UNIVERSITY OF MINDANAO

College of Accounting Education

Program: BSA, BSIA, BSMA, BSAIS

Physically Distanced but Academically Engaged

Self-Instructional Manual (SIM) for

Self-Directed Learning (SDL)

Course/Subject: ACC 214/ L- IT Application Tools in Business

Name of Teacher: _________________

THIS SIM/SDL MANUAL IS A DRAFT VERSION ONLY; NOT FOR

REPRODUCTION AND DISTRIBUTION OUTSIDE OF ITS INTENDED
USE. THIS IS INTENDED ONLY FOR THE USE OF THE STUDENTS
WHO ARE OFFICIALLY ENROLLED IN THE COURSE/SUBJECT.
EXPECT REVISIONS OF THE MANUAL.

THIS IS NOT FOR COMMERCIAL USE.

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 TABLE OF CONTENTS
Page No.

Course Outline 3
Course Outline Policy 3
Course Information 7

Big Picture: Unit Learning Outcomes 8

Big Picture in Focus: Unit Learning Outcomes a, b, c 8
Metalanguage 8
Essential Knowledge 9
Self-Help 14
Let’s Check 15
Let’s Analyze 16
In A Nutshell 19
QA List 20
Keywords Index 20

Big Picture in Focus: Unit Learning Outcome d & e 21

Metalanguage 21
Essential Knowledge 21
Self-Help 25
Let’s Check 25
Let’s Analyze 25
In A Nutshell 26
QA List 27
Keywords Index 27

Course Schedule 27
Online Code of Conduct 28

2
Course Outline: ACC 214/ L- IT Application Tools in Business
Course Coordinator:
Email:
Student Consultation:
Mobile:
Phone:
Effectivity Date:
Mode of Delivery:
Time Frame:
Student Workload:
Requisites:
Credit:
Attendance Requirements:
Course Outline Policy
Areas of Concern
Contact and Non-contact Hours
Assessment Task Submission
Gemima A. Guillen
gemimaguillen@umindanao.edu.ph
By appointment
09086073185
(082) 235 4636
June 2020
Blended (On-Line with face to face or virtual sessions)
54 Hours
Expected Self-Directed Learning
None
3
A minimum of 95% attendance is required at all
scheduled Virtual or face to face sessions.
Details
This 3-unit course self-instructional manual is designed
for blended learning mode of instructional delivery with
scheduled face to face or virtual sessions. The
expected number of hours will be 54 including the face
to face or virtual sessions. The face to face sessions
shall include the summative assessment tasks (exams)
since this course is crucial in the licensure examination
for Certified Public Accountants.
Submission of assessment tasks shall be on 3rd, 5th, 7th
and 9th week of the term. The assessment paper shall
be attached with a cover page indicating the title of the
assessment task (if the task is performance), the
name of the course coordinator, date of submission and
name of the student. The document should be emailed
to the course coordinator. It is also expected that you
already paid your tuition and other fees before the
submission of the assessment task.
If the assessment task is done in real time through the
features in the Blackboard Learning Management
System, the schedule shall be arranged ahead of time
by the course coordinator.
3
 Since this course is included in the CPALE, you will be
required to take the Multiple- Choice Question exam
inside the University. This should
be scheduled ahead of time by your course coordinator.
This is non-negotiable for all licensure-based programs.
Turnitin Submission To ensure honesty and authenticity, all assessment
(if necessary) tasks are required to be submitted through Turnitin
with a maximum similarity index of 30% allowed. This
means that if your paper goes beyond 30%, the
students will either opt to redo her/his paper or explain
in writing addressed to the course coordinator the
reasons for the similarity. In addition, if the paper has
reached more than 30% similarity index, the student
may be called for a disciplinary action in accordance
with the University’s OPM on Intellectual and Academic
Honesty.

