ACCT402 Introduction To Accounting

1. What internal control procedure(s) would be most effective in preventing the following errors or fraudulent acts?
a. A programmer obtained the payroll master file and increased his salary.
b. Some time cards were lost during payroll preparation; consequently, when paychecks were distributed, several employees complained about not being paid.
c. A large portion of the payroll master file was destroyed when the disk pack containing the file was used as a scratch file for another application.

2. Explain the eXtensible Business Reporting Language (XBRL) in detail?

3. Define Balanced Scorecard and and explain how it is reflect organization perspectives .set example from Saudi firms.

4. Explain the concept of Resources, events, agents (REA) and its Database design process.

Answers:

1. The issue presented in the question is that the internal controls that are required for the prevention of fraudulent acts. 

a) A programmer obtaining the payroll master file and increasing his salary falls under the purview of master file threat. To be more precise this kind of risk falls under unauthorized change that have been carried out to the payroll master data. The prevention of such a fraudulent act can be carried out by implementing the following steps:

• The segregation of duties in handling the master file like for instance, the updating of the master data by the HRM department and the issuance of the paychecks by the payroll department can enhance the protection of the master file.
• The access to the master file should also be controlled or restricted.
• The implementation of several controls on the data of the file by the application of passwords and log in codes which are essentially integrity controls
• Lastly, the master payroll file should be reviewed at regular intervals in order to keep a track of changes to master payroll data 

b) The cards getting lost during the preparation of the payroll master file can be controlled by the implementation of the following internal controls:

• The payroll register should be maintained, proper utilization of a payroll clearing account and a zero balance check should be implemented as a part of the internal control on the processing of data
• The review and monitoring of the payroll register by a supervisor should be carried out
• The employees receiving the paychecks should be issued earning statements in order to maintain a documentation of the earnings received by them 

c) A large portion of the payroll master file being destroyed could be, as well prevented, by the proper backing up of data of the payroll master file at regular intervals and the implementation of disaster recovery procedures. 

2. The extensible business reporting (XBRL) language is essentially a language that communicates and exchanges business information between the business systems. It provides the common foundation that can be used by every accounting body for the purpose of communicating their financial reporting issues and other related information among each other. The XBRL compiles the data presented in the financial reports in the various formats that are accessed by the users and yet again assists in analyzing such data. It has the features like, it constitutes of the financial data, which has been explained to every bit for the purpose of simplification of understanding by its users. It also aims to describe the various financial elements and define the relationship among each one of them. The extensible business reporting language lists down the steps that are required for understanding and carrying out the combination and calculation of different elements. Lastly, XBRL for making the financial statements easier to comprehend associates each element with an explanatory label. 

3. A balanced scorecard is essentially a report that enables its users with a providence of multidimensional perspective on the performance that is carried out by an organization. To be more precise, a balanced scorecard is fundamentally an effective tool in the hands of the management of an organization that utilizes it in measuring the performance of the organization. A balanced scorecard reflects the four aspects of business and highlights the performance of the concerned organization in the respect of these aspects. These four aspects are financial particulars of the organization, customers off the organization, internal operations carried out by the organization and their effectiveness and the innovation and learning obtained after going through such implemented operations. A balanced scorecard aims to reveal the results by obtaining a comparative study between the set targets by the management of the organization and the actual objectives achieved by them.

4. For instance, a firm based in Saudi Arabia, with the name Al Kout Industrial Projects Company, has utilized the balanced scorecard in developing its key performance indicators. It has been successful in such an attempt by increasing its revenue.

In a database designing process, the resources, events and agents refer to the different components that make the database effective and efficient. The resources refer to the components that have economic value and have been readily accepted by the management to be controlled and managed, that is known as events. Lastly, the resources (organization and people) required for such executing such a task are known as agents.