Duties of an auditor

An auditor is generally as the watchdog of the business protecting the interests of its owners. He must be very careful while discharging his duties. He should be honest in his work and bold enough to alert the owners regarding any malpractices or frauds. In this context the auditor discharges certain duties and functions.

The important duties of an auditor are:

• Prepare audit reports
• Detection and prevention of errors and fraud
• Evaluation of internal control system
• Making suggestions for changing accounting system
• Comply with auditing standards
• Checking whether the books of accounts are maintained according to the requirement of law
• Adhere to the code of ethics and code of professional conduct
• Certifying whether the profit and loss account and balance sheet discloses a true and fair view of the state of affairs of the business.

Rights of an auditor

The company Act confers extensive power on the auditor. The following are the statutory rights of an auditor:

• Right to access to books of accounts
• Right to obtain information and explanations
• Right to make suggestions to the board
• Right to visit branches
• Right to receive notice of any general meeting
• Right to sign the audit report
• Right to remuneration
• Right to indemnified
• Right to take legal and technical advice

Methods of transaction processing system

Following are the commonly used methods for transaction processing:

• On-line processing

In online processing, transactions are entered online, validated and if found valid, are processed immediately. After processing the input data, the system gives some signal or confirmation to the user as to  the completion of processing.

Online processing system is that type of processing in which data can be directly entered into the system and results are available immediately. Under online processing system transaction can be recorded in the related files and the existing file can be updated.

On-line processing system is highly suitable for processing banking transactions. Customer’s accounts can be updated after each deposit and withdrawals.

•  Batch processing

in a batch processing system transactions are collected and accumulated over a period of time and processed periodically. such as weekly or monthly. Under batch processing the data collected is not put for processing immediately, rather waits for accumulation of such data.

Batch processing system can be effectively utilized in the baking industry. Batch processing is more economical method of data processing. However batch processing is also not free from defects. Most often master files are remain outdated and therefore immediate response are not obtained.

• Real time processing

Under the real time processing system data is processed immediately as it is originated without waiting to accumulate batches of data. Data is fed directly into the system from on-line terminals.

Real time processing aims at not only processing data immediately but the results available to control an ongoing process. The essential feture of real time system is that the input data to be processed quickly so that further action can be taken immediately on the basis of output. Ex: traffic signal control, flight control.

Real time system of data processing can be effectively used in the following application areas.

• The latest position of account balances of customers of  bank can be ascertained within few seconds.
• The method can successfully use for inventory management since latest  position of stock can be displayed at any time.

Transaction processing cycle

Transaction processing systems capture and processes business transactions. Then they update organizational files and database and produce a variety of information for internal and external use. Transaction processing systems generally consist of five stage cycle.

• Data entry

The input activity in transaction processing systems involves a data entry processes. In this processes, data is captured, or collected by recording, coding, and editing activities. Then the data may be converted to a form that can be entered into a computer system. 

• Transaction processing

Transaction processing systems process data in two online processing, batch processing and real time processing.

• File and database processing

File and database processing are the basic activities of transaction processing systems. These are also known as file and database maintenance which means that an organizations files and database must be maintained by its transaction processing systems so that they are always correct and up-to-date.

• Document and report generation

The final stage in the transaction processing cycle is the generation of information products such as documents and reports.

• Inquiry processing

Many transaction processing allows to use internet and web browsers or database management query languages to make inquiries and receive responses concerning the results of transaction processing activity. responses are displayed in a variety of pre specified formats or screen.

Key properties of transaction processing

The four key properties of a transaction are follows:

• Atomicity

Atomicity means that a transaction is either completed in full or not at all. Transactions are known an atomic, meaning that transaction will either happen or not happen .TPS systems ensure that transaction take place as whole and not in parts.

• Consistency

TPS must always be consistent to follow its own rule. If errors occur in the transaction on either side, then transaction will fail.TPS systems exist within a set of operating rules.

• Isolation

Transaction must appear to take place in isolation. Isolating transaction means that other processes never see information during the transaction. They may see information before or after the transaction , but not during the transaction.

• Durability

The transaction must be durable. After a transaction successfully completes, changes to data persist and are not undone, even in the  event of a system failure.

Components of Transaction Processing System

A computer based transaction processing system has the following components:

• Input

The first component in the production of information from transaction processing system is the capturing and feeding data into the computer. In transaction processing system , various source documents are used as input documents. Such as :sales order, purchse order, invoices, etc.

• Processing

The greatest use of computer in data processing is its ability to process data quickly. Transaction entered in journals and registers in the order of its occurrence. All transactions are then grouped together according to its nature and recorded at one place.