Please note that academic dishonesty such as cheating

and commissioning other students or people to
complete the task for you have severe punishments
(reprimand, warning, expulsion).
Penalties for Late The score for an assessment item submitted after the
Assignments/Assessments designated time on the due date, without an approved
extension of time, will be reduced by 5% of the possible
maximum score for that assessment item for each day
or part day that the assessment item is late.

However, if the late submission of assessment paper

has a valid reason, a letter of explanation should be
submitted and approved by the course coordinator. If
necessary, you will also be required to present/attach
evidences.
Return of Assignments/ Assessment tasks will be returned to you two (2) weeks
Assessments after the submission. This will be returned by email or
via Blackboard portal.

For group assessment tasks, the course coordinator will

require some or few of the students for online or virtual
sessions to ask clarificatory questions to validate the
originality of the assessment task submitted and to
ensure that all the group members are involved.
Assignment Resubmission You should request in writing addressed to the course
coordinator his/her intention to resubmit an assessment
task. The resubmission is premised on the student’s
failure to comply with the similarity index and other
reasonable grounds such as academic literacy

4

Re-marking of Assessment
Papers and Appeal
Grading System
Preferred Referencing Style
Student Communication
standards or other reasonable circumstances e.g.
illness, accidents financial constraints.
You should request in writing addressed to the program
coordinator your intention to appeal or contest the score
given to an assessment task. The letter should explicitly
explain the reasons/points to contest the grade. The
program coordinator shall communicate with the
students on the approval and disapproval of the
request.
If disapproved by the course coordinator, you can
elevate your case to the program head or the dean with
the original letter of request. The final decision will
come from the dean of the college.
All culled from BlackBoard sessions and traditional
contact
Course discussions/exercises – 30%
1st formative assessment – 10%
2nd formative assessment – 10%
3rd formative assessment – 10%
All culled from on-campus/onsite sessions (TBA):
Final exam – 40%
Submission of the final grades shall follow the usual
University system and procedures.
Depends on the discipline; if uncertain or inadequate,
use the general practice of the APA 6th Edition.
You are required to create a umindanao email account
which is a requirement to access the BlackBoard
portal. Then, the course coordinator shall enroll the
students to have access to the materials and resources
of the course. All communication formats: chat,
submission of assessment tasks, requests etc. shall be
through the portal and other university recognized
platforms.
You can also meet the course coordinator in person
through the scheduled face to face sessions to raise
your issues and concerns.
For students who have not created their student email,
please contact the course coordinator or program head.
5
Contact Details of the Dean
Contact Details of the Program
Head
Students with Special Needs
Online Tutorial Registration
Library and Information Center
(LIC) Resource
Well-Being Welfare Support Help
Desk
Esterlina B. Gevera
Email: esterlina_gevera@umindanao.edu.ph
Phone: (082) 3050645 local 137
Lord Eddie I. Aguilar
Email: aguilar_lordeddie@umindanao.edu.ph
Phone: 082) 3050645 local 137
Mary Grace S. Sombilon
(BSA, BSMA)
Email: sombilon_marygrace@umindanao.edu.ph
Phone: 082) 3050645 local 137
Devzon U. Porras
(BSIA, BSAIS)
Email: dporras@umindanao.edu.ph
Phone: 082) 3050645 local 137
Students with special needs shall communicate with the
course coordinator about the nature of his or her
special needs. Depending on the nature of the need,
the course coordinator with the approval of the program
coordinator may provide alternative assessment tasks
or extension of the deadline of submission of
assessment tasks. However, the alternative
assessment tasks should still be in the service of
achieving the desired course learning outcomes.
Through LMS or Personal Message/ Chat
Brigida E. Bacani
Email: library@umindanao.edu.ph
Phone: 09513766681
for inquiries, you can email at
umlic.eresources@gmail.com ,
raphael_digal@umindanao.edu.ph or
chat with us here http://library.umindanao.edu.ph/
Facebook page: https://www.facebook.com/UM-
Learning-and-Information-Center-Davao-City-
962331877193048/
Ronadora E. Deala
Email: Ronadora_deala@umindanao.edu.ph
Phone: 09212122846
GSTC Facilitator
Zerdszen P. Rañises
Emai: gstcmain@umindanao.edu.ph
Phone: 09058924090
GSTC Facebook Page:
6
 https://facebook.com/UM-GSTC-Main-CAE-
111901303784349/?modal=admin_todo_tour

