Task Team of FUNDAMENTAL ACCOUNTING School of Business. Sun Yat-sen University Adaptation to organization structure. The accounting system must be tailored to the organizational structure of each business Internal Controls faIS The objectives of an accounting information system may differ from entity to entity, but most information systems have as an objective the provision of reliable information on a timely basis Internal controls are a serial procedures that are designed to provide management with some degree of assurance that the information provided by the accounting information system is reliable Competent personnel and rotation of duties. It is necessary that all accounting employees be lequately trained and supervised to perform their jobs. It is also advisable to rotate clerical ob to job Assignment of responsibility. To motivate employees work efficiently, their responsibilities must be clearly defined Separation of responsibility for related operation. To decrease the possibility of inefficiency, errors, and fraud, responsibility for a sequence of related operations should be divided among two or more persons. For example, no one individual should be authorized to order merchandise verify the receipt of the goods, and pay the supplier Separation of operation and accounting. Responsibility for maintaining the accounting records should be separated from the responsibility for engaging in business transactions and for the custody of the firms assets Proofs and security measures. Proofs and security measures should be used to safeguard business assets and assure reliable accounting data. Independent review. To determine whether the other internal control principles are being effectively applied, the system should be periodically reviewed and evaluated by internal auditors independent of the employees responsible for operations The accounting process The accounting process is a series of activities that begins with a transaction and ends with the closing of the books. The major steps of the accounting process are as follows Identify the transaction or other recognizable event; Prepare the transaction s source document such as a purchase order or invoiceTask Team of FUNDAMENTAL ACCOUNTING School of Business, Sun Yat-sen University Adaptation to organization structure. The accounting system must be tailored to the organizational structure of each business Internal Controls of AIS The objectives of an accounting information system may differ from entity to entity, but most information systems have as an objective the provision of reliable information on a timely basis. Internal controls are a serial procedures that are designed to provide management with some degree of assurance that the information provided by the accounting information system is reliable and provided on a timely basis. These procedures include: Competent personnel and rotation of duties. It is necessary that all accounting employees be adequately trained and supervised to perform their jobs. It is also advisable to rotate clerical personal periodically from job to job. Assignment of responsibility. To motivate employees work efficiently, their responsibilities must be clearly defined. Separation of responsibility for related operation. To decrease the possibility of inefficiency, errors, and fraud, responsibility for a sequence of related operations should be divided among two or more persons. For example, no one individual should be authorized to order merchandise, verify the receipt of the goods, and pay the supplier. Separation of operation and accounting. Responsibility for maintaining the accounting records should be separated from the responsibility for engaging in business transactions and for the custody of the firm's assets. Proofs and security measures. Proofs and security measures should be used to safeguard business assets and assure reliable accounting data. Independent review. To determine whether the other internal control principles are being effectively applied, the system should be periodically reviewed and evaluated by internal auditors independent of the employees responsible for operations. The accounting process The accounting process is a series of activities that begins with a transaction and ends with the closing of the books. The major steps of the accounting process are as follows: Identify the transaction or other recognizable event; Prepare the transaction's source document such as a purchase order or invoice. Analyze and classify the transaction