Kế toán, kiểm toán - Chapter 14: The production cycle

Chapter 14The Production CycleCopyright © 2012 Pearson Education14-1Learning ObjectivesDescribe the major business activities and related information processing operations performed in the production cycle.Identify major threats in the production cycle and evaluate the adequacy of various control procedures for dealing with those threats.Explain how a company’s cost accounting system can help it achieve its manufacturing goals.Discuss the key decisions that must be made in the production cycle and identify the information required to make those decisions.Copyright © 2012 Pearson Education14-2Production CycleCopyright © 2012 Pearson Education14-3The Production CycleBusiness activities and information processing activitiesRelated to manufacturing of productsCopyright © 2012 Pearson Education14-4Production Cycle ActivitiesProduct designPlanning and schedulingProduction operationsCost accountingCopyright © 2012 Pearson Education14-5Production Cycle General ThreatsInaccurate or invalid master dataUnauthorized disclosure of sensitive informationLoss or destruction of dataCopyright © 2012 Pearson Education14-6Production Cycle General ControlsData processing integrity controlsRestriction of access to master dataReview of all changes to master dataAccess controlsEncryptionBackup and disaster recovery proceduresCopyright © 2012 Pearson Education14-7Product Design ThreatsPoor product design resulting in excess costsCopyright © 2012 Pearson Education14-8Product Design ControlsAccounting analysis of costs arising from product design choicesAnalysis of warranty and repair costsCopyright © 2012 Pearson Education14-9Planning and Scheduling ThreatsOver- or underproductionCopyright © 2012 Pearson Education14-10Planning and Scheduling ControlsProduction planning systemsReview and approval of production schedules and ordersRestriction of access to production orders and production schedulesCopyright © 2012 Pearson Education14-11Production Operations ThreatsTheft of inventoryTheft of fixed assetPoor performanceSuboptimal investment in fixed assetsLoss of inventory or fixed assets due to fire or other disastersDisruption of operationsCopyright © 2012 Pearson Education14-12Production Operations ControlsPhysical access controlDocumentation of all inventory movementSegregation of duties—custody of assets from recording and authorization of removalRestriction of access to inventory master dataPeriodic physical counts of inventory and reconciliation of those counts to recorded quantitiesPhysical inventory of all fixed assetsRestriction of physical access to fixed assetsMaintaining detailed records of fixed assets, including disposalTrainingPerformance reportsProper approval of fixed asset acquisitions, including use of requests for proposals to solicit multiple competitive bidsPhysical safeguards (e.g., fire sprinklers)InsuranceBackup and disaster recovery plansCopyright © 2012 Pearson Education14-13Cost Accounting ThreatsInaccurate cost dataInappropriate allocation of overhead costsMisleading reportsCopyright © 2012 Pearson Education14-14Cost Accounting ControlsSource data automationData processing integrity controlsTime-driven activity-based costingInnovative performance metricsCopyright © 2012 Pearson Education14-15Assigning Production CostsJob-Order CostingAssigns costs to specific production batches, or jobsIf the product or service is uniquely identifiableProcess CostingAssigns costs to each process, or work center, in the production cycle, and then calculates the average cost for all units produced.If the product or service is similar and produced in mass quantitiesActivity-Based CostingTraces costs to the activities that create themUses a greater number of overhead poolsBatchProductOrganizationIdentifies cost driversCause-and-effect relationshipCopyright © 2012 Pearson Education14-16