Week 8 Chapter 16 The General Ledger and Business Reporting (GLBR) Process

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School
Grantham University **We aren't endorsed by this school
Course
ACCT 531
Subject
Accounting
Date
Nov 14, 2023
Pages
48
Uploaded by DeaconIceBaboon3308 on coursehero.com
Chapter 16: The General Ledger and Business Reporting (GL/BR) Process Main content Chapter Introduction Learning Objectives After reading this chapter, you should be able to: Describe how the business processes discussed in Chapters 10 , 11 , 12 , 13 , 14 and 15 provide data required for general ledger (GL) updates. Recognize how the GL and business reporting (BR) subsystems support an organization's external and internal reporting functions. Recognize the limitations of the traditional GL approach in contemporary systems. Describe the technological trends and advances in reporting. Analyze control issues and control plans associated with the GL and related BR extensions. In your previous accounting courses you learned to read and prepare financial statements such as the Income Statement, the Balance Sheet, the Statement of Owner's Equity, and the Balance Sheet. These statements, and other business reports, are the central output of the Business Reporting (BR) process. Effective business reporting is important to managers as they guide their organization into various operating strategies and to investors and lenders as they allocate their capital between various organizations. The general ledger (GL) is the central repository of the data that is required for these business reports. With financial information captured accurately at the point of the business event and then flowing, on a timely basis, to the GL, the GL is prepared to output timely, relevant information using the most current accounting standards. Using modern information sharing techniques, that information is passed on to stakeholders in real time for use in stakeholder decision making. All of the business processes and controls you have learned up to this point bear on the data input to the GL and output through the business reporting process. Thus, the GL/BR process is
considered the center of any accounting information system. As a future accountant, in any specialty, it is essential you understand the GL/BR process. Synopsis The GL is the center of the business reporting process, but obviously not the only sub-system within the overall accounting information system . You have studied sub-systems for various business processes in Chapters 10 , 11 , 12 , 13 , 14 and 15 , now we reach the GL which is the focal point where all the financial data come together. During your studies of these earlier chapters, you may have realized that organizations need more than just GL/accounting-based reports. The general area of BR that supports an organization's decision-making needs requires the ability to blend internal business information related to operational and strategic performance with information obtained from a multitude of sources—including many from outside the organization. Topically, this chapter's organization is the same as that of the business process chapters. We start by defining the boundaries of the GL, explaining its functions, and examining its organizational context. We then proceed to a discussion of the logical system features. Sections on extended BR processes, technology, and controls follow. Main content 16-1 System Definition and Functions Similar to the business processes covered in Chapters 10 , 11 , 12 , 13 , 14 and 15 , the general ledger and business reporting (GL/BR) process is an interacting structure of people, equipment, activities, and controls that is designed to accomplish both operations and information system functions. Unlike the other business processes, the GL/BR process has fewer operational functions; it focuses mainly on information functions. Whereas the other processes perform important functions related to their "work" of providing goods
and services to customers, the work of the GL/BR process is the processing and communicating of information. What are the important information service functions of the GL/BR process? This chapter emphasizes two categories: GL activities and other BR. The general ledger (GL) process includes the following: Accumulating data, classifying data by GL accounts, and recording data in those accounts. Driving the financial reporting, BR , and other reporting by providing the information needed to prepare external and internal reports. The business reporting (BR) process encompasses the following: Preparing general purpose, external financial statements (e.g., the "conventional four" that you have studied in other accounting courses: balance sheet, income statement, statement of owners' equity, and statement of cash flows). Ensuring that the external financial statements conform to generally accepted accounting principles (GAAP) or other required standards; therefore, among other things, the statements must contain appropriate footnote disclosures . Generating Web-based reports of financial statements and related BR information for dissemination via the Internet. Supporting the generation of both ad hoc business reports and predetermined business reports that support operational and strategic decision making. Main content 16-2 Organizational Setting
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