Course Information – see/download course syllabus in the Black Board LMS

CC’s Voice: Hello, future accountants! Welcome to our ACC 214/L course – IT
Application Tools in Business. This course is created to introduce to you the
information technology usage in business transaction and System Design and
Development. Although this course is rather technical, comprehensive lesson
guides and evaluative assessments are to be provided for your ease and
convenience. In this course you will be acquainted with real-life application of
IT in our world- the accounting world. This manual covers the lecture part of
the course while the laboratory part will be on a separate manual.

CO As said earlier, this course is highly technical. At the end, you are expected
to demonstrate your understanding on the use of technology in accounting
information system. A thorough discussion of Data Processing Cycle (DPC),
Enterprise Resource Planning (ERP) Systems, Relational Database, and
Electronic Business Value will definitely allow you to appreciate the
accountant’s vital role in the business. Also, an Introduction to Systems
Development and Systems Analysis will also be made to help you understand
and appreciate the creation of a system (for accountants, i.e. Accounting
Information System)

Let us begin!

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Big Picture

Week 1-3: Unit Learning Outcomes (ULO): At the end of the unit, you are expected to

a. Describe the Data Processing Cycle (DPC) and Identify the roles of each part of
DPC in organizing business activities and providing information to users.
b. Distinguish and Describe the documents and procedures used to collect and
process transaction data
c. Enumerate and Explain the ways information is stored in computer-based
information
d. Discuss the types of information that an Accounting Information System can
provide
e. Discuss how organizations use Enterprise Resource Planning (ERP) systems to
process transactions and provide information

Big Picture in Focus:

ULOa. Describe the Data Processing Cycle (DPC) and Identify the
roles of each part of DPC in organizing business
activities and providing information to users.
ULOb. Distinguish and Describe the documents and procedures
used to collect and process transaction data
ULOc. Enumerate and Explain the ways information is stored in
computer-based information

Metalanguage

In this section, refer to the following terms below, for us to have a common
understanding of what these terms mean in this parlance.

1. Data Processing Cycle (DPC)

- This refers to a set of operations that is responsible for the transformation of raw
data into useful information. The goal of this process is to make use of the
information to aid organizations (in accounting, i.e. businesses) in the decision-
making process.

2. Source documents
- Source documents are the original documents where details of a transaction can
be found. A business transaction like purchase of goods entails several source
documents such as purchase requisition form, purchase order, etc., which will all
be discussed in the next part. Normally, source documents are numbered in a

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 unique manner (e.g. sequential) so they can be easily traced when they enter the
Accounting Information System (AIS).

3. Turnaround documents
- A turnaround document is a form that is sent to a third-party who will fill out the
document and return the same to the issuer. Since the form was returned, the
information on the form operates as the source for the data entry back into the
system.

Essential Knowledge

To perform the aforesaid big picture (unit learning outcomes) for the first three (3)
weeks of the course, you need to fully understand the following essential knowledge that
will be laid down in the succeeding pages. Please note that you are not limited to
exclusively refer to these resources. Thus, you are expected to utilize other books,
research articles and other resources that are available in the university’s library e.g.
ebrary, search.proquest.com etc.

Data Processing Cycle

As accountants, Data Processing Cycle (DPC) plays a very significant role. DPC
involves operations used to transform data into useful information. This process allows
the transformation of raw data into useful information that could help the business. An
emphasis must be given in this topic since accountants usually deal with this in the day-
to-day activities.

