The Internal Control of Computerized Accounting in Information Era

The Internal Control of Computerized Accounting in Information EraTang Xiaoqin, Yan Chunlan, Kang YanyuChongqing Three Gorges UniversityWanzhou,Chongqing,China 404000AbstractIn the present, computer and modern information technology were widely used in accounting. Therefore, a good surrounding of universitys financial management was created by computerized accounting. Since 1980s, computerized accounting was developing so fast, It was used in over 90% of firms financial management. This essay analysed the risks and problems appeared in Computerized Accounting, some advices were developed based on working experience, expect to offer little promotion to computerized accounting of China in information era. Keywords-Information Era; Computerized Accounting,; Internal Control As computer and modern information technology were widely used in accounting, accountings working mode was gradual developing from manual mode to computerization. The changes what computerized accounting made were not only changed the dealing and storage ways of accounting information, but also impact the theory and application of it. Today, computerized accounting are applied successfully in various professions. 1. Features of Computerized Accounting Computerized accounting is defined as accounting work which used electronic digital computer and modern data processing technology. In computerized accounting, computer process substituted manual work in book-keeping, account, reimbursement and also the analysis, forecast and decision about accounting information, this kind of substitution aimed to promot the financial management and economical benefit and modernize the accounting work. After study, there are four major features comes out: 1)Data processing substitute the traditional manual work, meanwhile, computer is as a major working tool; 2) Magnetic media is the major storage of accounting data; 3)The centralized and automatized data processing way, it makes form making easier, data analysis more accurate and faster the inquiry; 4) Fast computing, massive storage, highly information sharing. The follow advantages were taken by the computerized accounting: a.The accounting software released accountants from manual accounting work, promoted working efficiency, also the quality of accounting information is improved. b.The functions (tranfer,check etc.) of accounting software reduced error rate as opposed to accuracy rising. c.A multitude of inter-disciplinary talents who master both computer and accounting were trained up, it made domestic computerized accounting work towards standardization, commercialization, generalization and specialization. d.Provided information construction experience to the firms, promoted the development of enterprise management software market.2. The Risks Computerized Accounting Faces Computer and accounting software are the most important material basis of computerized accounting. But everything is not perfect, the defect of computer design takes some risks to the computerized accounting at the same time. The computer hardware ensures the processing of software and data, all the data store in the storage equipment which can access from computer. Any error of hardware system can impact the accounting work negatively, such as data lost and no recovery of data. The major factor influence the safety of hardware: The quality of machine components, hardware damage caused by human or natural disaster etc. Accounting software is the fundamental of computerized accounting, the accounting software choosing is the major problem in computerized accounting.The compatibility of software is so important, bad compatibility will make data sharing not so easy, it cause hard communication in the firm, influence the whole work negatively. Meanwhile virus prevalence, hacker attack, software bugs threaten the running of computer devices. Computerized accounting is a connection between human and computer compare to traditional accounting. In computerized accounting, account, cash, data storage, file transfer are digital files, it makes data be deleted and changed without clue possible. The database of accounting data connecting to Internet, its possible for those people who are not authorized access the database and view the data, further copy, forge and delete important accounting data. So compare to traditional accounting, it will be harder to find cheating and forgery in computerized accounting, so the computer cheating and forgery will cause more financial lost. Otherwise, because of potential physic damage of storage medium, the data will lost at that time, so automatic backup of accounting data is so important, it can avoid potential data lost. 3. Problems in Computerized Accountings Internal Control In the present, most of accounting data are processed by computer with network support. As the most important component of accounting information system, in computerized accounting working environment, the contribution was enhanced. The diversification is the trend of internal control, the control will be much stricter than before. The accounting information system of computerized accounting developing in upper degree, this kind of change bring the enterprises both financial benefit and challenge of the control itself. 1) Paperless cuts traditional internal control system Computerized accounting system changes the form of accounting vouchers, business processing methods and procedures of accounting and financing undergone great changes in the Computerized accounting system. In traditional manual accounting system, accounting voucher, bookkeeping voucher, detail account, general ledger and so on are recorded and kept by different accountants.Responsibilities are divided according to the nature of economic businesses, different people in charge, and form a network with internal mutual restraints and less fraudulent. Once problem arises, ascertain where the responsibility, at the same time any unauthorized person can not browse all the accounting data. As for the use of computers to conduct online transaction, paperless trading, when every transaction occurs, transaction information was input to computer by accountants and recorded automatically. Original vouchers, documents which are essential in past and use for checking and auditing were partly canceled, and lots of works done by computer automatically. Therefore, internal control contents of a computerized accounting system become more extensive, and technical requirements are higher. 