Topic 4 -General ledger & Financial reporting system

1) General ledger system

A) Definition
-The general ledger system is a hub connected to other system of the firm through information flows
-Transaction cycles process individual events that are recorded in special journals and subsidiary
accounts
-Summaries of these transactions flow into the GLS and become sources of input for the management
reporting system and financial reporting system
-Information also flows from the FRS as feedback into GLS

B) Definition of Journal Voucher

-The source of input to the general ledger is the journal voucher
-A journal voucher represent summaries of similar transactions, identifies the financial amounts and
and affected general ledger account
-Routine transactions, adjusting entries and closing entries are all entered into general kedger via
journal voucher

C) General ledger system database

1) General ledger master file 2)General ledger history file 3)Journal voucher file
-Principal file in GLS database -Used for comparative financial -all journal vouchers of the
on chart of accounts support current period
4)Journal voucher history file 5)Responsibility center file 6)Budget master file
-Journal vouchers of past period -Financial data by responsibility -budget data by responsibility
for audit trails centers for MRS centers for MRS

2) Chart of accounts
A) Definition
-COA is a code listing of the accounts such as assets, equities, revenues and expenses related to a
company
-The composition of the COA is determined mainly by the information needs of external and internal
users. These needs are reflected through financial statement and other financial reports that must be
designed first
-The output dictate the design of COA
-The information needs of users similarly determine the classification and coding of the COA

3) Data coding schemes （太多 transaction 所以要用 code 来代替)

-Business organizations process large volumes of transactions that are similar in their basic attributes
-Thus, data coding involves creating simple numeric or alphabetic codes to represent complex
economic phenomena that facilitate efficient data processing.
Advantages of data coding in an AIS system with codes: Disadvantage of a system without codes:
• Concisely representing large amounts of complex • Uncoded entry takes a great deal of
information that would otherwise be unmanageable. recording space, is time-consuming to
• Providing a means of accountability over the record, and is obviously prone to many
completeness of the transactions processed. types of errors.未编码的录入占用大量的
• Identifying unique transactions and accounts within a 记录空间，耗时，并且明显容易出现各
file. 种类型的错误。
• Supporting the audit function by providing an effective
audit trail.
-简洁地表示大量复杂信息，否则这些信息将无法管
理。
-提供对已处理交易完整性的核对手段。
-在文件中标识唯一的交易和账户。
-通过提供有效的审计追踪，支持审计功能。
3) Type of Data coding (5)

1) Sequential codes(跟数学号码) 2) Block codes(跟 COA 一样用 code)

