ABSTRACT:
How do the internal control system impact on the accounting information system of an enterprises? This study was conducted to analyze the relationship of these two systems. Although they have different functions, the result shows that both systems interact, complement each other and toward to obtain organizations the ultimate goals as maintaining and protecting resources, providing efficient information for decision-making processes of managers exactly and timely. Hence, managers can use this papers result to build, maintain and operate these systems effectively, enhance the advanced competence and secure the developtment of enterprises.
Keywords: Accounting information; Accounting information system; Internal control.
1. Introduction
The support of information technology in accounting is the key to the survival and development of enterprises (Hernandez et. al, 2008; Dulcic et. al, 2012; Zaki Mohammad Baridwan Shadiq Khari, 2015). While, internal control frameworkemerged in 1992 by the COSO, amended, supplemented and updated in 2013 has provided a solid foundation for the internal control system.
Although both of systems have different functions, they are the same inproviding of information for manager’s decision-making and helping businesses attain their goals. Hence, we studied the relationship between the two systems to provide appropriated recommendations to improve the performance of them.
2. Research background
2.1. Internal control
Internal control system is a flexible unified process updated continuously the changes with which an organization is facing. Managers and staff of all departments must be involved in this process to address risks and provide reasonable assurance as well as achieve common goals and missions of organization. An effective internal control system consists of five components.
2.1.1. Control Environment
The control environment consist of many standards, processes, and structures that provide the basis for operating internal control through the organization.The control environment comprises the integrity and ethical values of the organization; the parameters enabling the board of directors to carry out its oversight responsibilities; the organizational structure and assignment of authority and responsibility; the process for attracting, developing, and maintaining individual competence; and the rigor around performance measures, incentives, and payoffs to drive accountability for performance. The principles include:
- Commitment to the values and moral integrity.
- Board of Directors must demonstrate independence from management and execution monitoring and the development of internal management.
- Management structure setting, the media reports and authority and responsibility appropriate for the pursuit of goals.
- A commitment to attract, develop and retain qualified individuals.
- Organization to the individual to explain the internal management while pursuing the objectives.
2.1.2. Risk Assessment
Risk is defined as the probability that an event will occur and effect on the achievement of the objectives in an organization. Risk assessment is an active and repeated process to identify and evaluate the risks of the achievement of the objectives. Risks to achieving these goals within the organization are concerned about the degree of risk. Therefore, risk assessment creates the foundation of determining how to manage risk. Furthermore, risk assessment requires managers concerning about the impact of changes which can be found in the external and internal environment of the business. The principles include:
- Specifying clear objectives to facilitate the identification and assessment of risks relating to the goals.
- Identifying the risks to achieving its goals in the entire organization and analysis of risks as a foundation for determining how to manage risk.
- The possibility of fraud in assessing risks to obtain the objectives.
- Identify and evaluating changes which could have significant effectiveness on internal control system.
2.1.3. Control Activities
Control activities are actions regulated through policies and procedures to help ensure that management's direction was practiced to reduce or eliminate risk in accomplishing organiation’s goals. Control activities are conducted at all levels of an organization at various stages in the business process and technology environment. The division of tasks is usually built in to the operating controls are selected and developed. When the division of duties is impossible, impractical, the managers select and develop alternative control activities. The principles include:
- Selecting and developing control activities in order to contribute to reducing the risks in accomplishing goals at acceptable level.
- Selecting and developing common control activities in technology to support the fulfillment of the objectives.
- Implementing control activities through policies, but these policies will be set up to the expectations and the process of implementing these policies.
2.1.4. Information and Communication
Information is essential for the organization to operate internal control system to support the accomplishment of its goals. Management attain or create and use the helpful and quality information from both inside and outside to facilitate the operation of the other components of internal control. Communication is an ongoing process, repeated of offering, sharing and collecting necessary information. The principles include:
- Obtaining or creating and using the credibility and quality information to fulfil the operation of the other components.
- Communicating information through organization, including the objectives and responsibilities about internal control.
- Communicating with external parties on issues affecting the functioning of other components.
2.1.5. Monitor Activities
The regular monitoring built into the process at different activity levels of the organization to change in scope and frequency, depending on the assessment of the risks, the effectiveness of regular monitoring and other awareness of management. The principles include:
- Selecting, developing, implementing regularly or separately monitoring to clarify the composition of the internal control system are present and functioning or not.
- Evaluating and communicating about the internal control deficiencies in a timely manner to parties responsible for remedial action.
2.2. Accounting Information System
As a key component in the organization's information systems, including report financial and non-financial information system, processing system and operating management reporting system. An effective accounting information system comprises three secondary processing systems are General Ledger/Financial Reporting System(GL/FRS), Transaction Processing System(TPS) and Management Reporting System(MRS). And every secondary processing system have their own functions as well as characteristics.