As CPAs, the attest function is to ‘audit’. Before starting the audit, one of the
preliminary procedures is to understand the business. As we are in the modern era, most
of the business transactions happen in a computing system/tool (i.e. computers). Upon
understanding the business processes, you will encounter several flowcharts showing the
business practices in transforming input to output in a nutshell. It is therefore important
as accountants, to know this topic.

Data Processing Cycle consists of four steps as shown below:

Data Storage

Information
Data input Data Processing Output

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1. Data Input

This part of the DPC has three steps.

a. The first step is to capture the transaction data and enter them into the
system. The data capture is usually triggered by a business activity. Data must
be collected about three facets of each business activity:
i. Each activity of interest
ii. The resource (s) affected by each activity
iii. The people who participate in each activity

These data inputs are usually evidenced by paper source documents. Eventually, the
data are transferred into the computer. The following are the common business
activities and source documents:

Business Activity Source Document

Revenue Cycle:
Take customer order Sales Order
Deliver or ship order Delivery Ticket or Bill of Lading
Receive cash Remittance Advice or list
Deposit cash receipts Deposit Slip
Adjust customer accounts Credit Memo
Expenditure Cycle:
Request Items Purchase Requisition
Order Items Purchase Order
Receive Items Receiving Report
Pay for items Check or electronic funds transfer
Human Resources Cycle:
Collect employee withholding data W-4 Form
Record time worked by employees Time cards
Record time spent on specific jobs Job Time tickets or time sheets

b. The second step in processing input is ascertaining the accuracy and

completeness of the data captured by the system. Ways to this is to utilize
source document automation or well-designed turnaround documents and data
entry screens.

i. Source data automation- a device that capture transaction data in machine-

readable form at the time and place of their origin. Examples include ATMs
by banks, point-of-sale (POS) scanners used in retails stores, and barcode
scanners n warehouses.

ii. Turnaround documents- company output sent to an external party, who

often adds data to the document, and then returned to the company as an

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 input document. They are in machine-readable form to facilitate their
subsequent processing as input records. An example is a utility bill that is
sent to the customer, returned with the customer’s payment, and read by a
special scanning device when it is returned.

In this part, try to get your utility bill (water or electricity) to perfectly visualize
what turnaround document is.

iii. To reduce risk of capturing incomplete data, users can also purchase
prenumbered source documents or by having the system automatically
assign a sequential number to each new transaction. Upon implementing
this, any missing document may easily be traced by looking at the number
series of the source documents and identifying those that cannot be found.

c. Third Step in processing input is to make sure company policies are followed,
such as approving or verifying a transaction. An example is programming the
system to check customer’s credit limit and payment history, as well as
inventory status, before confirming customer sale.

2. Data Storage

Company’s data are one of its most important resources. Accountants need to
understand how these data are stored and organized in the Accounting
Information System (AIS) and how they can be accessed. Data storage is
analogical to how books are organized into chapters, sections, paragraphs, and
sentences. This part of DPC explains basic data storage concepts and
definitions.

b. Journals- contains journal entries that show the accounts and amounts to be
debited and credited.
i. General journal- used to record infrequent or nonroutine transactions
ii. Specialized journal- records large number of repetitive transactions such as
sales, cash receipts, and cash disbursements

Periodically, the total of the journal entries of each account is posted to the
ledger.

c. Ledgers- where cumulative accounting information is stored

i. General ledger- contains summary-level data for every asset, liability,
equity revenue, and expense account
ii. Subsidiary ledger- contains detailed data for any general ledger account
with many individual subaccounts
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 The general ledger account corresponding to a subsidiary ledger account is called
a control account. The sum of all subsidiary ledger account should equal the
amount in the corresponding general ledger control account. Any discrepancy
between them indicates that a recording error has occurred.

