5th B.

Com DSBM, BBSR Priyadarshini Nayak

COMPUTERIZED ACCOUNTING SYSTEM

Unit – II
Introduction
• Computerized Accounting refers to accounting done with the aid of computers.
• It tends to involve dedicated accounting software and digital spreadsheets to keep
track of a business or financial transactions.
• A Computerized Accounting System is a software program that is stored on a
computer, network server or remotely accessed via the internet and provides great
benefits to the business. It can help streamline accounting procedures as well as
minimize errors.

Objectives of Computerized Accounting

• Labour Saving:
• It refers to annual savings in the labour cost and simultaneously increase in the
volume of work handled by the existing staff through a computer terminal.
• Time Saving:
• Computer systems are faster than human efforts and therefore save good
amount of time spent on creating manual accounting systems.
• The time saved here can be utilized to perform some other tasks.
• Minimization of Frauds:
• Computerization is helpful in minimizing the chances of frauds committed by
employees, especially in maintaining the account books and financial
information.
• Accuracy:
• Accuracy in account information is a very important feature of any business.
• Computerizing accounts can help is reducing errors and achieving accurate
information and results.
• Effect on Personnel:
• It reduces the human effort that was required in maintaining manual account
books.
• It also may improve the moral value of employees as there is fear of getting
caught in case of any discrepancy.
• Convenient data storage and retrieval:
• Data stored in computers are usually portable in nature and can be accessed
anywhere anytime through an internet connection.
• Fetching of required information is fast and easy.
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Features of Computerized Accounting System

• Fast, powerful, simple and integrated
• Complete visibility and enhanced user experience
• Accuracy
• Speed
• Scalability
• Improved business performance
• Quick decision making
• Complete reliability
• Access from anywhere and at anytime

Advantages of CAS
• Universal Application of all accounting activities
• Transactions can be done anywhere and anytime
• Shortens the time period for almost all accounting processes
• Ease of use
• Easy to process voluminous data
• Codification is possible
• Accurate information
• Scalable to any number of records
• Reliable to failures and data loss
• Aids management in decision making processes by providing management reports

Disadvantages of CAS
• Needs heavy initial investments for computerization
• Security and privacy threats
• Loss of data in case of system failures
• An artificial device (without intelligence)
• Possibility of manipulations
• Not affordable by small firms
• Requires training on part of accountants and other users
• High cost of maintenance
• System may be subjected to viruses/malwares or attackers
• Leads to unemployment

Specialized Software for CAS

• In most general terms, Computer Assisted Auditing Techniques (CAATs) refers to any
computer program utilized to improve the audit process.
• It refers to any data extraction and analysis software.
• This would include software such as:
• Spreadsheets (Example: MS Excel)
• Databases (Example: MS Access)
• Statistical Analysis (Example: SAS)
• Business Intelligence (Example: Crystal Reports), etc.
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Introduction to Database
● A database is a structured and organized collection of related data.
● It is a set of interrelated files for real time processing.
● It may be defined as an application package used for efficient storage and retrieval of
data.
● Note:
○ A package software is a collection of programs/software that performs similar
functions or have similar features.
○ Example: Microsoft Office is a package software that consists of MS Word, MS
PowerPoint, MS Excel, MS Access, MS Outlook, etc. all dealing with data storage
and presentation.

Why to use a Database?

● Every organization needs to keep records of transactions they perform with suppliers and
customers.
● Organization needs the records of employees, orders, invoices, etc.
● The business needs to be able to find information quickly and easily as and when required.
● It makes the process of data storage, data organizing and data fetching easier and
convenient to manage, handle and access.
● It can be linked to websites for access over the internet.

Database Terminologies
● Entity:
○ This is the things / objects you are recording information about.
○ Example: Person, Employee, Country, Customers, Product, Library, etc.
● Attributes/Fields:
○ These are the characteristics that describe the entity.
○ For Example: If Employee is the entity, then its attributes may be:
■ Name
■ Employee ID
■ Age
■ Address
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● Record:
○ A record holds all the data relating to a single person or a single transaction, etc.
○ A record is a collection of fields.
○ A record may have as many numbers of fields as per required.
○ It usually gives an overall report regarding a particular member of the entity.
● Table:
○ It is a collection of records arranged in rows and columns.
○ Each column is an attribute value.

