JOSHUA TITO T.

TAGAYUNA

BSA41KB1

REFLECTION PAPER: REVENUE CYCLE

Transactions involving and relating to revenues may prove to be one of the most vital activities in
every organization. Entities either big or small; either new or old; either profit or non-profit; view revenues
as a significant source of resources. It is important therefore to understand how business transactions give
rise to revenue. Another learning goal of paramount importance is on how to systematically keep track of
the revenue cycle using an accounting information system.
During the reporting, the reporters conveyed knowledge about the functional areas and the flow of
transaction information triggering key tasks; the documents, journals, and accounts that support audit trails,
decision making, and financial reporting; and the risks in the revenue cycle and the controls practiced in
order to reduce them. I learned that the revenue cycle, being a subsystem to the transaction processing
system, is still divisible into six subsystems namely the sales order, credit or customer service, shipping,
billing, accounts receivable, and cash receipts or collection. We studied how each transaction affected
pertinent accounts and how it should be processed by the AIS. Next, we had a peek through automated
data processing techniques. Then, we examined reengineered systems. This involves revamping traditional
business approaches to be suited with the needs of the organization and lead to the attainment of
competitive advantage. Consequently, the integrity of the computer programs becomes a great concern to
the organization since the control measures might be breached. Similarly, organization management must
control access to digital accounting files and ensure that adequate backup procedures are in place. Lastly,
the reporters dealt with the subject of PC accounting systems. The modular design system tailored or
customized to its specific needs. This resulted in the growth of end-user computing and infused to business
organizations flexibility, efficiency, and effectiveness in carrying out transactions. As a future accountant,
there are some risk exposures that I must be cognizant of. They are (1) the lack of properly segregated
duties; (2) computer operating systems that data to unauthorized access; and (3) computer failures and
inadequate backup procedures dependent on human intervention. These and more threaten the security of
accounting records and endanger user confidence over the information provided by it.
In conclusion, inasmuch as a revenue cycle is of great magnitude in an entity, is the need to
understand the concepts and procedures that underlie such systems. It occurred to me that it is important
to strike the balance between information needs and the internal controls that maintain the usefulness of
such information; and if possible, to meet the expectations of the users of an AIS without compromising the
trustworthiness of the processes and the system used to collect, process, and analyze them.