d. Coding Techniques- Data in ledgers is organized logically using coding

techniques, the systematic assignment of numbers or letters to items to classify
and organize them.
i. Sequence Codes- items are numbered consecutively to account for all
items
ii. Block Codes- blocks of numbers are reserved for specific categories of data
iii. Group Codes- two or more subgroups of digits are used to code items They
are often used in conjunction with block codes
Digit Position Meaning

1-3 Product type

4 Color

6-7 Size

iv. Mnemonic codes- letters and numbers are interspersed to identify an item,
usually derived from the description of the item and is usually easy to
memorize
An example of coding is the chart of accounts, which is a list of the numbers
assigned to each general ledger account.
e. Audit trail- a traceable path of a transaction through a data processing system from
point of origin to final output, or backwards. It is used to check the accuracy and
validity of ledger postings.
f. Computer-based storage concepts

For illustration purposes, consider the figure below:

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 i. Entity
- Person, place, or thing
- Something an organization wishes to store data about
ii. Attributes
- Facts about the entity
iii. Fields
- Where attributes are stored
iv. Records
- Group of related attributes about an entity
v. File
- Group of related Records
- File types:
i. Transaction file- Contains records of a business from a
specific period of time
ii. Masterfile- Permanent records, updated by transaction
with the transaction file
iii. Database- Set of interrelated files

Transaction
File
Master File
(updated)

Master File
(before update)

3. Data Processing- once data is entered into the system, they must be processed to
keep the database current. The four different types of data processing activities are
as follows:
i. Creating new data records
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 ii. Reading, retrieving, or viewing existing data
iii. Updating previously stored data
2. Batch Processing- cheaper and more efficient, but data are current and
accurate only after processing. Only used for payroll, that do not need
frequent updating and that naturally occur or are processed at fixed time
periods.
3. Online Real-time processing- ensures that stored information is always
current, thereby increasing its decision-making usefulness Data input
errors can be corrected in real time or refused.
4. Online batch processing- a combination of the two approaches, where
transaction data are entered and edited as they occur and stored for
later processing
iv. Deleting data

4. Information Output
a. Soft copy- output displayed on a screen
b. Hard copy- output is printed on paper

Information is usually presented in the following forms:

i. Documents- records of transaction or other company data
ii. Reports- used by employees to control operational activities and by
managers to make decisions and to formulate business strategies.
iii. Database query- used to provide information needed to deal with problems
and questions that need rapid action or answers

Self-Help: You can also refer to the sources below to help you further
understand the lesson:

Romney, M. & Steinbart, P.J. (2015). Accounting Information System 13th Ed. England:
Pearson Education Limited

Lech, P. (2013). Enterprise system implementation from the functional consultants'

perspective. Electronic Journal of Information Systems Evaluation, 16(4), 291-301.
Retrieved from http://search.proquest.com/docview/1521023493?accountid=31259

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Let’s Check
Activity 1. Now that you have been acquainted with the Data Processing Cycle, let us try
to check your understanding of the terms linked with the said topic.

1. Which of the following is the first step in Data Processing Cycle?

a. Data Output
b. Data Storage
c. Data Collection
d. Data Input

2. All of the information (name, wage rate, address, etc.) about a particular employee is
stored in the same____.
a. File
b. Record
c. Attribute
d. Field

3. Which of the following would contain the total value of all the fixed assets owned by
an entity?
a. Delivery receipt
b. General Ledger
c. General Journal
d. Forecast Report

4. Which of the following is most likely to be a general ledger control account?

a. Accounts payable
b. Retained earnings
c. Prepaid expenses
d. Finance cost

5. Which of the following is most likely to be used in the revenue cycle?

a. Remittance Advice
b. Purchase order
c. Daily Time Record
d. Job Ticket

6. Which of the following is most likely a specialized journal?

a. Prepaid Insurance Journal
b. Cash Receipts Journal
c. Fixed Assets Journal
d. Prepaid Rent Journal

7. It is a type of file that contains records of individual business transactions that occur
15
 during a specific time.
a. Transaction file
b. Database
c. Masterfile
d. Field

