Kế toán kiểm toán - Chapter 12: The expenditure cycle: Purchasing and cash disbursements

Accounting Information Systems9th EditionMarshall B. Romney Paul John Steinbart12-1©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartThe Expenditure Cycle:Purchasing and Cash DisbursementsChapter 1212-2©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartLearning ObjectivesDescribe the basic business activities and related data processing operations performed in the expenditure cycle.Discuss the key decisions to be made in the expenditure cycle, and identify the information needed to make those decisions.Document an understanding of the expenditure cycle activities.3©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartLearning ObjectivesIdentify major threats in the expenditure cycle, and evaluate the adequacy of various control procedures for dealing with those threats.Read and understand a data model (REA diagram) of the expenditure cycle.4©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartIntroductionLinda Spurgeon, Alpha Omega Electronics’ (AOE) president, asked Elizabeth Venko, the controller, to address the following issues:What must be done to ensure that AOE’s inventory records are current and accurate?What can be done to ensure timely delivery of quality components?5©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartIntroductionIs it possible to reduce AOE’s investment in materials inventories?What must be done to ensure that available discounts are taken?How could the information system provide better information to guide planning and production?How could IT be used to reengineer expenditure cycle activities?6©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartLearning Objective 1Describe the basic business activities and related data processing operations performed in the expenditure cycle.7©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure Cycle: Main ObjectiveThe expenditure cycle is a recurring set of business activities and related data processing operations associated with the purchase of and payment for goods and services.The primary objective of the expenditure cycle is to minimize the total cost of acquiring and maintaining inventories, supplies, and the various services necessary for the organization to function.8©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure Cycle: Key DecisionsWhat is the optimal level of inventory and supplies to carry?Which suppliers provide the best quality and service at the best prices?Where should inventories and supplies be held?How can the organization consolidate purchases across units to obtain optimal prices?9©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure Cycle: Key DecisionsHow can information technology be used to improve both the efficiency and accuracy of the inbound logistics function?Is sufficient cash available to take advantage of any discounts suppliers offer?How can payments to vendors be managed to maximize cash flow?10©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure Cycle:Business ActivitiesWhat are the three basic business activities in the expenditure cycle?Ordering goods, supplies and servicesReceiving and storing goods, supplies and servicesPaying for goods, supplies and services11©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartOrdering Goods, Supplies And ServicesThe first major business activity in the expenditure cycle is ordering inventory or supplies.The traditional inventory control method (often called economic order quantity [EOQ]):This approach is based on calculating an optimal order size so as to minimize the sum of ordering, carrying, and stockout costs.12©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartOrdering Goods, Supplies And ServicesAlternative inventory control methods:MRP (material requirement planning)This approach seeks to reduce required inventory levels by scheduling production, rather than estimating needs.JIT (just in time)JIT systems attempt to minimize both carrying and stockout costs.13©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartOrdering Goods, Supplies And ServicesWhat is a major difference between MRP and JIT?MRP systems schedule production to meet estimated sales need, thereby creating a stock of finished goods inventory.JIT systems schedule production to meet customer demands, thereby virtually eliminating finished goods inventory.14©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartOrdering Goods, Supplies And ServicesDocuments and procedures:The purchase requisition is a document that identifies the following:requisitioner and item numberspecifies the delivery location and date neededspecifies descriptions, quantity, and price of each item requestedmay suggest a vendor15©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartOrdering Goods, Supplies And ServicesWhat is a key decision? determine vendorWhat factors should be considered?pricequality of materialsdependability in making deliveries16©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartOrdering Goods, Supplies And ServicesDocuments and procedures:The purchase order is a document that formally requests a vendor to sell and deliver specified products at designated prices.It is also a promise to pay and becomes a contract once it is accepted by the vendor.Frequently, several purchase orders are generated to fill one purchase requisition.17©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartReceiving and Storing Goods, Supplies and ServicesThe second major business activity involves the receipt and storage of ordered items.Key decisions and information needs:The receiving department has two major responsibilities:Deciding whether to accept a deliveryVerifying quantity and quality18©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartReceiving and Storing Goods, Supplies and ServicesDocuments and procedures:The receiving report documents details about each delivery, including the date received, shipper, vendor, and purchase order number.For each item received, it shows the item number, description, unit of measure, and count of the quantity received.19©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartPay for Goods and Services:Approve Vendor InvoicesThe third activity entails approving vendor invoices for payments.The accounts payable department approves vendor invoices for paymentThe cashier is responsible for making the payment20©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartPay for Goods and Services:Approve Vendor InvoicesThe objective of accounts payable is to authorize payment only for goods and services that were ordered and actually received.There are two ways to process vendor invoices:Nonvoucher systemVoucher system21©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartPay for Goods and Services:Improving Accounts PayableProcessing efficiency can be improved by:Requiring suppliers to submit invoices electronically, either by