● An Organization Database:
○ It contains all the files within the organization.
○ For Example:
■ A College Database may contain the following files:
● Student File
● Employee File
● Course File
● Faculty File
● Non-Teaching Staff File
● Accounts File

Database Models
● Not all databases store data in the same way.
● This depends on the type of database software used.
● Types of Database Models:
○ Hierarchical Database Models
○ Network Database Models
○ Relational Database Models
○ Object Oriented Database Models
● For Example: MS Access Database software is based on the relational database
model.
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Database Management System (DBMS)

● Database Management System (DBMS) is the software that manages the database.
● It is the user interface that allows the user to create, add, delete and manipulate the
data in the database.

Example: A College Database

Primary Key
● A primary key is an attribute of the table that has the capability to uniquely identify
each record in that table.
● Properties of Primary Key:
○ It must be unique
○ It must not have duplicate entries
○ It cannot be NULL

Foreign Key
● A key that is a primary key of one table and a candidate key in another table.
● Used to link two tables in a database.

Linkage & Relationships

● Two or more tables must be linked together in order to deduced some information
regarding the entity.
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● For this we need to repeat some fields (attributes) in all the tables that needs to be
linked. These repeated fields are the common attributes among the tables.
● When we want to link data from different tables, then we have to define relationships
among those tables.
● This involves linking the primary key field of one table with a field in the other table.
● This linkage is performed by assigning foreign keys.
● Foreign key may be one field or a combination of attributes that can identify the
record from both the linked tables.

Database Query
● A query is the information that we want to retrieve or fetch from the database.
● When we want to extract any information from a database then this is referred to as
a “Query”.
● It is a fancy term used to describe the process of retrieving information from the
database.
● The result is a screen display that shows the information you want which have been
extracted from one or more tables.

Features of DBMS
● It allows us to create database files.
● It enables the users to add, delete, update or change data in the database.
● It facilitates in linking tables.
● It allows to query the database.
● The user can produce reports on screen or in printed form.

Procedure of DBMS Usage

The procedure is as follows:
● The user requests a report through the application program. The application program
uses a data manipulation language (DML) to tell the DBMS what is required.
● The DBMS refers to the data model, which describes the view in a language called the
data definition language (DDL). The DBMS uses DDL to determine how data must be
structured to produce the user's view.
● The DBMS requests the input/output control system (IOCS) to retrieve the information
from physical storage as specified by the application program. The output is the
desired report.
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Functions of DBMS
● Storing, retrieving, and updating data.
● Creating program and data independence. Either one can be altered independently of
the other.
● Enforcing procedures for data integrity.
● Reducing data redundancy. Data are stored and maintained only once.
● Providing security facilities for defining users and enforcing authorizations. Access is
limited to authorized users by passwords or similar schemes.
● Reducing physical storage requirements by separating the logical and physical aspects
of the database.

Advantages of DBMS
● The DBMS makes the entry of the data to the system quick and easy.
● Data is organized in a way that minimizes data redundancy (re-entry of the same data
over and over).
● A DBMS allows the organization to have a central store of information, so that it can
be accessed as and when needed.
● DBMS can keep data secure by using authentication methods like passwords, IDs, etc.,
thereby limiting the access to only authorized persons.
● Better access to data for decision making as report creation is convenient.
● Easy data updates and retrievals.
● Reduced data redundancy and losses; and enhanced data integrity.

Disadvantages of DBMS
● The cost of the DBMS software is an overhead for most organizations.
● The designing and implementation is a complex process.
● Requires good amount of computer space as it deals with huge quantity of data.
● Data backup procedures are necessary for the security of data from losses.
● In case of database failure, the impact can be disturbing for the organization.
● Skilled personnel are required to manage and deal with database management
systems.
● In case of no skilled workforce, then additional training needs to be provided.
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MS Access DBMS
● Microsoft Access is a fully functional RDBMS.
● It provides all the features that are needed to manage large volumes of data.
● Any RDBMS categorizes its functional features as follows:
● Data Definition
● Data Manipulation
● Data Control
● Each of the above has its own set of queries (commands in SQL) and deals with a
specific type of task in the database management system.

MS Access Objects
● MS Access uses “objects" to help the user list and organize information, as well as
prepare specially designed reports. Access calls anything that can have a name as an
object.
● When you create a database, Access offers you Tables, Queries, Forms, Reports,
Macros, and Modules.
● Databases in Access are composed of many objects but the following are the major
objects:
● Tables
● Queries
● Forms
● Reports
● Together, these objects allow you to enter, store, analyze, and compile your data.

