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    Systems": General Ledger Systems Should

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    Karen Cael
    1. XBRL is an Internet standard designed for business reporting and information exchange that allows for the publication, exchange, and processing of financial and business information. 2. Management reporting systems provide information to support management decision making at different levels of the organization, from strategic to operational. They use responsibility accounting to assign accountability for economic events and resource usage. 3. Effective management reporting considers factors like formalization of tasks, responsibility and authority, span of control, and management by exception, as well as behavioral factors like goal congruence and information overload.

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    Systems": General Ledger Systems Should

    Uploaded by

    Karen Cael
    30 views2 pages
    1. XBRL is an Internet standard designed for business reporting and information exchange that allows for the publication, exchange, and processing of financial and business information. 2. Management reporting systems provide information to support management decision making at different levels of the organization, from strategic to operational. They use responsibility accounting to assign accountability for economic events and resource usage. 3. Effective management reporting considers factors like formalization of tasks, responsibility and authority, span of control, and management by exception, as well as behavioral factors like goal congruence and information overload.

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    CHAPTER 8

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    1. XBRL is an Internet standard designed for business reporting and information exchange that allows for the publication, exchange, and processing of financial and business information. 2. Management reporting systems provide information to support management decision making at different levels of the organization, from strategic to operational. They use responsibility accounting to assign accountability for economic events and resource usage. 3. Effective management reporting considers factors like formalization of tasks, responsibility and authority, span of control, and management by exception, as well as behavioral factors like goal congruence and information overload.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    30 views2 pages

    Systems": General Ledger Systems Should

    Uploaded by

    Karen Cael
    1. XBRL is an Internet standard designed for business reporting and information exchange that allows for the publication, exchange, and processing of financial and business information. 2. Management reporting systems provide information to support management decision making at different levels of the organization, from strategic to operational. They use responsibility accounting to assign accountability for economic events and resource usage. 3. Effective management reporting considers factors like formalization of tasks, responsibility and authority, span of control, and management by exception, as well as behavioral factors like goal congruence and information overload.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 2

    CHAPTER 8 XBRL — REENGINEERING FINANCIAL

    “Financial Reporting and Management Reporting REPORTING


    Systems” - the Internet standard specifically designed for
    business reporting and information exchange
    INFORMATION SYSTEM FUNCTIONS OF GLS - its objective is to facilitate the publication,
    exchange, and processing of financial and business
    General Ledger systems should: info
    - collect accurate info
    - classify and code data and accounts XML (eXtensible Markup Language)
    - validate collected transaction/maintain accounting - metalanguage for describing markup languages
    controls
    - process transaction data POTENTIAL RISKS TO THE FRS
    - store transaction data 1. A defective audit trail.
    - generate timely financial reports 2. Unauthorized access to the general ledger.
    3. GL accounts that are out of balance with subsidiary
    GLS Database contains: accounts.
    1. General ledger master file - based on the COA 4. Incorrect GL account balances because of
    2. General ledger history file - for comparative unauthorized or incorrect journal vouchers.
    financial support
    3. Journal Voucher File - total collection of the XBRL TAXONOMY - specifies the data to be
    journal vouchers processed in the current period. included in an exchange or report
    4. Journal Voucher History File - contains journal Taxonomy - classification schemes that are
    vouchers for past periods. This historical information compliant with XBRL specifications to accomplish a
    supports management’s stewardship responsibility to specific information exchange or reporting objective
    account for resource utilization such as filing with the SEC
    5. Responsibility Center File - shows the revenues,
    expenditures, and other resource utilization data for AREAS OF SPECIFIC CONCERN OF XBRL
    each responsibility center in the organization 1. Taxonomy Creation
    6. Budget Master File - contains budgeted amounts 2. Taxonomy Mapping Error
    for revenues, expenditures, and other resources for 3. Validation of Instance Documents
    responsibility centers
    MANAGEMENT REPORTING SYSTEM
    THE FINANCIAL REPORTING SYSTEM - often called discretionary reporting
    - way to meet an entity’s reporting obligation
    - primary recipients of financial statement Factors that Influence the MRS
    information are external users, such as stockholders, 1. Formalization of Tasks - management should
    creditors, and government agencies structure the firm around the tasks it performs rather
    than around individuals with unique skills
    Financial Reporting Procedures 2. Responsibility and Authority
    1. Capture the transaction * Responsibility - an individual’s obligation to
    2. Record in special journal achieve desired results
    3. Post to subsidiary ledger 3. Span of Control - refers to the number of
    4. Post to general ledger subordinates directly under his or her control
    5. Prepare the unadjusted trial balance 4. Management by Exception - suggests that
    6. Make adjusting entries managers should limit their attention to potential
    7. Journalize and post adjusting entries problem areas rather than being involved with every
    8. Prepare the adjusted trial balance activity or decision
    9. Prepare the financial statements
    10. Journalize and post the closing entries MANAGEMENT FUNCTION, LEVEL, AND
    11. Prepare the post-closing trial balance DECISION TYPE
    1. Strategic Planning Decisions (Top Management)
    - have long-term time frames
    - require highly summarized information - every economic event that affects the organization
    - tend to be nonrecurring is the responsibility of and can be traced to an
    - high degree of uncertainty individual manager
    - broad in scope and have a profound impact on the
    firm BEHAVIORAL CONSIDERATIONS
    1. Goal Congruence
    2. Tactical Planning Decisions (Middle Management) 2. Information Overload - occurs when a manager
    - decisions are shorter term, more specific, recurring, receives more information than he or she can
    have more certain outcomes, and have a lesser impact assimilate
    on the firm than strategic decisions 3. Inappropriate Performance Measures - when
    inappropriate performance measures are used, that
    3. Management Control Decisions (Middle one purpose of a report to stimulate behavior
    Management) consistent with the objectives of the firm can have the
    - involves motivating managers in all functional opposite effect
    areas to use resources, including materials, personnel,
    and financial assets, as productively as possible

    4. Operational Control Decisions (Operations


    Management)
    - narrower and more focused than tactical decisions
    because they are concerned with the routine tasks of
    operations
    * Three Basic Elements
    a. Setting standards - Standards are pre-established
    levels of performance that managers believe are
    attainable
    b. Evaluating performance - looking for variance
    c. Taking corrective action

    TYPES OF MANAGEMENT REPORTS


    1. Programmed Reporting - provide information to
    solve problems that users have anticipated
    a. Scheduled reports - reports according to time
    frame; regular reports
    b. On-demand reports - triggered by events, not by
    the passage of time

    2. Ad Hoc Reporting - Managers with limited


    computer background can quickly produce ad hoc
    reports from a terminal or PC, without the assistance
    of data processing professionals.

    Data mining - process of selecting, exploring, and


    modeling large amounts of data to uncover
    relationships and global patterns that exist in large
    databases but are hidden among the vast amount of
    fact
    Verification model - uses a drill-down technique to
    either verify or reject a user’s hypothesis

    RESPONSIBILITY ACCOUNTING

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