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ACCOUNTING INCOMPUTERISED ENVIRONMENT


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OBJECTIVES

Introduction

Meaning

Features Terms

Difference

Advantages And Disadvantages

Functions (Market) Scope And Experiences in Banking

Components

Information Security

Internet And WWW


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Introduction

Manual accounting (olden days)

Accounting machines (mechanical calculator) Second World War (use computer &

peripherals, maintenance of accounts &preparation of financial statement).

PC have become household commodity.


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Meaning

Accounting System perform functions:

a) Captures Business transactions in formaccounting entries.

b) Accounting entries used to preparefinancial statements.

c) Financial statements prepared based onaccounting standards.

d) Financial reports prepared from dataavailable in financial statements.


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Computer

General purpose machine.

Converts raw facts into information. Storing sets of instructions.

Electronic information processing device.

Receiving inputs. Generating outputs with high speed and

accuracy.


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Definations

Hardware-Physical components.

Software-instructions that tells what to do . Software programmes - set of instructions. Programme - set of software. Computer peripherals-printer, video, monitor,

keyboard, disk drive etc. Programmer-computer software professional. Computer Software-instructions of programmer in

computer language in form of computer programme.


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Computer performs

Mathematical calculations.

Complicated mathematical equations. Repeated complicated calculation without

error.


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CLASSFICATION

1.ANALOGUE COMPUTERS:

Process data.

Continuous form.

Scientific & Mechanical fields.

2. DIGITAL COMPUTERS:

Accept data.

Convert data into result by arithmetic operationwith help of computer programmes.

Used in Computerised Accounting.


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Special purposes

3. HYBRID COMPUTERS:

Features of both digital and analoguecomputers combined to create.

Eg: guided missile system.


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FEATURES

1. Speed

2. Accuracy3. Informative Reports

4. Economy

5. Single Stand Alone Unit or a Multiple Use(LAN,WAN,MAN etc).


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TERMS IN CA

1. DATA: facts, observations, assumptions or

occurrences.2. RECORD: group of data items related to an

object of data processing.

3. DATA FILE or FILE: pre-arranged order.

4. SYSTEM: various components that processdata.


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DIFFERENCES BETWEEN

COMPUTERISED AND MANUAL

ACCOUNTING.1. Data stored in Computer are not Visible and

thus, the Trail of Events is Difficult toEstablish.

2. Accounting Data can be Manipulated toGenerate Various otherReports/Statements.


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ADVANTAGES

1. Accurate, High Speed and Low Cost ofOperation.

2. Availability of Various Reports from SameAccounting Data.

3. Error-free Accounting.

4. Automatic Completion of all Records byFeeding Only One Entry into the Computer.

5. Multiple Set of Printouts Available.


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DISADVANTAGES

1. Requirement of Special Programme &

Professional.2. Qualified Staff Required for Operations.

3. Costly Computer Peripherals & Stationery.

4. Regular back-up is Required as Data maybe Lost for Various Peasons.

5. Computer Viruses.


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FUNCTIONS PERFORMED

1. Various C A Software in market:

Tally versions

Ex, accounting software.

Bank 2000 for accounting needs of bank.

b@NKS-24 core banking solution.

A.U.D.I.T.O.R and A.U.D.T.I.M.E. Cash basis S/W

for professionals and their accounts.MEFCOMP accounting S/W for professional.

Quick FA.


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TAILOR A/C S/W

a. Maintenance of all statutory books.

b. Generate various reports.

c. Conversion of currency as per instruction.

d. Process of finalisation of accounts.

e. S/W maintains accounts of all branches and headoffice.

f. S/W capable giving profit earned by entity product-wise, area-wise etc & help management inplanning.


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SCOPE & EXPERIENCES IN BANKING

1. Computerised Bank Operations.

2. Computerised Accounting.

3. Accepting Deposits.

4. Lending.

5. Remittances.

6. Clearing of Cheques.

7. Standing Instructions.

8. Centralised Banking.

9. Automated Banking.


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QUESTIONS LIKE

1. COMPLETE AUTOMATION WHY IT IS

REQUIRED?2. THE NEED OF CENTRALISED

INFRASTRUCTURE.

3. A HAPPY CUSTOMER.


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THE CORE BANKING COMPONENTS

Set of integrated core banking.

To fit the institutions individual businessrequirements.

Easily re-configured (change).

Protecting the organisations strategic

investment and maintaining a unifiedbusiness approach.


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CORE BANKING COMPONENTS

INCLUDE

Core Bank Financial Institution Infrastructure.

Core Bank Product Build.Core Bank Customer Management andCustomer Overview.

Core Bank Account Administration.

Core Bank Payments.

Core Bank Management Information.


