Reworking with a Legacy Financial Accounting System: Lessons from a Pharma Company

2005 ◽  
Vol 30 (3) ◽  
pp. 79-92 ◽  
Author(s):  
M P Gupta ◽  
Deepak Bhatia
Keyword(s):  
Financial Reporting ◽  
Systems Engineering ◽  
Data Entry ◽  
Financial Accounting ◽  
Accounting System ◽  
Management Support ◽  
Erp Implementation ◽  
Legacy System ◽  
Lower Productivity ◽  
New System

The issues of legacy systems become more pronounced at the time of a major IT upheaval such as implementation of ERP or business process reengineering (BPR) exercise. In this changing scenario, there is a need to update the systems and skills and integrate them with the emerging enterprisewide infrastructure. The main problems with a legacy system are that it remains insulated from the update attempt that largely follows market trend thus rendering it outdated and also that its documentation is poor. In this paper, the authors share the experiences of a project undertaken in one of India's leading multinational pharmaceutical companies (MPC) which was to rework on the existing legacy system and design a new application. The legacy system referred to here is the company's financial accounting system which was developed in 1993. Originally designed in COBOL, it was subsequently improved as and when the finance department put forth its requirements. The major downside of the system was that it had virtually no documentation and no one from the original team that developed the system was still working with the company. This made it all the more difficult to understand and document the system. Also, the system had a high response time thus leading to lower productivity of the data entry staff and other users. Further, it had a limited reporting capability and was basically used for storing financial data. When this project was undertaken for rework, the MPC was in the process of implementing an ERP package for its manufacturing and, therefore, it was necessary to bring all its applications to the same database structure. The most obvious question was whether to discard the legacy system and implement ERP's accounting module. The management, however, decided to retain and rework on the legacy system with the intention of integrating the new system with ERP. The driving point in favour of this decision was the realization that the legacy system was regarded as very critical for the accounting function and also that the users had become conversant with the system despite it being not very user-friendly. Also, there was no risk of failure. Incidentally, the review of the legacy system and ERP implementation coincided thereby easing out concerns of managing organizational changes as the company already had its strategy and preparedness in place for the scenario emerging out of ERP implementation. The computer-aided systems engineering (CASE) tool was chosen for designing the new system because of its inherent advantages in handling software projects which are as follows: The well-documented new system simplifies the maintenance jobs and, therefore, fewer people are required for its maintenance (this was the major problem with the previous system). It has removed the dependence of the management on a small set of people who specialized in the maintenance of an undocumented system. Financial reporting has become easier and better. The experience on this project made it amply clear that the top management support can make or mar a project. This is one of the most popular hypotheses in the information systems literature which has been found to be true in the case of the MPC.

Competition as a Discovery Procedure in the P ractice of Accounting

2017 ◽  
pp. 315-330
Author(s):  
Edgar Duarte
Keyword(s):  
Financial Reporting ◽  
Free Market ◽  
Current System ◽  
Financial Accounting ◽  
Accounting System ◽  
Financial Reports ◽  
Complex Relation ◽  
Goods And Services ◽  
Use Of Resources ◽  
Other Information

