The Revenue Cycle:Physical Systems

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Physical Systems

In this section we examine the physical system. This begins with a review of manual procedures and then moves on to deal with several forms of computer-based systems. The inclusion of manual systems in this age of computer technology is controversial. We do so for three reasons. First, manual systems serve as a visual training aid to promote a better understanding of key concepts. Manual (document) flowcharts depict information as the flow of physical documents. Their source, routing, destination, and sequence of events are visually discernable from the flowchart. In computer-based systems, flows of digital documents are not easily represented on flowcharts and may be difficult for novice accounting information systems students to follow.

Second, manual system flowcharts reinforce the importance of segregation of duties through clearly defined departmental boundaries. In computer-based systems, these segregations are often accomplished through computer programming techniques and password controls that cannot be represented visually on a flowchart. Indeed, a single box (program icon) on a system flowchart may consolidate tasks of many different organizational units.

Finally, manual systems are a fundamental component of the framework for viewing technology innovations. The shortcomings and failings of current generation technology become the design imperative for the next. The first generation of computer technology emerged out of the manual environment. An argument can be made that understanding what used to be state of the art improves one’s understanding of what led us to where we are now.

For these reasons, some instructors prefer to teach manual systems before moving on to computer applications. Others favor moving directly to computer-based systems. This section has been organized to accommodate both teaching styles. Following is a review of manual systems. You may, however, with- out loss of technical content, bypass this material and go directly to computer-based accounting systems located on page 177.

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