8. Which of the following is not one of the data processing activities?

a. Creating
b. Reading
c. Overriding
d. Deleting

9. _____ are used by employees to control operational activities and by managers to

make decisions and to make business strategies.
a. Data
b. Report
c. Information
d. Query

10. Recording and Processing information about a transaction at the time it takes place is
referred to which of the following?
a. Batch processing
b. Online, real-time processing
c. Captured transaction processing
d. Chart of accounts processing

Let’s Analyze
Activity 1. Getting acquainted with the essential terms is not enough, what also matters
is you should also be able to gather your thoughts and understanding of the lesson and
answer the following:

1. “Garbage in, garbage out” is quite a common phrase. Applying this to the Data
Processing Cycle, explain the phrase and state ways on how to avoid such from
happening.

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2. The Data Processing Cycle (DPC) figure is a basic input-to-output model that can be
found anywhere. Relating this to the human body, cite examples that are analogical to
the DPC.

3. Traditionally, accountants' role is limited on producing financial statements. However,

over the years, accountants have also helped in design and production of managerial
reports. Some agree on this involvement while others argue against it. Give your thoughts
on this matter.

Activity 2. This activity will allow you have an in-depth application of the coding schemes
and techniques. It is important that you understand this part since the work of an
accountant starts in understanding the chart of accounts (i.e. an application of coding
technique). This activity also lets you analyze the audit trail of a given transaction.

17
 1. Jose is are an owner of a retail shop that sells cellphone accessories (phone cases,
stickers, protective glass and screen, etc.). As his business grows, he finds it hard to
trace the items/inventory. He is thinking of assigning codes to the products to organize
them. Suggest a coding technique that could help him and explain why he should use
such. (Note: There is no right or wrong answer on this one. Kindly explain your answer
and provide an example if possible)

2. Chart of accounts must be customized according to the entity type. As an activity, obtain
a copy of chart of accounts of the following organizations:
a. School/university
b. Bank
c. Government unit
d. Manufacturing Company

Observe the accounts and how they are presented for each entity type. Explain how the
chart of accounts differ from each other

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3. State the source documents used for the transactions from start to finish. In detail,
describe the audit trail of the following transactions:
a. Inventory Purchases
b. Sales of Inventory
c. Employee Payroll

In a Nutshell
Activity 1. Data Processing Cycle is indeed very important to accountants. Indicate below 3 key
takeaways for this lesson. Relate each point to the role of an accountant.

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Q&A List
Do you have any questions for clarification?

Questions/Issues Answers

1. 1.
2. 2.
3. 3.
4. 4.
5. 5.

Keywords Index
This section lists down the keywords that help you for recall the discussions.

Data processing cycle Mnemonic ode Master file

Source documents Chart of account Transaction file
Turnaround documents General journal Database
Source data automation Specialized journal Batch processing
General ledger Audit trail Online, real-time processing
Subsidiary ledger Entity Document
Control account Attribute Report
Coding Field Query
Sequence Code Record Group Code

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 Big Picture in Focus:
ULOd. Discuss the types of information that an Accounting
Information System can provide
ULOe. Discuss how organizations use Enterprise Resource
Planning (ERP) systems to process transactions and
provide information

Metalanguage
1. Enterprise Resource Planning
- Enterprise resource planning (ERP) is a process used by companies to manage
and integrate the important parts of their businesses. Many ERP software
applications are important to companies because they help them implement
resource planning by integrating all of the processes needed to run their
companies with a single system.

2. Accounting Information System

- An accounting information system is one that accumulates, stores, and processes
financial and accounting information. The system generates reports that are used
to make decisions regarding how an organization is to be run.

Essential Knowledge

For small businesses, an accounting software such as Quickbooks, is enough to

aid in running the business. For large businesses, however, an Accounting Information
System (AIS) may not suffice to capture relevant information for the managers and
external party to assess the company.