-Represent item in sequential order (ascending -A numeric block code is a coding scheme that
or descending) assigns ranges of values to specific attributes such
as account classification
-Used to pre-number source document
(001,002,003) -Represent whole classes by assigning each class a
specific range within the coding scheme
-Advantages:
• Allows the system to track each transaction -Used for COA which is the basis of the general
processed and to identify any out-of-sequence ledger. A COD is listing of an organization’s
documents.并识别任何不按顺序的文件 accounts showing the account number and name
• Alerts management on missing or misplaced
transaction. -Advantage:
• Allows for the insertion of new codes within a
-Disadvantages: block without having to reorganize the entire
• arbitrary information 信息随意 coding structure
• hard to make changes and insertions 难以进
-Disadvantages
行更改和插入
•Arbitary information-less meaning full
3. Group codes（很像 IC 每个 code 有不同意 4. Alphabetic codes (以字母来排)
思)
-Group codes are used to represent complex -are alphabetic characters assigned sequentially.
items or event involving two or more pieces of Used for the purposes as numeric codes
related data with specific meaning
-Can be assigned sequentially or used in block and
-Advantages: group coding techniques
•Facilitate the presentation of large amounts of Eg(AA,AB,A100,A200)
diverse data 有助于呈现大量不同的数据。
• Allow complex data structures to be -may be used to represent large numbers of item
represented in a hierarchical form that is and the number of possible represents per space is
logical and more easily remembered by human 26.可以用来表示大量的项目；每个空间的可能
允许以逻辑和更易记的分层形式表示复杂的 表示数量为 26
数据结构
• Permit detailed analysis and reporting both -Advantage:
• Capacity to represent large number of items -
within an item class and across different classes
of items 允许在项目类别内部和跨不同类别 increased through the use of pure alphabetic codes
or alphabetic characters imbedded within numeric
的项目之间进行详细分析和报告。
codes (alphanumeric codes)能够表示大量的项目 -
通过纯字母编码或嵌入数字编码中的字母字符
-Disadvantages:
• arbitrary information 信息随意 （字母数字混合编码）
• Overused due to presentation of diverse
-Disadvantages:
由于呈现多样化的信息而 • Difficult to rationalize the meaning of codes that
information
被过度使用 have been sequentially assigned
• Sorting records that are coded alphabetically tend
to be more difficult for users 对使用字母编码的记
录进行排序通常更难操作
5. Mnemonic codes(有意思的字母)
-Alphabetic characters used as abbreviations 缩 写 , acronyms 首 字 母 缩 略 词 , and other type of
combination
-Do not require users to memorize the meaning since the code itself is informative- and not arbitrary
NY=New York, Acctg=Accounting
-Advantage:
Do not require the user to memorize the meaning and the code itself conveys 传达 a high degree of
information

-Disadvantage:
Limited in their ability to represent items within a class 在代表某一类别中的项目方面能力有限

3) Financial reporting system

• The law dictates management’s responsibility for providing stewardship information to external
parties.法律规定了管理层向外部方提供监护信息的责任
• Much of the information provided takes the form of standard financial statements, tax returns, and
documents required by regulatory agencies such as the Securities and Exchange Commission (SEC).提
供的信息大部分采用标准财务报表、税务申报表以及证券交易委员会等监管机构要求的文件形
式
• The primary recipients of financial statement information are external users, such as stockholders,
creditors, and government agencies. 财务报表信息的主要受众是外部用户，如股东、债权人和政
府机构
• Because the community of external users is vast and their individual information needs may vary,
financial statements are targeted at a general audience.由于外部用户的社区庞大且其个体信息需
求可能有所不同，财务报表是针对一般受众的。
• Sophisticated users are users of financial reports who understand the conventions and accounting
principles that are applied and that the statements have information content that is useful.精通财务
报告约定和会计原则，并理解报表具有有用信息内容的用户被称为复杂用户

4) Financial reporting procedures

• Financial reporting is the final step in the overall accounting process that begins in the transaction
cycles.
• From this point, the following steps occur:
1. Capture the transaction. 2. Record in special journal. 3. Post to subsidiary ledger.
4. Post to general ledger. 5. Prepare the unadjusted trial 6. Make adjusting entries
balance
7. Journalize and post adjusting 8. Prepare the adjusted trial 9. Prepare the financial
entries. balance. statements.
10.Journalize and post the closing entries. 11.Prepare the post-closing trial balance

5) XBRL—Reengineering Financial ReportingXBRL（可扩展业务报告语言）

• Online reporting of financial data
• HTML (Hyper Text Markup Language)
• XBRL (extensible Business Reporting Language) is an XML-based language that was designed to
provide the financial community with a standardized method for preparing, publishing, and
automatically exchanging financial information, including financial statements of publicly
held companies.
• The objective of XBRL is to facilitate the publication, exchange, and processing of financial and
business information.它的目标是促进财务和业务信息的发布、交换和处理
• XML (extensible Markup Language) is a metalanguage for describing markup languages that can be
used to model the data structure of an organization’s internal database.（可扩展标记语言）是一种
描述标记语言的元语言，可以用来建模组织内部数据库的数据结构
**
用途：