- Transaction processing system focus on the overall function of the information systems by transforming economic events into financial transactions. These transactions, then, are recorded in accounting books (journals and ledgers), and distributed essential financial information to operations personnel to support their daily operations. This process resolved business events which happen every day...
Fig.1: The relationship between accounting information system and organization information system (Jame Hall 2008)
- The general ledger system (GLS) and the financial reporting system (FRS) are two main components of this system. And a large amount of information of general ledger come from the transaction cycle. A summary of the activities of the transaction cycle are handled by the general ledger system to update the general ledger control accounts. Whereas, the financial reporting system measures and reports the status as well as changes of financial. Information of this system is the main information source of external parties.
- The management reporting system provides financial information according to demand of corporate management. Managers must address immediately daily business issues as well as plan and control their activities. Managers require different information for different types of decisions are made. Traditional reports of this system include budgets, variance reports, profit-volume-cost analyze and reports using current (rather than history cost data).
3. Relationship between accounting information system and internal control system
It can be seen that, internal control is split to five
separated components having each other supporting relationship and virtual
department for survival of organization. While, accounting information system
is an essential part of information system of enterprises, help collecting,
recording, processing and analyzing as well as supply helpful information for
organizatons operation. Hence, we research and find this relationship between
two systems according to five components of internal control system to figure
out similarities and differences as well as interactions of both systems. The
result was presented that point as following:
Table 3 shows the similar and different characteristics between accounting information system and internal control system. From then, the relationship between them is a mutual relation, interaction and supporting each other to achieve objectives of each one. This relationship is illustrated clearly following the figure 2.
Fig.2: The interaction between accounting information system and internal control system
In general, both of the systems, accounting information system and internal control system, have similar and different characteristics about target, control environment, risk assessment, control activities, information and communication and monitoring activities. Hence, the relationship between two systems is mutual relation, as independence as supporting each other forward to obtain objectives of entity. And it look like that, internal control system have the role bigger than accounting information system.
4. Conclusion
Overall, both the internal control system and accounting information system contribute to the control of resources, ensuring effectiveness in resources using as well as prevent fraud and corruption in organizations. However, while the accounting information system aims to collect, process and provide non-financial and financial information to parties of internal and external (financial reporting system focus on supply for the external parties more than internal parties and management reporting system is converse) are conducted by the accounting staff and accounting chief , the internal control system concentrates on risk assessment activities to achieve organizations objectives.
Thus, as the role like the final result using people of the accounting information system designed in an organization, accountants must have a clear and strong view about their requirement with person who designed system and internal auditors (as part of the internal control system) have to perceive their role and position in the effective maintenance of operation of accounting information system. And, the leader always commit to the pursuit of operational efficiency in an organization as well as the operational efficiency in the internal control system, make sure of the independence of this department in the internal activities and policies.
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MỐI QUAN HỆ GIỮA HỆ THỐNG THÔNG TIN KẾ TOÁN
VÀ HỆ THỐNG KIỂM SOÁT NỘI BỘ
● TS. TĂNG TRÍ HÙNG
Khoa Kế toán - Trường Đại học Tôn Đức Thắng
● ThS. NGUYỄN HỮU THIỆN
Khoa Kế toán - Trường Cao đẳng Công nghệ Thủ Đức
● NGUYỄN HIẾU TRUNG
Phó phòng Tin học - Cục thuế Tỉnh Tiền Giang
● LÊ THÙY DUNG
Công ty Tư vấn Kiểm toán Rồng Việt (VDAC)
TÓM TẮT:
Hệ thống kiểm soát nội bộ và hệ thống thông tin kế toán trong doanh nghiệp có ảnh hưởng và tác động lẫn nhau như thế nào? Nghiên cứu này được thực hiện nhằm phân tích và chỉ ra mối quan hệ của hai hệ thống này. Kết quả nghiên cứu cho thấy rằng, mặc dù hai hệ thống có chức năng khác nhau, nhưng đều hỗ trợ lẫn nhau và cùng hướng đến các mục tiêu quan trọng của tổ chức như duy trì và bảo vệ nguồn lực, cung cấp thông tin một cách chính xác và kịp thời cho quá trình ra quyết định của nhà quản lý. Nhà quản lý có thể tham khảo/sử dụng kết quả nghiên cứu để xây dựng, duy trì và vận hành hiệu quả các hệ thống này, đảm bảo sự phát triển và nâng cao lợi thế cạnh tranh của doanh nghiệp.
Từ khóa: Thông tin kế toán, hệ thống thông tin kế toán, kiểm soát nội bộ.
Xem tất cả ấn phẩm Các kết quả nghiên cứu khoa học và ứng dụng công nghệ số 09 tháng 08/2017 tại đây