For a sales transaction, in the AIS, a debit to cash or accounts receivable and a
credit to sales is created. Other nonfinancial information such as time of sale, type of
sale, etc., are not captured by the AIS. This creates the need for another system that
could capture, store, and report information not contained in the AIS. Most often than
not, a data may be stored in more than one system, thus creates redundancy as a whole.
Making things worse, a discrepancy occurs when the data is updated in one system,
with the update omitted in the other systems which store the same data.

The apparent challenge gave rise to the creation of what we call Enterprise
Resource Planning (ERP) systems. ERP integrates all aspects of a company’s
operations, encompassing AIS. Needless to say, due to the overwhelming volume of
information, medium and large sized enterprises utilize ERP more than small
businesses. To visualize ERP, refer to the figure below:

21
 Revenue Cycle Expenditure Cycle

Sell goods and Buy goods and

Receive Payment services Make Payment
services

Integrated ERP Database

Production Cycle HR/Payroll Cycle

Use Employee
Time

Issue Raw Issue Raw Get Employee

Materials Materials Pay Employees
Time

Use Machines

General Ledger and

Reporting System

Produce Reports and

Financial Statements

22
The following points are to be noted:

 ERP uses a centralized database to share information across business

processes and coordinate activities.
 ERP system utilize module, with each module using best business practices to
automate a standard business process. This allows businesses to add or delete
modules as needed. The following are some of the modules used:

Financial (general ledger and reporting General ledger, accounts receivable

system)
Human resources and payroll
Order to cash (Revenue Cycle)
Purchase to pay (Disbursement cycle)
Manufacturing (Production Cycle)
Project Management
Customer relationship management
System tools
accounts payable, fixed assets, budgeting,
cash management, and preparation of
managerial reports and financial
statements
Human resources, payroll, employee
benefits, training, time and attendance,
benefits, and government reporting
Sales order entry, shipping, inventory,
cash receipts, commission calculation
Purchasing, receipt and inspection of
inventory, inventory and warehouse
management, and cash disbursement
Engineering, production scheduling, bill of
materials, work in process workflow
management, quality control, cost
management, and manufacturing
processes and projects
Costing, billing, time and expense,
performance units, activity management
Sales and marketing, commission,
service, customer contact, and call center
support
Tools for establishing Masterfile data,
specifying flow of information, access
controls, and so on

When a customer orders a large volume of product which is beyond the

company’s current production capacity, this triggers the need for additional raw material,
hence the purchase to pay module is utilized. As needed, this may also trigger the need
for additional workforce to complete the production process on time. This may create
the need for an overtime or additional worker. With this, there is coordination of activities
and business processes. This is important since one business activity affects other
processes all throughout the organization. It is therefore important to create a sound
and efficient ERP systems.

The following are the advantages in using ERP systems:

23
 • It provides an integrated, enterprise-wide single view of the organization’s data
and financial situation.
• Data input is captured or keyed once, rather than multiple times, as it is entered
into different systems. Downloading data from one system to another is no longer
needed.
• Management gains greater visibility hence increased monitoring
• The organization gains better access control
• Procedures and reports are standardized across business units
• Customer service improves because employees can quickly access orders,
available inventory, shipping information, and past customer transaction details
• Manufacturing plants receive new orders in real time, and the automation of
manufacturing processes leads to increased productivity

ERP systems also have significant disadvantages as follows:

• ERP systems can be very costly

• The development of ERP takes up a long amount of time since the business
processes have to be evaluated on how to integrate them as efficiently and
effectively as possible. The complexity of integrating different business activities
and systems adds to this disadvantage
• Since ERP packages are available to save development time and cost, the
business processes have to adapt to the changes in order to coincide with the
standardized business processes provided by the ERP package
• Transitioning to ERP systems might result to employee resistance. Teaching
employees another way to do a job they have been doing for a long time is quite
a challenge. Moreover, employees have to be trained in using the new system.