Even though they developed separately as two distinct disciplines, there is a complex relationship between accounting and econom-ics. For example: 1) accounting is a means that makes economic calculation possible; it provides the managers, the investors and lenders (current and potential), and the public in general with in-formation that aids them in assessing the profitability and the ap-propriate use of resources of a business. Although mainly histori-cal, accounting information allows them to form an expectation of future performance and hence it is useful for making economic decisions; 2) economics theorizes on the same ele-ments which ac-counting endeavors to measure; 3) the market for financial report-ing, i.e. for the financial statements and other information dis-closed periodically by companies, which is one of the products of an accounting system, is a market like that of any other good or ser-vice and it is therefore subject to the same economic analysis. Given this complex relation-ship, there are several paths an eco-nomic work on accounting could take. This author will approach his study first by acknowledging that accounting is an evolving institution, one of spontaneous forma-tion that has not yet reached, and probably will never reach, its fi-nal form. Although its form and practice has been subjected to regulation by dif-ferent governments and governmental agencies for centuries, in particular the market for fi-nancial reports of pub-lic companies, that fact does not change its spontaneous character. The author will also argue that competition is underutilized as a discovery procedure in accounting in general and in the prepara-tion of financial reports in particular. As a consequence of govern-ment intervention, better and less expensive ways of serving the consumers of financial reports have not yet been discovered under the current system. As an economist and practicing accountant, this author could be tempted to try to prescribe the form and substance of the finan-cial reports. Although admittedly economics could inform a lot about this, and the author does not deny the importance of those investigations for the marketplace of ideas, one of the main conclu-sions of this essay is that one of the tasks of competition is pre-cisely to discover the characteristics of the goods and services that best serve the consumers and hence, to discover the substance and form of the financial reports that best aid the users for their par-ticular ends. After this introduction, in the second part of this essay, the au-thor will summarize the conceptions that Friedrich A. Hayek de-veloped and that are relevant for his analysis. In the third part, an elaboration of accounting as a language is provided. In the fourth part, a brief summary of the history of accounting, since the spon-taneous emergence of the double entry bookkeeping system in me-dieval Europe until our times, will be presented, along with the origin and alleged justifications of government intervention in ac-counting. In the fifth part, the author will enumerate some of the problems presented by such intervention. In the sixth part, to con-clude this essay, a general prediction of a free market in accounting services will be presented. Financial reporting is a subset of accounting. Usually the same system fulfills several ends such as filling tax statements (tax ac-counting), tracking and allocation of cost elements to different products or services (cost accounting) and the preparation of fi-nancial reports for external users such as current and potential lenders and investors (financial accounting). In this work, the ar-guments are addressed in general to accounting and in particular to financial reporting. When names such as financial reporting, financial reports, financial accounting, external reporting and oth-ers similar are not explicitly mentioned, the arguments should be understood as applying to accounting in general.

scholarly journals Tantangan Pemerintah Pusat dalam Merubah Sistem Akuntansi dan Pelaporan Keuangan dari Half Accrual Accounting ke Full Accrual Accounting

2018 ◽  
Vol 1 (1) ◽  
pp. 044-048
Author(s):  
Tohirin Tohirin
Keyword(s):  
Financial Reporting ◽  
Financial Management ◽  
Government Regulation ◽  
Business Processes ◽  
Central Government ◽  
Accounting System ◽  
Accrual Accounting ◽  
State Finance ◽  
The Government ◽  
New System

Sesuai dengan Undang-Undang nomor 1 tahun 2004 tentang keuangan Negara dan Undang-Undang nomor 1 tahun 2004 tentang Perbendaharaan Negara serta Peraturan Pemerintah nomor 10 tahun 2010 tentang Standar akuntansi Pemerintahan, Pemerintah Pusat diharuskan membuat laporan keuangan berdasarkan basis akuntansi akrual mulai tahun 2015.Tulisan ini bertujuan menguraikan tentang tantangan yang harus dihadapi oleh pemerintah pusat untuk berpindah dari sistem yang sekarang digunakan yaitu Half AccrualAccounting ke sistem yang baru yaitu Full Accrual Accounting. Metode analisa yang digunakan dalam kajian ini adalah analisis statistika deskriptif. Paper ini akan memberikan gambaran singkat tentang apa yang telah dilaksanakan oleh Pemerintah Pusat di dalam menjalankan mandat dari Undang-Undang terkait Pengelolaan Keuangan Negara di era reformasi. Pemerintah pusat menghadapi tantangan saat harus meninggalkan sistem yang saat ini dipergunakan dengan pendekatan Half accounting Accrual dengan disupport oleh Aplikasi Saiba menuju sistem baru yang Full Accrual Accounting yang disupport oleh Aplikasi Sakti. Pertama, tantangan regulasi; Kedua, tantangan Sistem Informasi dan Teknologi; Ketiga, tantangan Sumber Daya Manusia; Keempat, tantangan resiko implementasi sistem baru dalam konteks pengelolaan keuangan negara; dan terakhir; Kelima, tantangan perubahan bisnis proses. Pemerintah pusat sesungguhnya belum sepenuhnya menjalankan mandat undangundang dalam menjalankan sistem akuntansi dan pelaporan keuangan karena belum menerapkan Full Accrual Accounting System. Kajian ini memberikan rekomendasi pemerintah untuk bisa bermigrasi dengan aman menuju sistem baru yang akuntabel dan reliabel   In accordance with Act No. 1 of 2004 concerning State Finance and Act No. 1 of 2004 concerning State Treasury and Government Regulation No. 10 of 2010 concerning Government Accounting Standards, the Central Government is required to make financial reports based on accrual accounting starting in 2015. This writing aimed to describe the challenges that must be faced by the central government to move from the system currently in use, namely Half Accrual Accounting to the new system, namely Full Accrual Accounting. The analytical method used in this study was descriptive statistical analysis. This paper provided a brief overview of what has been done by the Central Government in carrying out the mandate of the Laws relating to Management of State Finance in the reform era. The central government faced challenges when it comes to leaving the system that is currently being used with the Accrual Half accounting approach, supported by the Saiba Application to the new system namely Full Accrual Accounting supported by the Sakti Application. First, regulatory challenges; Second, the challenges of Information Systems and Technology; Third, the challenges of Human Resources; Fourth, the risk challenges of implementing a new system in the context of state financial management; and last; Fifth, the challenge of changing business processes. The central government actually had not fully implemented the legal mandate in carrying out the accounting and financial reporting system because it had not implemented a Full Accrual Accounting System. This study suggested the government to be able to migrate safely towards a new accountable and reliable system.

