1. 總帳及報告循環
General Ledger
And
Business Reporting
(GL/BR) Process

2. GL/BR is a Spoke on AIS Wheel
The GL/BR process
Assembles financial information for both internal and external users
Depends on process controls for accuracy and completeness
Relies on pervasive controls for system security
Documentation of effective controls is required by Sarbanes-Oxley

3. Functions of GL/BR GL
accumulating data, classifying data by GL accounts, recording data in those accounts
fueling FR, BR and other reporting subsystems

4. Functions of GL/BR, Cont’d.
preparing general-purpose, external financial statements
ensuring that F/S conform to GAAP
generating web-based forms
generating ad hoc & predetermined business reports

5. GL/BR Horizontal perspective
1. Business process feeders send updates to the business reporting department.

6. GL/BR Horizontal perspective
2. Treasurer notifies the business reporting department of investing transaction activities.

7. GL/BR Horizontal perspective
3. Treasurer notifies the business reporting department of financing transaction activities.

8. GL/BR Horizontal perspective
4. Controller notifies the business reporting department of various adjusting entries.

9. GL/BR Horizontal perspective
5. Finalized budget figures are sent to the business reporting department from the budgeting department.

10. GL/BR Horizontal perspective
6. Adjusted trial balance figures are sent from the business reporting department to the financial reporting officer.

11. GL/BR Horizontal perspective
7. Actual and budget figures are sent from the BR department to the budgeting department; the actual results will be one of the inputs used in formulating next period’s budgets.

12. GL/BR Horizontal perspective
8. Actual and budget figures are sent by the business reporting department to the managerial reporting officer.

13. GL/BR Horizontal perspective
9. Financial reporting officer sends GAAP-based financial statements to Treasurer, Controller, and outside parties (owners, banks, SEC)

14. GL/BR Horizontal perspective
10. Managerial reporting officer sends performance reports to various managers.

15. E-Business Angle
Operational stores are financial information stored in databases used to create the chart of accounts, GL and financial reports
Manual Reports
The old method of manually preparing financial reports
Financial reports are comprised of text and data from the operational data stores formatted as financial statements
Often data had to be re-keyed for each different report created
XBRL Enabled Reports
Operational store data contains descriptive (semantic) tags
XBRL enabled report reads descriptive tag and merges data into report
Data from one data store can be used to generate many different reports including Web reports without re-keying

16. Internal and External Business Reporting Flows

17. Responsibility Accounting/Reporting System
Duties of managerial reporting officer
Reports to assist internal management decision making
Performance reports comparing actual performance with budgeted performance
Reports are most detailed at lowest levels of management, least detailed at highest levels of management
It ties into the concept of responsibility accounting

18. Responsibility Accounting Performance Reporting

19. GL/BR Process: Context Diagram
Various feeder processes provide event information
Source of internal and external financial reports

20. GL/BR Process: Level 0 DFD
Detail of common GL/BR processes

21. GL Hierarchical Coding
1113 Cash in Bank
1xxx = assets
x1xx = current assets
xx1x = cash accounts
xxx3 = cash in bank
1111 might mean petty cash 1112 might mean change fund 1121 might mean trade accounts receivable 1122 might mean receivables from officers

22. Chart of Accounts
Must be flexible to meet the firm’s financial and managerial reporting needs
For a multi-entity firm, there is need to code for departments, geographical regions, product lines, divisions, and special reporting entities
Should accommodate “rolling up” or consolidating accounts into statements using different forms

23. Sarbanes-Oxley Act of 2002 Section 302 Section 401 Section 404
Requires CEO and CFO to certify that financial statements contain neither material untrue facts nor omit material facts.
Penalty for violation of section 302 up to 20 years prison and $5 million in fines
Section 401
Requires financial statements that clearly reflect the economic reality of business events
Section 404
Defines report on internal control that must be provided with annual report
Requires management assertion and auditor attestation on internal control effectiveness
Section 409
Requires rapid and current disclosure of information regarding material changes in financial conditions

24. Current Environment of Financial Reporting
Today’s environment demands rapid access to information
Investors want information sooner
Sarbanes-Oxley demands “rapid and current” disclosures
SEC has shortened the time companies have for reporting certain events
Real-time reporting of events summarized in the GL is just over horizon