Analysing Accounting Systems

Purpose of this assignment

This assignment is an opportunity for the trainees to develop an understanding of the importance of keeping effective accounting systems within a selected organization. Trainees are expected to demonstrate further reading and investigation – and to compare what is observed in an organisation of their choice with what is written in academic literature.

Scenario

The International Accounting Standards Board (IASB) issues International Financial Reporting standards (IFRS), including the conceptual framework for financial reporting, exposure drafts and other discussion documents. The conceptual framework describes the basic concepts that underline the preparation and presentation of the financial statements for external users. The objective of the general-purpose financial statements is to provide the financial information that is useful for the primary users in order to make decisions about providing resources for the reporting entity.

Having an effective accounting system, either manual or computerised, ensures smooth, efficient and effective audit trail that enable to keep  track of having more accurate, fair and true accounting records that build up the final basis for effective financial reporting throughout inputting, processing and converting the data of the source documents supporting the daily financial and operational transactions into useful form of financial information that are presented in the body of the periodic financial statements and its related footnotes.  

Assume that you are a junior accountant in one of the leading trading organizations in Bahrain. You are required to give an introductory paragraph about your chosen company, and do the following tasks:

Task 1 This task provides evidence for LO1 (P1, M1)

Explain the purpose and use of the different accounting records of your selected organization and make sure to cover the following:

• Name of the different accounting records used by the organization;
• Using a table format, the purpose and use of  each record; and
• Five (5) transactions recorded by the organization.

Guidance/notes to trainees

Choose one (1) trading corporation in Bahrain and study its financial records and reports, accounting and internal control systems, and policies about its financial reporting practice which ensure effectiveness and efficiency of its operations.

Evidence for this task

Answer to the tasks, with proper referencing.

Task 2 This task provides evidence for LO1 (P2, D3)

Your manager has asked you to write a memorandum addressed to the head of system development unit that he has to meet in the coming couples of days in order to finalize whether to buy from outside or internally develop the accounting system. The memorandum should include an assessment of the importance and meaning of accounting concepts as applied to the organization. Concentrate on the financial accounting concepts applicable to your organization and give examples.

Evidence for this task

Answer to the task, with proper referencing.

Task 3 This task provides evidence for LO1 (P3)

Evaluate factors that influence the nature and structure of the accounting system (manual or computerized) used by your organization. Your evaluation should clearly discuss the differences, advantages and disadvantages for the organization of using either manual or computerized accounting system.

Evidence for this task

Answer to the tasks, with proper referencing.