EDI or via the InternetEliminating vendor invoices. This “invoiceless” approach is called evaluated receipt settlement (ERS).22©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartPay for Goods: Pay Approved Invoices The cashier approves invoicesThe combination of vendor invoice and supporting documentation is called a voucher package.A key decision in the cash disbursement process is determining whether to take advantage of discounts for prompt payment.23©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartLearning Objective 2Discuss the key decisions that need to be made in the expenditure cycle, and identify the information needed to make those decisions.24©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartInformation Needs The third function of the AIS is to provide information useful for decision making.Usefulness in the expenditure cycle means that the AIS must provide the operational information needed to perform the following functions:Determine when and how much additional inventory to order.25©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartInformation NeedsAIS must provide the operational information needed to perform the following functions (con’t): Select the appropriate vendors from whom to order.Verify the accuracy of vendor invoices.Decide whether purchase discounts should be taken.Monitor cash flow needs to pay outstanding obligations.26©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartInformation NeedsWhat are examples of additional information The AIS should provide?Efficiency and effectiveness of the purchasing departmentAnalyses of vendor performance such as on-time delivery, quality, etc.Time taken to move goods from the receiving dock into productionPercentage of purchase discounts taken27©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartLearning Objective 3Document your understanding of the expenditure cycle.28©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure CycleOrder goodsRequestgoodsVariousdepartmentsInventorycontrolReorder point29©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure CycleReceivegoodsOrder goodsReceipt of goodsProductioncycleRevenuecycleNeedsVendorReceiving reportPurchase orderInventoryBack Orders30©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure CyclePurchase OrderPacking slipAFrom purchasingVerify order,count, andinspectFrom suppliersRECEIVING31©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure CycleCompare, review,verifyaccuracyFrompurchasingFromstoresFromvendorReceivingreportPurchaseorderInvoiceNACCOUNTS PAYABLE32©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure CycleInvoiceCashierFrom A/PBatch totalsReceivingreportAPurchaseorderDisbursementvoucherReview andcomputebatch totalBatchtotalCompare andreconcile33©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartLearning Objective 4Identify major threats in the expenditure cycle and evaluate the adequacy of various control procedures for dealing with those threats.34©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartControl: Objectives,Threats, and ProceduresAnother function of a well-designed AIS is to provide adequate controls to ensure that the following objectives are met:Transactions are properly authorized.Recorded transactions are valid.Valid, authorized transactions are recorded.Transactions are recorded accurately.35©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartControl: Objectives,Threats, and ProceduresAssets (cash, inventory, and data) are safeguarded from loss or theft.Business activities are performed efficiently and effectively.36©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartControl: Objectives,Threats, and ProceduresWhat are some threats?stockoutspurchasing too many or unnecessary goodspurchasing goods at inflated pricespurchasing goods of inferior qualitypurchasing from unauthorized vendorskickbacks37©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartControl: Objectives,Threats, and Proceduresreceiving unordered goodserrors in counting goodstheft of inventoryfailure to take available purchasing discountserrors in recording and posting purchases and paymentsloss of data38©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartControl: Objectives,Threats, and ProceduresWhat are some control procedures?inventory control systemvendor performance analysisapproved purchase requisitionsrestricted access to blank purchase requisitionsprice list consultation budgetary controls39©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartControl: Objectives,Threats, and Proceduresuse of approved vendor listsapproval of purchase ordersprenumbered purchase ordersprohibition of gifts from vendorsincentives to count all deliveriesphysical access controlrecheck of invoice accuracycancellation of voucher package40©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartLearning Objective 5Read and understand a data model (REA diagram) of the expenditure cycle.41©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure Cycle Data ModelThe REA data model integrates both traditional accounting transactions data with other operational data.What are some examples?the date and amount of each purchase information about where items are storedvendor performance measures, such as delivery date42©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure Cycle Data ModelPartial REA Diagram of the Expenditure CycleInventory(1, N)Order inventoryOrdergoods(1, N)RequestgoodsFillsRequest inventory(1, N)(1, N)(1, 1)(1, N)43©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure Cycle Data ModelThe REA diagram models the relationship between the request goods and order goods events as being many-to-one.Why?The company sometimes issues purchase orders for individual purchase requests.At other times it takes advantage of volume discounts by issuing one purchase order for a set of requests.44©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure Cycle Data ModelPartial REA Diagram of the Expenditure CycleInventory(1, N)ReceiveinventoryReceivegoods(1, N)Ordergoods(0, N)(1, N)Order/Receive45©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartExpenditure Cycle Data ModelWhy is there a many-to-many relationship between the order goods and receive goods events?Vendors sometimes make several separate deliveries to fill one purchase order.Other times, vendors fill several purchase orders with one delivery.Sometimes, vendors make a delivery to fill a single purchase order in full.46©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartCase ConclusionWhat are the key points that Elizabeth Venko proposed?Online terminals in each of AOE’s departmentsJIT inventory systemUse of EDI to send purchase orders to vendorsUse of EFT as much as possibleImplementation of a relational data base47©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/SteinbartEnd of Chapter 1248©2003 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, Romney/Steinbart