scholarly journals Financial accounting and reporting in developing countries: A South African perspective

1999 ◽  
Vol 2 (2) ◽  
pp. 222-239 ◽  
Author(s):  
Johan Oberholster
Keyword(s):  
South Africa ◽  
Developing Countries ◽  
South African ◽  
Developing Country ◽  
Financial Reporting ◽  
Financial Statements ◽  
Financial Accounting ◽  
Accounting System ◽  
Social Fabric ◽  
African Perspective

South Africa is currently going through major changes in political, social and other arenas. It is therefore appropriate to consider the effect of these developments on financial reporting in a changing environment. This paper explores the origins of the current South African accounting system, given its status as a developing country, and endeavours to show that financial reporting needs to be amended to reflect the changing face of the South Africa's social fabric, its status as a developing country, as well as the emergence of new users of financial statements. Certain recommendations are made to address these issues.

scholarly journals Penelitian dan Pengembangan Sistem Mutu Akuntansi Keuangan Pada Usaha Ternak Ayam Potong Blitar

2018 ◽  
Vol 12 (1) ◽  
Author(s):  
Defia Nurbatin
Keyword(s):  
Data Collection ◽  
Financial Reporting ◽  
Group Discussion ◽  
Quality System ◽  
Financial Accounting ◽  
Accounting System ◽  
Accounting Quality ◽  
Average Percentage ◽  
Product Test ◽  
Expert Validation

Abstract The purpose of this research is to arrange guidance of recording to financial reporting as model of development of financial accounting quality system at Cak Wanto chicken farm in Blitar. The method used in this research is the research & development model of DBR (Design Based Research) from Purwiyanto (2014) which is modified. Research phase starts from problem identification, data collection, product preparation, product test (expert validation) and final product refinement. Data collection techniques are Focus Group Discussion, observation, interview, and questionnaire (questionnaire). Questionnaire as an expert validation instrument consists of 4 aspects of the assessment of aspects of usability, convenience, completeness, and legibility. Techniques used to analyze data validation scoring results is to use a percentage technique with the category of interval Before-After technique. This study produces a quality system in the form of three SOPs that show the application of SOP can run effectively to be implemented with evidence of the average percentage results near perfect and in accordance with user needs. Keywords: Quality Accounting System, Standard Operating Procedures

scholarly journals Towards a new ecological and human type of national accounting for developing economies (The CARE/TDL model) (to be continued)

2020 ◽  
pp. 43-59
Author(s):  
Jacques Richard
Keyword(s):  
Financial Reporting ◽  
Developing Economies ◽  
Ecological Crisis ◽  
Financial Accounting ◽  
Accounting System ◽  
Reporting Standards ◽  
Historical Survey ◽  
National Accounts ◽  
Financial Reporting Standards ◽  
The One

The goal of this article is to show how today’s financial accounting system, notably the IFRS (International Financial Reporting Standards) and the related National accounts (primarily the famous GDP, Gross Domestic Product), are the main causes of today’s human and ecological crisis. This assertion is justified on the basis of an historical survey of the development of capitalist accounting since the end of the Middles Age, the time of its foundation. We prove that, in the form it was invented by big capitalists at that time (and used until today), the concept of capital-debt to be conserved has nothing to do with the one used by economists of either classical, neoclassical, or marxist schools and that it is a very dangerous weapon against the interests of the mankind and ecology.

scholarly journals PENGARUH PELATIHAN, DUKUNGAN MANAJEMEN PUNCAK DAN KEJELASAN TUJUAN TERHADAP EFEKTIVITAS SISTEM AKUNTANSI KEUANGAN DAERAH (Studi Empiris Pada Pemerintah Kabupaten Badung)

