INTEGRATIVE CASE S&S accounting informationsystem
The grand opening of S&S is two weeks away. Scott Parry andSusan Gonzalez are working long hours to make the finalarrangements for the store opening. Most of the employees havealready been hired; training is scheduled for next week.
Susan has ordered inventory for the first month. The store isbeing remodeled and will have a bright, cheery decor. All seems tobe in orderâall, that is, except the accounting records.
Like many entrepreneurs, Scott and Susan have not given as muchthought to their accounting records as they have to other parts oftheir business. Recognizing they need qualified accounting help,they hired a full-time accountant, Ashton Fleming. Scott and Susanthink Ashton is perfect for the job because of his three years ofexperience with a national CPA (Certified Public Accountants) firm.Ashton is looking forward to working for S&S because he hasalways wanted to be involved in building a company from the groundup.
During Ashtonâs first day on the job, Susan gives him theinvoices for the inventory she purchased and a folder with theirbank loan documentation, with the first payment due after the grandopening. She also hands him a folder containing information onrental payments, utilities, and other expenses. Susan tells Ashtonthat she and Scott know little about accounting and he will run theaccounting end of S&S. She adds that the only thing they havedone so far is to open a checking account for S&S and that theyhave kept the check register updated to monitor their cash flow.Scott explains that the sales staff is paid a fixed salary andcommissions and that all other employees are paid hourly rates.Employees are paid every two weeks, with their first paychecks duenext week. Ashton asks Scott what accounting software the companyis using. Scott replies that he and Susan have not had time totackle that aspect yet. Scott and Susan looked at some of thepopular packages but quickly realized that they did not know enoughabout accounting to make an intelligent choice. Scott then tellsAshton that his first task should be to purchase whateveraccounting software he thinks will be best for S&S.
After Scott leaves, Ashton feels both excited and a littlenervous about his responsibility for creating an accountinginformation system (AIS) for S&S. Although Ashton has auditedmany companies, he has never organized a companyâs books and isunsure how to go about it. A million questions run through hishead. Here are just a few of them:
1) How should I organize the accounting records so thatfinancial statements can be easily produced?
2) How am I going to collect and process data about all ofS&Sâs transactions?
3) How do I organize all the data that will be collected?
4) How should I design the AIS so that the information providedis reliable and accurate?
5) How can I design procedures to ensure that they meet allgovernment obligations, such as remitting sales, income, andpayroll taxes?
INTEGRATIVE CASE S&S accounting informationsystem
The grand opening of S&S is two weeks away. Scott Parry andSusan Gonzalez are working long hours to make the finalarrangements for the store opening. Most of the employees havealready been hired; training is scheduled for next week.
Susan has ordered inventory for the first month. The store isbeing remodeled and will have a bright, cheery decor. All seems tobe in orderâall, that is, except the accounting records.
Like many entrepreneurs, Scott and Susan have not given as muchthought to their accounting records as they have to other parts oftheir business. Recognizing they need qualified accounting help,they hired a full-time accountant, Ashton Fleming. Scott and Susanthink Ashton is perfect for the job because of his three years ofexperience with a national CPA (Certified Public Accountants) firm.Ashton is looking forward to working for S&S because he hasalways wanted to be involved in building a company from the groundup.
During Ashtonâs first day on the job, Susan gives him theinvoices for the inventory she purchased and a folder with theirbank loan documentation, with the first payment due after the grandopening. She also hands him a folder containing information onrental payments, utilities, and other expenses. Susan tells Ashtonthat she and Scott know little about accounting and he will run theaccounting end of S&S. She adds that the only thing they havedone so far is to open a checking account for S&S and that theyhave kept the check register updated to monitor their cash flow.Scott explains that the sales staff is paid a fixed salary andcommissions and that all other employees are paid hourly rates.Employees are paid every two weeks, with their first paychecks duenext week. Ashton asks Scott what accounting software the companyis using. Scott replies that he and Susan have not had time totackle that aspect yet. Scott and Susan looked at some of thepopular packages but quickly realized that they did not know enoughabout accounting to make an intelligent choice. Scott then tellsAshton that his first task should be to purchase whateveraccounting software he thinks will be best for S&S.
After Scott leaves, Ashton feels both excited and a littlenervous about his responsibility for creating an accountinginformation system (AIS) for S&S. Although Ashton has auditedmany companies, he has never organized a companyâs books and isunsure how to go about it. A million questions run through hishead. Here are just a few of them:
1) How should I organize the accounting records so thatfinancial statements can be easily produced?
2) How am I going to collect and process data about all ofS&Sâs transactions?
3) How do I organize all the data that will be collected?
4) How should I design the AIS so that the information providedis reliable and accurate?
5) How can I design procedures to ensure that they meet allgovernment obligations, such as remitting sales, income, andpayroll taxes?