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CORE BANKING BENEFITS

CRM strategy , customer database and customer administration.

Cost savings and improved customer service.

Support portfolio growth (flexiblity , capability). Deliver speed to market (online in real-time).

Increases productivity and reduction of errors.

Multi-bank and single-bank operation (languages ,strategies).

Support multi-currency operations.

Increased business & operations (24*7). Management information ,operational data, risk management and

profitability analysis.

Resulting cost reduction and increased operational resilience.

Provide data structures and user-exists , thus reducing maintenance

and upgrade costs.


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TECHNICAL ARCHITECTURE OF

CORE BANKING

Powerful server installed at centralised data centre(HUB).

Every branch will have a branch server. Each user at each branch will have terminal.

These terminals will be connected to branch server.

The branch servers will be connected to central

server (HUB). The branches and the Host will be connected

through a dedicated line.


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SYSTEM LAYERS

Presentation layer:

Delivery layer: (interface b/w front-end andOS.)

Application layer: (driven by system triggersand parameters and environment settings.)

Database layer: (interfaces to databaseusing appropriate call levels and languages.).


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TRANSACTION PROCESSING

1. Primary update method: (customer related

operations.)2. Secondary update method: (used external

transaction records.)

3. Batch processing (daily interest updating

and statistical reports.)


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ONLINE PROCESSING

Majority of transactions are processed

online. Examples include:

1. Account & customer creation

2. Financial transactions

3. Enquiries

4. Maintenance.


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FURTHER ONLINE PROCESSING

Online Day Journal

1. used for internal transaction record posting.2. Sent by requested programs.

3. Updating programs.


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ONLINE PROCESSING - BENEFITS

Basic functions are separated to certain areas.

Allows a flexible system and eases change.

Caters to all types of instruction requirements.

Optimises transaction throughput.

No downtime for Day-end or batch processing.

Entries Database and all the transactions are alwaysavailable.


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CORE BANKING SOLUTIONS

Core banking solutions work on two software:

1. B@ncs24 software that take care of all thetransactions that have been put through at thebranches.

2. The Finance 1 software takes care of postings inthe General Ledger.

The interface for the postings between B@ncs24 andFinance 1, concisely , what is known as GLIF

(General Ledger Interface File).


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INFORMATION SECURITY

Responsibility of every employee inorganisation.

Protecting information assets of bank.

Maintaining the security of data.

Accepted policies of bank.

Take care of various aspects of informationsecurity.


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WHAT IS INFORMATION SYSTEM

SECURITY?

Access control systems and methodologiesComputer operations security

E-mail and internet accessApplication and systems developmentBusiness continuity and disaster recovery planningTelecommunications and network security

Physical securityCryptographySecurity management practicesLaw, investigations and ethics.


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STANDARD PRACTICES FOR USAGE

OF PCs AND LAPTOPS

1. Users are responsible , measures to restrict physical & logicalaccess to desktops.

2. Hardware and software configured securely as per the

guideline of the bank.3. User should not change the hardware configuration settings

,applications installed. Additional S/W can be install only aftergetting it vetted by the competent authority.

4. User should not install any applications or software on theirdesktop.

5. User should not connect modems to the machines or useinternet or any external networks.

6. Passwords selected should be minimum 8 characterscombination of alphabets and digits. Passwords should bechanged at least once every month.

7. Protection measures.


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MEASURES

To prevent the risk of unauthorised access:

Log out of applications or turn off the desktop.

Enable the screen saver with password protection.

Core banking do not leave the terminals in themiddle of a transaction.

Disable the sharing of folders in the desktop withother users over the network.


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PASSWORD MANAGEMENT POLICY

1. Password Usage:

User is responsible for all activities in computeraccounts.

Level security measures

Authentication through valid passwords at both OSlevel & application level.

Have a good password management .

Not to allow anyone else to operate their accounts.


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2. Password Construction:User should choose passwords that are easy to remember but

difficult to guess.Guidelines for password construction are:

Name (that should not used)

Personal information (should not be used)

Common words (should not be used)

Word or number patterns (should not be used)Any words preceded or followed by digit (should not be used)

Strong passwords minimum length 8 characters mix ofnumerals and capital letters.

Create complex ,that is take known word or phrase and convert

it using numerals, special characters and capital letters.


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3. Password Protection:Users should not share passwords.

Users should ensure that nobody is watching whenthey are entering the password into the system.User should not keep written copy of password ineasily locatable place.Users should change their password regularly.

Users who have been authorised to use the smartcards or privaate keys should safeguard themcarefully as compromising the same could have wideramifications.


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INTERNET AND WORLD WIDE WEB

- INFLUENCES ON BANKING

Internet , e-mail and e-commerce.

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