2020 ◽  
Vol 11 (2) ◽  
pp. 110-116
Author(s):  
Cok Istri Ratna Sari Dewi ◽  
Luh Putu Lusi Setyandarini Surya ◽  
Cokorda Krisna Yudha
Keyword(s):  
Random Sampling ◽  
Linear Regression Analysis ◽  
Simple Random Sampling ◽  
Financial Accounting ◽  
Top Management ◽  
Successful Implementation ◽  
Accounting System ◽  
Management Support ◽  
Top Management Support ◽  
The Government

Abstrcat This study aims to determine the effect of training, top management support and clarity of objectives on the effectiveness of the Regional Financial Accounting System (SAKD) in Regional Implementing Organizations (OPD) in the Government of Badung Regency. A successful implementation of the system is not only determined by mere technical mastery, the behavioral factors of individual system users can also determine the success of implementation. Training factors, top management support and clarity of objectives are needed to increase the effectiveness of the Regional Financial Accounting System (SAKD) in an organization to support the application of the system in meeting the demands of the public regarding transparency and accountability of public sector institutions. This study uses 132 civil servants who have a main duty to manage finances in the OPD at the Badung Regency Government as a research sample. Determination of the sample in this study using simple random sampling technique. The analysis technique used is multiple linear regression analysis. The results of the study found that training, top management support and clarity of objectives on the Regional Implementing Organization (OPD) in the Badung Regency Government had a positive effect on the effectiveness of the Regional Financial Accounting System (SAKD). Keywords: Clarity of purpose; effectiveness of the regional financial accounting system; top management support; training Abstrak Penelitian ini bertujuan untuk mengetahui pengaruh pelatihan, dukungan manajemen puncak dan kejelasan tujuan terhadap efektivitas Sistem Akuntansi Keuangan Daerah (SAKD) pada Organisasi Pelaksana Daerah (OPD) di Pemerintah Kabupaten Badung. Suatu keberhasilan implementasi sistem tidak hanya ditentukan pada penguasaan teknis belaka, faktor perilaku dari individu pengguna sistem juga dapat menentukan kesuksesan implementasi. Faktor pelatihan, dukungan manajemen puncak dan kejelasan tujuan diperlukan untuk meningkatkan efektivitas Sistem Akuntansi Keuangan Daerah (SAKD) dalam suatu organisasi untuk mendukung penerapan sistem tersebut dalam memenuhi tuntutan masyarakat tentang transparasi dan akuntabilitas lembaga sektor publik. Penelitian ini menggunakan 132 pegawai negeri sipil yang memiliki tupoksi untuk mengelola keuangan di OPD pada Pemerintah Kabupaten Badung sebagai sampel penelitian. Penentuan sampel dalam penelitian ini menggunakan teknik simple random sampling. Teknik analisis yang digunakan adalah analisis regresi linier berganda. Hasil penelitian menemukan bahwa pelatihan, dukungan manajemen puncak dan kejelasan tujuan pada Organisasi Pelaksana Daerah (OPD) di Pemerintah Kabupaten Badung berpengaruh positif terhadap terhadap efektivitas Sistem Akuntansi Keuangan Daerah (SAKD). Kata Kunci: Kejelasan tujuan; efektivitas sistem akuntansi keuangan daerah; dukungan manajemen puncak; pelatihan

scholarly journals PENGARUH PEMAHAMAN AKUNTANSI DAN PENERAPAN SISTEM INFORMASI KEUANGAN DAERAH TERHADAP KUALITAS LAPORAN KEUANGAN PEMERINTAH DAERAH DENGAN KOMPETENSI SUMBER DAYA MANUSIA SEBAGAI VARIABEL MODERASI (STUDI EMPIRIS PADA PEMERINTAH KOTA PEKANBARU)

2020 ◽  
Vol 1 (1) ◽  
pp. 64-88
Author(s):  
Elfita Yeni ◽  
Mimelientesa Irman ◽  
Fadrul Fadrul
Keyword(s):  
Human Resource ◽  
Financial Reporting ◽  
Sampling Method ◽  
Financial Accounting ◽  
Financial Statement ◽  
Accounting System ◽  
Accounting Systems ◽  
State And Local Government ◽  
State And Local

This study aims to determine the influence of Accounting Understanding an Application, financial accounting systems human resource competency on the quality of regional financial statement. Based on PP No. 71 year 2010, state and local government financial statement quality have to meet the qualitative characteristic. Factors examined include Acounting understanding, human resource competency financial accounting system and the quality of regional financial statement. The used sampling method is purposive sampling sampling. Data collection is done by giving as many as 90 copies, copies of the questionnaire,which was distributed to respondents who are staff  financial in Pekanbaru City. The Data obtained are then analyzed using SPSS 21.00. Based on the analysis results, obtained that applicatin of Accounting and the financial accounting systems have a positive and significant effect to the quality of financial reporting information in OPD Pekanbaru City and human resource competency can be used as a moderating variable.

