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ManualAccountingVersusComputerizedAccountingProceedingsofInternationalConferenceonAccountingEducationReformandDevelopmentConference—JamesAsmanyprofessionalaccountantsandauditorsstate-accountingisalanguageofbusinesswhichisacceptedinalldevelopedanddevelopingcountries.Everycompanyappliesaccountingbecauseitisgenerallyacceptedthatcompanieshavetorevealcertainfinancialandmanagementinformationtothegovernmentandpublicusersandofcoursebecauseaccountingisindispensabletoolinbusinessdecision-makingprocess.Withthedevelopmentofinformationtechnologiesthereweredevelopedmanycomputerproducts(software)thatmakeaccountingaseasyasABCforthosewhousesthem.Fromthispointaccountingcanbedividedintotwobasiccategories:thosewhichapplymanualaccountingandthosewhichprefercomputerizedaccountingsystems.Thispaperistargetsthemainfeaturesofmanualandcomputerizedaccounting,theirbenefitsandshortcomings,andtheircomparison.Fromtheaccountingtheoryitisknownthataccountingcycleincludesthefollowingsteps:journalizingthetransactions,postingthemtoledgeraccounts,preparingtrialbalance,makingadjustmententries,preparingadjustedtoend-of-periodtrialbalance,preparingfinancialstatementsandappropriatedisclosures,journalizingandpostingtheclosingentries,andpreparingafter-closingtrialbalanceatlast.Fromthefirstlookitisnotverydifficultanditissoindeed,butwhentherearethousandsormillionsoftransactionsthesituationdramaticallychanges.Lotsoftransactionsthatmustbeprocessedintheaccountingcyclemakethisprocessroutineandevenalittlemistakeorinaccuracycancauseallthecyclefromtheverybeginninginordertofindandcorrectthemistake.Soastoshedsomelightonthematterletsexamineaccountingcyclemorethoroughly.Everytransaction(eventthatchangethefinancialresourcesorobligationsofthecompany)mustberecognized,classifiedanddocumented;inadditiontheremustbecorrespondingaccountsidentifiedandchanged.Thetransactionsarerecordedinappropriatejournals(generaljournal,salesjournaletc)withtransactiondata,affectedaccounts?titles,debitandcreditofeachaffectedaccountandexplanationspecifiedinthejournalrecord.Theaboveprocedureisusedforeachtransaction.Allthejournalrecordsmustbepostedtotheledgeronaperiodicbasis(dailyorweekly),whichisagroupofaccountsputtogetherandclassified(assets,liabilities,revenue,expensesandequity)?inotherwordsgeneralledgersummarizesallthetransactionswithinaperiodoftime.Inadditionthereisasubsidiaryledgercanbeused,whichisamoredetailedsource,whereindividualitemscomprised(inventory,accountspayableandaccountsreceivable).Generalledgercontainscontrollingaccountswhichsummarizethecontentofsubsidiaryledger.Attheendofaccountingperiodwiththehelpofgeneralledgerthereisatrialbalancecalculatedtomakesurethatdebitandcreditareinbalance(iftheyarenotequalitmeansthatthereisanerrorsomewhere).Thentheremustbeappropriateadjustmentsmadelikedepreciationandincometaxexpenses,adjustedrecordspostedtotheledgerandadjustedtrialbalancecalculated.Afterthistherearefinancialstatementsshouldbeprepared,whichincludebalancesheet,incomestatement,statementofretainedearningsandstatementofcashflows.Thenjournalentriesoftemporaryaccountsareclosedtopermanentaccountsandpostedtotheledger,andatlastafter-closingtrialbalancecanprepared.Inordertostayontopcompanieshavetoanalyzetheperformanceofallorganizationalcells(startingfromunskilledworkersandoperatingpersonnel,andfinishingwithtopmanagersandotherkeypersonnel)anddiscoverallthedeviationsfromtheplan,theircauses,andfinallycompanies?managementhastotakecorrespondingmeasurestoavoidsuchdeviationsinthefuture.Theseproceduresarecalledinternalcontrolsandincludethefollowingfiveelements:controlenvironment,riskassessment,monitoring,informationandcommunication,whichareassessedseparatelyandputtogetherasinglerateoforganization'sperformance.Controlenvironmentmeansthewayoforganization'sinternalcontrol?whichmanagercontrolstheemployees,howandwhomdoesthatmanagerreportsnextabouttheplanperformanceetc.Riskassessmentimpliesmeasurestodetermineallthepotentialrisksinadvance,theircauses,probabilitiesandcounter-measurestoavoidandmanagethem;howcanthoserisksinfluencecompany'sperformanceandfinancialstate;howtominimizethecostsoffacingfinancialrisksetc.Monitoringimpliesqualitycontrolofcompany'soperationsandpersonnel.Informationandcommunicationelementmeansthecontrolovercommunicationflowandthequalityofinformationflowwithintheorganizationinordertominimizethetimeofcommunicationandinformationlosses.Internalcontrolproceduresallowtokeepcompanies?assetsfromdissipationandcontrolproductivityandusefulnessofalldepartments.Let'sreturntothemainissueofthepaper.Manualaccountingimpliesthatemployeesperformthewholeaccountingcyclemanuallyonaperiodicbasis:theycalculatetrialbalances,journalizetransactions,preparefinancialstatementreportsandotherroutines.Ofcourseittakesmuchtime,resourcesandeffortinlargeorganizations.Computerizedaccountingimpliesthattheonlythingthatemployeesdoisrecordingtransactionsintothecomputerwhichprocessestheotherstepsofaccountingcycleautomaticallyorbyarequest.Butthisisaverysimplifiedviewonthecomputerizedaccountingbecausetransactionisacomplexcategoryw