HTML 主要用于创建和呈现网页内容，它包含了定义网页结构和呈现方式的标签，例如标题、
段落、链接、图像等。
XML 用于传输和存储数据，它允许用户自定义标签和数据结构，以适应特定的应用需求。XML
的设计更加通用，可以用于各种领域的数据交换和存储。
语法：

HTML 具有固定的标签和属性，用于描述文档的结构和样式，并且必须符合 HTML 规范。

XML 允许用户定义自己的标签和属性，因此具有更大的灵活性。XML 文档必须是良好格式化的，
并且遵循 XML 规范。
数据类型：

HTML 主要用于描述文档的外观和布局，它的标签和属性通常预定义，并且专注于呈现内容。
XML 用于描述数据的结构和内容，它的标签和属性可以根据需要自由定义，并且专注于数据的
组织和交换。
总的来说，HTML 和 XML 在用途、语法和数据类型方面有明显的区别，但它们都是重要的标记
语言，在网络和软件开发中发挥着不可替代的作用

A) XBRL
• XBRL taxonomy are classification schemes that are compliant with the XBRL Specifications to
accomplish a specific information exchange or reporting objective such as filing with the Securities
and Exchange Commission.在 XBRL 中，术语“XBRL 分类法（taxonomy）”指的是符合 XBRL 规范的
分类方案，用于实现特定的信息交换或报告目标，例如向证券交易委员会（SEC）提交报告。
• XBRL instance documents (the actual financial reports) are the mapping of the organization’s
internal data to XBRL taxonomy elements.而“XBRL 实例文档（instance documents）”则是指将组织
的内部数据映射到 XBRL 分类法元素的实际财务报告。换句话说，XBRL 实例文档是真实的财务
报告，通过使用 XBRL 分类法的标签来标识和描述报告中的各种信息。

B) SOX (CONTROLLING THE GL/FRS)

• SOX legislation requires that management design and implement controls over the financial
reporting process.
• Potential risks to the FRS include the following:
1. A defective audit trail 审计追踪不完整
2. Unauthorized access to the general ledger 对总账的未经授权访问
3. GL accounts that are out of balance with subsidiary accounts 总账账户与子账户不平衡
4. Incorrect GL account balances because of unauthorized or incorrect journal vouchers 未经授权或
不正确的记账凭证导致总账账户余额错误

C) COSO control issues

1) Transaction 2) Segregation of 3) Access Controls 4) Segregation of
Authorization Duties Duties

5) Independent Verification 6) IT Application Controls

• The journal voucher listing is a listing that

provides relevant details about each journal
voucher received by the GL/FRS.
• The general ledger change report presents the
effects of journal
voucher transactions on the general ledger
accounts.

D) Internal Control Implications of XBRL

• Taxonomy Creation
• Taxonomy Mapping Error
• Validation of Instance Documents
5) THE MANAGEMENT REPORTING SYSTEM
A) Definition
• Management reporting is often called discretionary reporting 自主报告 because it is not mandated
强制性, as is financial reporting.
• An MRS that directs management’s attention to problems on a timely basis promotes effective
management and thus supports the organization’s business objectives.

B)FACTORS THAT INFLUENCE THE MRS

• Management Principles
• The formalization of tasks is the subdivision of organizational areas into tasks that represent full-
time job positions. An organizational chart shows typical job positions in a manufacturing firm.任务的
正式化是将组织领域细分为代表全职工作职位的任务。组织结构图显示了制造公司中的典型工
作职位。
• Responsibility refers to an individual’s obligation to achieve desired results. Authority is the right to
make decisions pertaining to areas of responsibility.责任指的是个人达成期望结果的义务。权力是
决定与责任领域相关事务的权利
• Span of control refers to the number of subordinates directly under a manager’s control.控制范围
指的是直接受管理者控制的下属人数
• The principle of management by exception is a concept that managers should limit their attention to
potential problem areas rather than being involved with every activity or decision.例外管理原则是一
个概念，即管理者应该将注意力限制在潜在的问题领域，而不是参与每一个活动或决策。