Pengaruh Pemahaman Sistem Akuntansi Keuangan Daerah, Kapasitas Sumber Daya Manusia dan Pemanfaatan Teknologi Informasi terhadap Kualitas Informasi Laporan Keuangan Pemerintah Daerah (Studi Kasus pada Pemerintah Daerah Kota Yogyakarta)

2020 ◽  
Vol 15 (1) ◽  
Author(s):  
Teguh Erawati
Keyword(s):  
Information Technology ◽  
Local Government ◽  
Human Resource ◽  
Financial Accounting ◽  
System Capacity ◽  
Accounting System ◽  
Financial Report ◽  
Purposive Sampling ◽  
Utility Of Information

The research is to examine the influence of the understanding of local financial accounting system, capacity of human resource and the utility of information tecnology toward the quality of financial report information of yogyakarta government.The used data for the research is primer data. It is the result from questionnaires spreading. The respondence of this research is manager of financial report of yogyakarta local government. The questionnair is spread to 90 respondents, meanwhile that can be proccesd are 63 questionnaires. The method of sample taking is using purposive sampling. Analytic technique of data in this research is using double linier regretion technique.The result of regretion test shows that the local government financial accounting system understanding and the capacity of human resource are not influenced significantly to the quality of local government financial report information, meanwhile the utility of technology is influenced positively to the quality of local government financial report information.keyword: the understanding of local financial accounting system, capacity of human resource, the utility of information technology and quality of local government financial report information.

The Adoption of Financial Accounting Standards for Small Medium Enterprises by Muslim Entrepreneurs

2020 ◽  
Vol 27 (2) ◽  
pp. 54
Author(s):  
Muslichah Muslichah ◽  
Sunarto Sunarto ◽  
Anang Amir Kusnanto ◽  
Sri Indrawati ◽  
Hariyanto Hariyanto
Keyword(s):  
Financial Reporting ◽  
Quantitative Data ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Unexpected Finding ◽  
Financial Reports ◽  
Small Medium Enterprises ◽  
Medium Enterprises ◽  
Chartered Accountants ◽  
Structured Questionnaire

This study aims to discuss the adoption of financial reporting and accounting standards for small-medium enterprises (SMEs) by Muslim entrepreneurs. A structured questionnaire was used to collect quantitative data from the SME owners. 214 Muslim owners of SME businesses participated in the survey. The results show that only a few Muslim entrepreneurs prepared financial reports regularly. The main reason for preparing the statement is for calculating tax, borrowing money, and decision making. An unexpected finding from this study is that most of the Muslim owners are unaware of Standard for SMEs. Users of SME financial reports include tax authority, banks, and owners, or shareholders. This study enriches the financial reporting studies by examining the accounting standards for SMEs in a Muslim dominated country. The findings of this study also have implications for the Institute of Indonesia chartered accountants (IICA) as standard setter. IICA must routinely disseminate these standards to SMEs and also assist them in preparing financial reports

Selecting Railway Investments in 1890s America

2017 ◽  
Vol 44 (1) ◽  
pp. 77-93
Author(s):  
Joel E. Thompson
Keyword(s):  
Financial Reporting ◽  
Accounting Information ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Investment Strategies ◽  
Financial Accounting Standards Board ◽  
Accounting Data ◽  
Rational Decisions

ABSTRACT The purpose of financial reporting is to provide information to investors and creditors to help them make rational decisions (Financial Accounting Standards Board [FASB] 2010). Tracing the development of investors' methods should help with understanding the role of financial accounting. This study examines investment practices involving railways in 1890s America. As such, it furthers our knowledge about the development of investment methods and their necessary information. Moreover, it shows that as investment methods grew in sophistication, there was an enhanced demand for greater comparability in accounting data to make meaningful analyses. Competing investment strategies, largely devoid of accounting information, are also discussed.

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