• Storage

Storage is a greatest advantage of computer. With the help of computer we can store large amount of data and information at the time of data processing. Data can be stored both on the internal and external memory. Data is organized as records and files for storage purpose. Generally two types of files are used for storing information. They are file and master file .a master file contains data that are of a permanent nature.

• Output

Output is the information produced by an information system. Variety of outputs can be produced from a TPS which can be used for various purposes. Many of the output come in the form of documents and reports.

TPS(Transaction Processing System)&its features

Meaning

Transaction processing system is a important type of Management information system. It is the earliest type of information system. Previously transaction processing was done manually. But today, with the development of information technology, data processing is done electronically. A transaction processing system collect, stores, modifies and retrieves the transactions of an organization.TPS is an information system that processes data arising from the occurrence of business transaction. And it also processes day to day transactions of an organization to carry on its business operations. Transaction processing often includes the activities like calculation, storage and retrieval, classification, summarization and sorting. And it also includes cash registers, recording cash withdrawals, purchase order recording, purchases etc.

Definition

Laudon define transaction processing system (TPS) as” transaction processing systems are computerized systems that perform and record the daily routine transactions necessary to conduct the business”.

Important features of transaction processing system

The following are the important features of Transaction Processing System:

• Rapid response

The response time of a TPS is important because a business cannot afford to have their customers waiting for long periods of time before making a transaction.TPS system are designed to process transactions virtually instantly. It takes only few seconds for a transaction.

• Reliability

Transaction processing system should be reliable. Customers will not tolerate mistakes. TPS system is always should contain sufficient safety and security measures.

• Inflexibility

A TPS wants every transaction to be processed in exactly the same way, regardless of the user, the customer or the time of day. Transaction must be processed in the same way each time to maximize efficiency. If a TPS was flexible, different types of data would be entered in different orders.

• Historical data

TPS produces information on the historical basis. Because TPS generate information taking into account transactions already taken place in the organization.

• Link with external environment

Transaction processing system establishes the relation with external environment  Because TPS distributes information to its customers and suppliers.

• Distribution of information to other systems

TPS produces information and distributes it to the other type of systems. For ex: sales processing systems supply information to the general ledger systems.

• Controlled access

Since TPS systems can be such a powerful business tool, it must be able to allow only authorized employees to access it at any time. Restricted access to the system ensures that employees that employees who have the authority will only be able to process and control transaction.

Basics of Share Trading through Stock Exchanges

Cost of Inventories

1The cost of inventories shall comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
Costs of purchase

The costs of purchase of inventories comprise the purchase price,
import duties and other taxes (other than those subsequently recoverable
by the entity from the taxing authorities), and transport, handling and other costs directly attributable to the acquisition of finished goods, materials and services. Trade discounts, rebates and other similar items are deducted in determining the costs of purchase.
Costs of conversion

The costs of conversion of inventories include costs directly related to the units of production, such as direct labour. They also include a systematic allocation of fixed and variable production overheads that are incurred in converting materials into finished goods.
Fixed production overheads are those indirect costs of production that remain relatively constant regardless of the volume of production, such as depreciation and maintenance of factory buildings and equipment, and the cost of factory management and administration. Variable
production overheads are those indirect costs of production that vary
directly, or nearly directly, with the volume of production, such as indirect
materials and indirect labour.

Other costs
Other costs are included in the cost of inventories only to the extent that they are incurred in bringing the inventories to their present location and condition. For example, it may be appropriate to include
non-production overheads or the costs of designing products for specific
customers in the cost of inventories.
Examples of costs excluded from the cost of inventories and recognised as expenses in the period in which they are incurred are:
(a) abnormal amounts of wasted materials, labour or other production costs;
(b) storage costs, unless those costs are necessary in the production process before a further production stage;
(c) administrative overheads that do not contribute to bringing inventories to their present location and condition; and
(d) selling costs.

Benefits of E-Governance |Pillars of E-Governance

WHAT IS E-GOVERNANCE.

The term ‘e-government’ or ‘digital government’ is also used instead of ‘e governance’.Online working of a government or providing its services online to its citizens at their door step is known as E-governance.

Benefits of e-governance

.1.Better access to information and quality services for citizens.2.Simplicity, efficiency and accountability in the government.
.3.Expanded reach of governance.
4.Minimum use of hardcopy.
5.More convenient hours.

PILLARS OF E-GOVERNANCE

.1.Process.:-A series of actions or steps taken in order to achieve a particular end.

2.People.:-The supporters or employees of a person in a position of power or authority.

3.Technology:-The application of scientific knowledge for practical purpose, especially in industry.

4.Resources:-An action or strategy which maybe adopted in adverse circumstances.