9/29/2010
1
Accounting Systems:
Design and Control
Chapter 12 – Production Cycle (Part 2)
Ms. Pam J. Schmidt
PhD Candidate
Dept. of Accounting
School of Business Administration
Decisions to make in Production Cycle
1.
What mix of
products
should be produced?
2.
How should products be
priced
?
3.
How should
resources
be allocated?
4.
How should
costs
be managed and
performance evaluated?
These decisions require
cost data
well beyond that
required for external financial statements.
Figure 12-2:
Production Cycle - Level 0 DFD
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9/29/2010
2
Production Cycle: Threats and Controls
AIS should provide controls to meet these objectives :
1.
All transactions are properly authorized
.
2.
All recorded transactions are valid
.
3.
All valid and authorized transactions are recorded
.
4.
All transactions are recorded accurately
.
5.
Assets are safeguarded
from loss or theft.
6.
Business activities are performed efficiently
and effectively
.
7.
The company is in compliance
with all applicable laws and
regulations.
8.
All disclosures
are full and fair.
Controls for the Production Cycle
•
Where are the greatest risks?
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- Fall '10
- Schmidt
- Accounting, Authorization, Production and manufacturing, Modular BOM
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