This document describes the design of a financial reporting system for a wireless telecommunications company in the Philippines. It includes details on the company's operations, accounting processes, reports, and controls. The telecom derives income from postpaid plans, prepaid subscriptions, and internet connections. It also generates revenue from selling SIM cards and modems. Transaction records are stored electronically. The financial reporting system involves updating the general ledger, posting adjustments, preparing financial statements, and generating managerial reports. It includes both general controls over IT resources and application controls to ensure accurate financial reporting.

1. Father Saturnino Urios University
ACCOUNTANCY PROGRAM
Butuan City
Accounting Information System:
Financial Reporting System Design
Telecommunication Company
Wireless Type
By:
Vina O. Cadorna
October 2014

2. AIS:Financial Reporting System Design 2| P a g e
TABLE OF CONTENTS
Page
I. PROJECT BACKGROUND
 Introduction 3
 Nature of Operation 4
II. ACCOUNTING SYSTEM
 Transaction and Source Documents 5
 Processes
o Operation flowchart 6
o Telecommunication diagram 7
 Accounting Process 8
 Reports 9
III. IT CONTROLS
 General Controls 10
 Application Controls 10
IV. SUMMARY 12
V. CURRICULUM VITAE ` 13

3. AIS:Financial Reporting System Design 3| P a g e
PROJECT BACKGROUND
Introduction
Accounting Information System is the collection, storage and processing of financial and
accounting data that are used by decision makers. An accounting information system is generally a
computer-based method for tracking accounting activity in conjunction with information technology
resources. It is responsible for providing timely and accurate financial and statistical reports
Accounting Information System is composed of three (3) main subsystems namely, Transaction
processing system (TPS) that supports daily business operations, General Ledger/ Financial Reporting
System (GL/FRS) that produces financial statements and reports and the Management Reporting System
(MRS) which produces special-purpose reports for internal use.
This paper is focus on General Ledger/ Financial Reporting System. Financial Reporting system
has its significance as a means of effective financial reporting. General ledger system has capabilities to
develop financial data base into reported financial and management information. This process of
financial reporting is important because it impacts all parts of the organization. Regardless of how well
the chart of accounts is set up or how sophisticated the financial reporting system is, people tend to
think of a financial reporting system as ineffective if it does not produce meaningful financial reports in a
timely manner.
This paper will give an idea of a Financial Reporting System applicable to a certain type of
company. This includes how a certain company will generate their income, the Input of data, Processing
and production of Financial Statements.

4. AIS:Financial Reporting System Design 4| P a g e
PROJECT BACKGROUND
Nature of Operation
The Financial Reporting generally has four basic activities performed in the Financial Reporting
System. Update the general ledger, Post adjusting entries, Prepare financial statements and Production
of managerial reports. Hence the process and design varies because of its different nature.
My system design is intended for a Telecommunication Company in a Philippine setting. Understanding
the usiness’ nature must be first before the formulation of such System.
A Telecommunication companies offers services where individuals can exchange ideas and share
thoughts with almost no effort. Telecommunications is a multifaceted and tech-rich industry that is
made up of an assortment of different communication forms (wireless and wire). Since the
Telecommunication is a broad topic I decided to make it more specific. In this paper I’ll e fo used on
the wireless communication form. As a reference I choose Smart Telecommunication as my bases.
Mostly Wireless Telecommunication Companies like Smart Telecommunication derived their
income through their Postpaid Plans, Internet Connection Subscription and Prepaid Subscription. Post
paid Plans is a mobile phone for which service is provided by a prior arrangement with a mobile network
operator and the user is billed after the mobile services at the end of each month according to their use
of services. Internet Connection Subscription is where subscriber pays for their internet connection can
be advance or deferred. Meanwhile the Prepaid Subscription is the largest and most common. A
subscriber pays first for its load before he can avail the services the telecommunication company offers.
Telecommunication Companies also derive their income by manufacturing of simcards and
broadband modem. They sell those to their market before the rendering of service. Those sim cards and
broadband modems are essential.

5. AIS:Financial Reporting System Design 5| P a g e
ACCOUNTING SYSTEM
Transaction and Source Document
Post Paid Plan- the Income is deferred until the end of month which is the payment of Billed
account. The source documents are only the application since the Telecommunication Companies are
emerging for advance technologies. Usually online registration and payment are used. The payment of
Billing Account normally recorded directly to the Computer System used.
Prepaid Subscription mostly done in a load retailer. The Load retailers acquire their Load from
Main Office then distribute it to individuals. Source documents are usually from Smart wireless Centers
and sends the information to the main office.
Internet Connection Subscriptions are more like Prepaid Subscription. It starts at the time of
acquisition of broadband and wifi. Then seek for a loader retailer to avail internet connection services.
Source documents are not present only the retailer and Smart Wireless center agreement can be traced.
The manufacturing of Sim Cards and broadband modem are like a manufacturing company.
Having factory related costs and distribution expenses & defects. The income is recorded at the time
stocks are sold and adjustments in case of return.
The transaction of a telecommunication Companies lack of transaction trails, since it relies on
computers most of the time. Source documents from telecom are not that significant to the control for
the reason that lot of transactions pertaining to pervasive transactions are directly recorded to the
computers.