Object: Table
● Table is an object that is used to define and store data.
● When you create a new table, Access asks you to define fields which is also known as
column headings.
● Each field must have a unique name, and data type.
● Tables contain fields or columns that store different kinds of data, such as a name or
an address, and records or rows that collect all the information about a particular
instance of the subject/entity.
● You can define a primary key, one or more fields that have a unique value for each
record, and one or more indexes on each table to help retrieve your data more quickly.
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Object: Query
● Query is an object that provides a custom view of data from one or more tables.
● These are a way of searching for and compiling data from one or more tables.
● Running a query is like asking a detailed question of your database.
● When you build a query in Access, you are defining specific search conditions to find
exactly the data you want.
● In Access, you can use the graphical query by example facility or you can write
Structured Query Language (SQL) statements to create your queries.
● You can define queries like Select, Update, Insert, or Delete data.

Object: Form
● Form is an object in a database designed primarily for data input or display or for
control of application execution.
● You use forms to customize the presentation of data that your application extracts
from queries or tables.
● Forms are used for entering, modifying, and viewing records.
● The reason forms are used so often is that they are an easy way to guide people
toward entering data correctly.
● When you enter information into a form in Access, the data goes exactly where the
database designer wants it to go in one or more related tables.

Object: Report
● Report is an object in databases designed for formatting, calculating, printing, and
summarizing selected data.
● You can view a report on your screen before you print it.
● If forms are for input purposes, then reports are for output.
● Anything you plan to print deserves a report, whether it is a list of names and
addresses, a financial summary for a period, or a set of mailing labels.
● Reports are useful because they allow you to present components of your database
in an easy-to-read format.
● You can even customize a report's appearance to make it visually appealing.
● Access offers you the ability to create a report from any table or query.
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Object: Macro
● Macro object is a structured definition of one or more actions that you want Access
to perform in response to a defined event.
● An Access Macro is a script for doing some job. For example, to create a button which
opens a report, you could use a macro which will fire OpenReport action.
● You can include simple conditions in macros to specify when one or more actions in
the macro should be performed or skipped.
● You can use macros to open and execute queries, to open tables, or to print or view
reports.
● You can also run other macros or Visual Basic procedures from within a macro.
● Data macros can be attached directly to table events such as inserting new records,
editing existing records, or deleting records.
● Data macros in web apps can also be stand-alone objects that can be called from other
data macros or macro-objects.

Object: Module
● Module is an object in databases containing custom procedures that you code using
Visual Basic.
● Modules provide a more discrete flow of actions and allow you to trap errors.
● Everything that can be done in a macro can also be done in a module, but you don't
get the macro interface that prompts you what is needed for each action.
● Modules are far more powerful, and are essential if you plan to write code for a multi-
user environment, because macros cannot include error handling.
● Modules can be standalone objects containing functions that can be called from
anywhere in your application.
● They can be directly associated with a form or a report to respond to events on the
associated form or report.

SQL: Structured Query Language

● SQL stands for Structured Query Language, which is a computer language for storing,
manipulating and retrieving data stored in relational database.
● SQL is a data manipulation language. It is not a programming language.
● SQL commands are interpreted by the DBMS engine.
● It can be used interactively as a query language within the DBMS.
● They can be embedded within any programming language.
● It is the standard language for Relational Database System.
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● All RDBMS like MySQL, MS Access, Oracle, Sybase, Informix, Postgres and SQL Server
use SQL as the standard database language.

SQL Commands
Types of SQL Commands:
● Data Definition Language (DDL)
● Commands that define a database: Create, Alter, Drop
● Data Manipulation Language (DML)
● Commands that maintain & query a database: Insert, Update, Delete, Select
● Select command is also known as Data Query Language (DQL)
● Data Control Language (DCL)
● Commands that control a database like creating users and authorizing them:
Grant, Revoke

SQL Joins
There are different types of joins available in SQL:
● Inner Join: Returns rows when there is a match in both the tables.
● Left Join: Returns all rows from the left table, even if there are no matches in the right
table.
● Right Join: Returns all rows from the right table, even if there are no matches in the
left table.
● Full Join: Returns rows when there is a match in one of the tables.
● Self Join: It is used to join a table to itself as if the tables were to tables, temporarily
renaming at least one table in the SQL statement.
● Cartesian Join: Returns Cartesian product of the sets of records from the two or more
joined tables.