ACCT 4290 Chapter Notes - Chapter 2: Document Records, Purchase Order, Railways Act 1921
Chapter 2 – Part 1:
Data Processing Cycle:
4 operations performed on data to generate
meaningful
and
relevant
information
4 Steps of Data Processing Cycle
1) Data Input
2) Data Storage
3) Data Processing
4) Information Output
1) Data Input:
1st Step: capture transaction data and entering into system
• Usually triggered by a business activity
• Data must be collected about 3 facets per business activity
o Each activity of interest
o Resources affected by activity
o People participating in each activity
• Historically, most businesses used PAPER source documents – but now it’s computerized
o A source document: documents used to capture transaction data at source! When it
takes place! Ex: sales order, purchase order, employee time card etc.
o Turnaround Documents: records of company data sent to an external party then
returned to the system as input
▪ in machine readable form to facilitate subsequent processing input records
▪ ex: Utility Bill sent to customer, returned with payment and read by special
scanning device upon return
o Source Data Automation: the collection of transaction data in machine-readable form
at the time and place of origin
▪ Ex: point-of-sale terminals or ATMs
2nd Step: Make sure captured data are accurate + complete
• Using source automation or well-designed turnaround documents and data entry screens
o Providing instructions or prompts on what data to collect
o Grouping logically pieced information together
o Using check-off boxes or pull-down menus to present available options
• Improve control via prenumbered source documents or having system automatically assign
sequential number to the transaction
o Verifies all transactions were recorded and none have been misplaced
3rd Step: make sure company policies are followed
• Approving or Verifying a transaction etc.
ACCT4290: IT Auditing
Winter 2019
Chapter 2: Conceptual Foundations of Accounting Information Systems