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Overview
Background
Purpose
The purpose of this lecture notes Accounting and the Use of Computers is
to introduce only the reader on the many benefits that a company may enjoy in
using computers in their accounting system.
In this unit
Marivic D. Valenzuela-Manalo
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Computer Advantages
Overview
Advantages
The computer has the following advantages over the manual system we use in
this manual (Anthony, R., 1997):
The computer is much faster.
The computer does not make copying errors. For example, when the
computer writes a check, the amount of the check is always the amount
credited to Cash and debited to some other account. The amounts reported
on the financial statement are the same as the balances in the accounts.
The computer assures that debit entries always equal credit entries. It will
Marivic D. Valenzuela-Manalo
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It is a machine
If a person makes the initial input to the computer, an error made by that
person might not be detected. For example, if a check is supposed to be for
P879 and the bookkeeper keys in P897, the computer may not detect the
error.
Despite the built-in safeguards, the computer cannot detect certain types of
fraudulent entries. As examples of multimillion peso errors reported by some
companies demonstrate, there is no guarantee that errors do not exist.
Therefore, there must be an audit function to check the possibility of fraud or
error.
The computer may perform most of the bookkeeping functions, but it cannot
replace the accountant. The accountant specifies the rules to be followed in
routine transactions. The accountant must tell the computer how to make the
different entries. If the accountant makes an incorrect decision, the accounts
will be incorrect.
Marivic D. Valenzuela-Manalo
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