6. AIS:Financial Reporting System Design 6| P a g e
ACCOUNTING SYSTEM
Process: Operational Flow
Fig. 1
Fig.1 shows the flow of operation. From how income is derived.
Manufacturing of
Sim Cards &
broadband modem
Distribution to Stores
Sales from
Customers
General Ledger
Sales from Retailers
individual
Customers
Prepaid & Internet
subscription
Postpaid
Subscription

7. AIS:Financial Reporting System Design 7| P a g e
ACCOUNTING SYSTEM
Process: Telecommunication diagram
Fig. 2
As seen in the Fig. 2, smart Telecommunication derives their signal from another
company through the ACeS system that provides commercial service to telecommunication Companies
is asia pacific. Therefore such service adds a significant amount on the cost of sales of the company and
is related with their generation of income.

8. AIS:Financial Reporting System Design 8| P a g e
Accounting System
Accounting Process
Fig. 3
Fig.3 shows the Financial Reporting Process of a Telecommunication Company
Sales
from Sim card,
prepaid,internet &
postpaid
Journalizing
General Ledger
updating
Post adjusting entries
Preparation of
Financial System
Output ( report)

9. AIS:Financial Reporting System Design 9| P a g e
Accounting System
Reports
 Statement of Financial Position
 Income Statement
 Statement of Cash Flow
 Statement of Changes in Equity

10. AIS:Financial Reporting System Design 10| P a g e
Controls
General Controls
GCs may also be referred to as General Computer Controls which are defined as: Controls, other
than application controls, which relate to the environment within which computer-based application
systems are developed, maintained and operated, and which are therefore applicable to all applications.
The objectives of general controls are to ensure the proper development and implementation of
applications, the integrity of program and data files and of computer operations. Like application
controls, general controls may be either manual or programmed. Examples of general controls include
the development and implementation of an IS strategy and an IS security policy, the organization of IS
staff to separate conflicting duties and planning for disaster prevention and recovery.
Controls
Application Controls
Application controls refers to the transactions and data relating to each computer-based application
system and are, therefore, specific to each such application. The objectives of application controls,
which may be manual or programmed, are to ensure the completeness and accuracy of the records and
the validity of the entries made therein. Application controls are controls over the input, processing, and
output functions.
 Ensure the input data is complete, accurate and valid
 Ensure the internal processing produces the expected results
 Ensure the processing accomplishes the desired tasks
 Ensure output reports are protected from disclosure
 From the close inspection view they include such things as:

11. AIS:Financial Reporting System Design 11| P a g e
o Edit tests
o Control totals/batch balancing
o Reconciliation of accounts
o Exception handling
Both automated controls and manual procedures should be used to ensure proper coverage. These
controls help ensure data accuracy, completeness, validity, verifiability, and consistency, and thus
ensure the confidentiality, integrity and availability of the application and its associated data.
When we talk about input controls for applications we must look at:
 Input Authorization
 Batch Controls and Balancing
 Error Reporting and Handling
 Batch Integrity in Online or Database systems
In processing controls we look at:
 Data Validation and Editing Procedures
 Processing Controls
 Data File Control Procedures

12. AIS:Financial Reporting System Design 12| P a g e
Summary
The Financial Reporting generally has four basic activities performed in the Financial Reporting
System. Update the general ledger, Post adjusting entries, Prepare financial statements and Production
of managerial reports. Hence the process and design varies because of its different nature.
Mostly Wireless Telecommunication Companies like Smart Telecommunication derived their
income through their Postpaid Plans, Internet Connection Subscription and Prepaid Subscription
.Telecommunication Companies also derive their income by manufacturing of simcards and broadband
modem. They sell those to their market before the rendering of service. Those sim cards and broadband
modems are essential.
The transaction of a telecommunication Companies lack of transaction trails, since it relies on
computers most of the time. Source documents from telecom are not that significant to the control for
the reason that lot of transactions pertaining to pervasive transactions are directly recorded to the
computers.
General Controls relate to the environment within which computer-based application
systems are developed, maintained and operated, and which are therefore applicable to all applications.
The objectives of general controls are to ensure the proper development and implementation of
applications, the integrity of program and data files and of computer operations.
Application Control Application controls are controls over the input, processing, and output
functions. It is to ensure the input data is complete, accurate and valid ensure the internal processing
produces the expected results, ensure the processing accomplishes the desired tasks and ensure output
reports are protected from disclosure.

13. AIS:Financial Reporting System Design 13| P a g e
Curriculum Vitae
PERSONAL INFORMATION
NAME Vina Ocho Cadorna
ADDRESS P-9 Layco Los Angeles, Butuan City
DATE OF BIRTH March 2, 1995
AGE 19 years old
NAME OF PARENTS Venancio D. Cadorna
Emma O. Cadorna
EDUCATIONAL BACKGROUND
ELEMENTARY Los Angeles Elementary School
(SY: 2001- 2007)
SECONDARY Agusan National High School
(SY: 2007- 2011)
TERTIARY Father Saturnino Urios University
(SY: 2011-Present)