CIS ENVIRONMENTS - STAND-ALONE
PERSONAL COMPUTERS
Learning Outcomes: After the end of this module, the students
should be able to:
1. decipher the integral parts of a personal computer
2. understand the impact of computers on an accounting system
and in an audit
Personal Computer (PC)
- can be used in various configurations. These include:
a) A stand-alone workstation operated by a single user or a
number of users at different times;
b) A workstation which is a part of a local area network (LAN) of
PCs;
c) A workstation connected to a server.
Personal Computer (PC)
In a stand-alone PC environment, it may not be practicable or
cost-effective for management to implement sufficient controls to
reduce the risks of undetected error to a minimum level.
After obtaining the understanding of the accounting system and
control environment, the auditor may find it more cost-effective
not to make a further review of general controls, or application
controls, but to concentrate audit efforts on substantive
procedures.
Computer Hardware
CPU – is the principal hardware component of a computer. It
consists of the main storage unit , the arithmetic and logic unit ,
and the control unit
Main storage unit (memory) – is used to temporarily store
programs and data for processing.
Computer Hardware
Arithmetic and logic unit – accomplishes arithmetic tasks such
as addition, subtraction, multiplication, division, comparisons,
and other types of data transformations.
Control unit – regulates the activities of the other units and
devices by retrieving machine language instructions from the
main storage units and then interpreting the instructions.
Computer Software
Software – is a series of programs or routines
that provide instructions for operating the
computer.
Computer Software
Categories:
1. Application programs (problem programs) – are designed to
accomplish specific objectives for users, such as processing
payroll or pricing the inventory.
2. Systems software – these are programs usually provided by
computer manufacturers which operate the computer system
and perform routine tasks for users.
Computer Software
Elements of a systems software:
1. Operating system – is a highly complex set of programs designed to:
a) Serve as means of communication between the computer hardware
and the human operator.
b) Schedule, load, initiate, and supervise the execution of programs.
c) Initiate and control input and output operations.
d) Manage and control compilers and utility programs.
2. Utilities – are a program or group of programs designed to perform
commonly encountered data handling functions, such as sorting files,
merging files, and copying data from one file to another.
Computer Installations
– are the facilities where the computer hardware and personnel are
located.
Categories:
1. In-house or captive computer – the organization owns or leases the
equipment and hires the necessary trained personnel to program, operate,
and control the various applications processed with the equipment.
2. Service bureau computer – the computer is used by an independent
agency which rents computer time and provides programming, key-
punching, and other services.
Computer Installations
3. Time-sharing – a system where in the organization acquires
a keyboard device capable of transmitting and receiving data
and, by agreement, the right to use a central computer facility.
This facility will furnish service to several users at the same time.
4. Facilities management – under this system, the organization
needing computer services may lease or purchase the
necessary hardware and installs it on its own premises. Then by
negotiation, an outside contractor with the necessary staff of
programmers and operators agrees to manage the facility
Impact of Computers on Accounting Systems
1. Documents are not maintained in readable form.
- For example, instead of preparing a sales order by hand, a
clerk enters the transaction directly into the system.
2. Processing of transactions is more consistent
- A computerized data processing system that has been properly
tested before being placed into use and that has appropriate
safeguards generally runs consistently so long as hardware
failures do not occur
Impact of Computers on Accounting Systems
3. Duties are consolidated.
4. Reports can be generated easily.
- Computerized systems provide for, or allow users to
generate, necessary reports about the status of
transactions or accounts in a minimal amount of time.