register
▫ Earnings statement
Payroll Register

A listing of payroll data for each employee for a

payroll period
Deduction Register

A report listing the miscellaneous voluntary

deductions for each empoyees
Earnings Statement

A report listing the amount of gross pay, deductions

and net pay for the current period and the year-to-
date totals for each category
Earnings Statement
Accounting Information System
Week 14 – GL & Reporting System
xBLR
xBLR
Sistem Informasi & Pengendalian
Internal
Week 14 – Summary
 ICoFR
What ELC and TLC Control deficiency
• A document issued by
• ELC
COSO (the Compendium) Entity Level Control A shortcoming in a
that provides approaches Controls that impact the component or relevant
and illustrarion on how whole organization principle of the system of
entities can apply COSO 5 components of internal
control as in COSO ICIF internal control that has
ICIF (i.e. the Framework) the potential to adversely
to design, implement, and • TLC affect the ability of the
conduct internal control Transaction Level Control entity to achieve its
over external financial Controls that impact a objectives.
reporting. particular transaction or
group of transactions
Can be applied in Also defined as Process
Public entities level control
Governmental entities
Not for profit entities
 Fraud
AIS Threats
1. Natural and political disasters
2. Software errors and equipment
malfunctions
3. Unintentional acts
4. Intentional acts
Definition
• Any means a person uses to gain an
unfair advantage over another person;
includes:
▫ A false statement, representation, or
disclosure
▫ A material fact, which induces a
victim to act
▫ An intent to deceive
▫ Victim relied on the
misrepresentation
▫ Injury or loss was suffered by the
victim
Fraud is white collar crime
Fraud categories
• Misappropriation of assets
▫ Theft of company assets which
can include physical assets and
digital assets
• Fraudulent financial reporting
▫ “cooking the books”
Who perpetrates fraud & why – Fraud triangle
concept
Computer fraud
• If a computer is used to commit
fraud it is called computer fraud.
• Computer fraud is classified as:
▫ Input
▫ Processor
▫ Computer instruction
▫ Data
▫ Output
Preventing & detecting fraud
• Make fraud less likely to occur
• Make it difficulty to commit
• Improve detection
• Reduce fraud losses
 Computer fraud
Hacking used for fraud Malware
• Hacking
• Internet misinformation • Spyware
▫ Unauthorized access,
• E-mail threats • Keylogger
modification, or use of an
electronic device or some • Internet auction • Trojan Horse
element of a computer system • Internet pump and dump • Trap door
• Social Engineering • Click fraud • Packet sniffer
▫ Techniques or tricks on people to • Web cramming • Virus
gain physical or logical access to • Software piracy • Worm
confidential information
• Malware
Social engineering
▫ Software used to do harm
• Identity theft
• Pretexting
• Posing
• Phishing
• Pharming
• URL hijacking
• Scavenging
• Shoulder surfing
• Skimming
• Eeavesdropping
Auditing Computer-based Information Systems
Overview of auditing process Information Systems Components and
Related Audit Objectives

Audit Techniques Used to Test
Programs
• Integrated Test Facility
▫ Uses fictitious inputs
• Snapshot Technique
▫ Master files before and after update
are stored for specially marked
transactions
• System Control Audit Review File
(SCARF)
▫ Continuous monitoring and storing
of transactions that meet pre-
specifications
• Audit Hooks
▫ Notify auditors of questionable
transactions
• Continuous and Intermittent
Simulation
▫ Similar to SCARF for DBMS
11-13
Computer Audit Software
• Computer assisted audit software that can
perform audit tasks on a copy of a
company’s data. Can be used to:
 Query data files and retrieve records
based upon specified criteria
 Create, update, compare, download, and
merge files
 Summarize, sort, and filter data
 Access data in different formats and
convert to common format
 Select records using statistical sampling
techniques
 Perform analytical tests
 Perform calculations and statistical tests
There are two popularly used computer
audit software:
1. Audit control language (ACL) www.acl.com
2. Interactive Data Extraction and Analysis
(IDEA)
Business Process Cycles
1. Revenue cycle
2. Expenditure cycle
3. Production cycle
4. Payroll cycle
5. General Ledger & reporting cycle

What you must understand in every cycle:

 Activities
 Documents
 Technology/tools
 Threats
 Control activities
 Revenue Cycle Expenditure Cycle Production Cycle
Activities 1. Sales order entry 1. Order materials, 1. Product Design
2. Shipping supplies, and services 2. Planning and
3. Billing 2. Receive materials, Scheduling
4. Cash collection supplies, and services 3. Production Operations
3. Approve supplier 4. Cost Accounting
(vendor) invoice
4. Cash disbursement
Documents Sales order Purchase requisition Bill of materials
Picking ticket Purchase order /blanket Operation list
Back order purchase order MPS
Bill of lading Receiving report Production order
Packing slip Debit memo Material requisition
Sales invoice Voucher package Move tickets
Credit memo RFP
Job-time ticket
Technology EDI/FEDI/EFT EDI/FEDI/EFT EDI
/Tools CRM EOQ/MRP/JIT CIM
RFID RFID PLM/CAD
MRP-II/Lean
Manufacturing
RFID
 GL & Reporting
HRM Cycle Payroll Cycle
Process
Activities 1. Recruit and hire new 1. Update payroll master  Update general ledger
employees data  Post adjusting entries
2. Training 2. Validate time and  Prepare financial
3. Job assignment attendance data statements
4. Compensation 3. Prepare payroll  Produce managerial
(Payroll) 4. Disburse payroll reports
5. Performance 5. Disburse taxes & misc.
evaluation deductions
6. Discharge of
employees
Documents Time card/Time sheet
Payroll register
Deduction register
Earnings statement

Technology Outsourcing: PEO, Payroll Outsourcing: PEO, Payroll xBLR (eXtensible Bisnis
/Tools service bureau service bureau Reporting Language)
Revenue vs Expenditure Cycle
The activities in the expenditure cycle are mirror images of the basic
activities performed in the recenue cycle.
Revenue Cycle
Expenditure Cycle
Production Cycle
Payroll Cycle
General Ledger and Reporting Process