2) Defects of internal control system construction The internal control system under computerized accounting environment consists of system control and management control. System control is mainly the software integration; management control sets and manages enterprise itself. However, many enterprises are lack of awareness, both exist shortcomings. In computer system control, there havent established such systems which prevent fraud, effective division of responsibilities system and the separation of incompatible duties.But in management control, there havent establish effective responsibility of computerized accounting, operation management system of computerized accounting, computer hardware and data management system, accounting archives management system. And internal control system is lack of operability according to the realities of company. A good internal control system is established on the basis of thorough investigation on the nature of business, management requirement, staff, software and hardware and so on. Every business has its own features, computerized accounting internal control system should be established according to the actual situations of business, but some enterprises are lack of progress, internal control management model are backward, and can not adapt to a new age. 3) The efficiency of financial software should be improved With the rapid development of information technology, computer and software update quickly, a wide range of financial software put into use, their functions become more perfect and powerful. The application of financial software aims not only to improve efficiency, but more importantly, to provide relevant departments with useful and effective data to make a decision, and accounting plays its role in the participation of enterprise management. However, computerized accounting level of many enterprises are low, the function open and utilities are not enough, poor generality of accounting software and low degree of integration. Software of different companies can not exchange data, share information and control management, and can not integrate other subsystem in the company, so it is difficult to construct enterprise-wide management information system.4. Measures of computerized accounting internal control In order to ensure the authenticity and reliability of accounting information, realize computerized accounting system operate normal, safe and effective, eliminate possible hazards, and enhance the overall management of enterprise, achieve management goal, we must establish and improve internal control system and measures of computerized accounting. 1) Establish computer hardware, software and data management systems The normal operation of computer is the precondition of computerized accounting implementation, so we should regularly carry out maintenance on the equipment to prevent accidents; ensure the security of accounting data and accounting software, prevent unauthorized modification and delete of data and software; the data stored on magnetic should be preserved and double backup; ensure the continuity and safety of actual accounting data in the process of software modification, upgrading and hardware replacement, and should be supervised by relevant staff; improve management measures when computer hardware and software fail and the elimination of fault, ensure the integrity of data; enhance computer virus protection, increase security, improve the management of accounting files. 2) Establish operation and management system for computerized accounting Establish post responsibility of computerized accounting system, every job has a clear scope of official duty, and make sure everything was tubes, everybody is expertise, work is required, work is inspected. Clearly define the operation contents andauthorities of operators, prevent accounting data such as original voucher and bookkeeping voucher registered the computer before them are audited. When the operators leave, they should quit accounting software; and according to actual situation, the operation records should be kept by special person, and recording contents including operator, operation time, operation contents, fault conditions and so on. 3) Strengthen the training of computerized accounting staff Computerized accounting has become a comprehensive subject integrating accounting, management science, computer technology and information technology. Accountants not only should be proficient in accounting business, but also proficient in computer and data processing technologies. Accountants should be systematic in-service training, there should be plans to train staff, promote enterprises establishing high efficiency accounting information system, make standardization of computerized accounting, commercial, universal and specialized. At the same time, enterprises should strengthen the ethical standards of accountants, be honest, observe disciplines and obey laws, ensure the smooth progress of work. 5.Conclusions Perfect computerized accounting internal controls can effectively guarantee the reliability of accounting information and all the accounting processing can be deal with in the line with national accounting regulations, to improve the efficiency of accounting, and provides management decisions for the enterprises with high quality accounting information. References1Zhang Jincheng, Computer Information System Control and Audit, Beijing: Peking University Press, vol.4, 2002 2Du Dechun, Ai Yali, Internal Control of Computerize Accounting System, Modernize Market, vol. 2, 2007 3Stony Brook Universitys system of internal controlEB/0L,http:/www.sunysb.edu/audit/icmanualnew.shtml