If all these impediments are to be mitigated, if not eliminated, therefore obtaining

the advantages of ERP systems, most likely than not, the organization may reach its
goal in implementing ERP. The success also requires conscious effort, commitment,
and support of Top management.

Apart from the development of the ERP systems, it is also worthy to note the
importance of a sound internal controls. As it is an all-encompassing system, the data
stored in it must be properly validated so as not to create errors throughout the system.
As part of controls, access controls must also be implemented. It is also important to
separate responsibility for custody of assets, authorization of activities that affect those
assets, and recording of information about activities and the status of organizational
assets.

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 Self-Help: You can also refer to the sources below to help you further
understand the lesson:

Romney, M. & Steinbart, P.J. (2015). Accounting Information System 13th Ed. England:
Pearson Education Limited

Lech, P. (2013). Enterprise system implementation from the functional consultants'

perspective. Electronic Journal of Information Systems Evaluation, 16(4), 291-301.
Retrieved from http://search.proquest.com/docview/1521023493?accountid=31259

Let’s Check
Activity 1. You may have first heard about Enterprise Resource Planning in this lesson.
Now that you’ve been introduced to the topic, let us check your understanding. For the
following statements, indicate whether TRUE or FALSE.

1. An Accounting Information System (AIS) captures all data about a particular

transaction, including nonfinancial information.
2. There is minimal customization in using Enterprise Resource Planning (ERP).
3. The use of ERP ensures success of business.
4. Quickbooks and Xero are common examples of ERP software.
5. Quickbooks and Xero are common examples of bookkeeping software.
6. In using ERP, internal controls are no longer important since the ERP will
compensate for the lack of internal controls.
7. One of the advantages of ERP is that downloading data from one system to another
is no longer needed.
8. ERP is simple to apply to any existing business.
9. Top management’s involvement in the implementation of ERP is no longer needed
since ERP affects only those from middle management and below.
10. By using ERP, the organization is given a better access control, standardization of
procedures and reports, and improved monitoring capabilities of those in
management.

Let’s Analyze

Activity 1. Learning about the theoretical definition of ERP is the first step in
understanding this topic. To bolster your learning, follow this activity to immerse you more
in the topic. The instruction below is adapted from the main reference of this lesson. The
book will be mentioned at the end of this ULO.

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As mentioned earlier, SAP and Oracle are two of the most popular ERP software. Visit
the websites for these two software and explore their content. Search for videos and the
different services that they offer.
a. SAP Website: https://www.sap.com/products.html
b. Oracle Website: https://www.oracle.com/index.html

At the end of the activity, write a narrative, with minimum words of 100, of the things you
discovered in their website.

In a Nutshell
Activity 1. As a conclusion to this topic, compare and contrast Accounting Information System
(AIS) and Enterprise Resource Planning (ERP).

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Q&A List
Do you have any questions for clarification?

Questions/Issues Answers

6. 6.
7. 7.
8. 8.
9. 9.
10. 10.

Keywords Index
This section lists down the keywords that help you for recall the discussions.

Enterprise Resource Accounting Information Master file

Planning System

Course Schedule
This section calendars all the activities and exercises, including readings and lectures, as well
as time for making assignments and doing other requirements.

Activity Date Where to Submit

Orientation May 25, 2020 BlackBoard LMS
Let’s Check May 28, 2020 BlackBoard LMS
Let’s Analyze – June 1, 2020 BlackBoard LMS
Activity 1
Let’s Analyze – June 3, 2020 BlackBoard LMS
Activity 2
In a Nutshell June 4, 2020 BlackBoard LMS
Let’s Check June 5, 2020 BlackBoard LMS
Let’s Analyze – June 9, 2020 BlackBoard LMS
Activity 1
In a Nutshell June 10, 2020 BlackBoard LMS
1st Formative June 11, 2020 BlackBoard LMS
Assessment

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