Tute 7 tutorial class

1) Discussion Question 7–2 2 x 1 marks

What are the purpose of accounting codes? How are they used?

The appropriate use of account codes allows state agencies to accurately record accounting

transactions resulting from operations. A comprehensive listing of codes, when properly utilized, leads to uniformity in recording and reporting of financial information. The incorrect use of accounting codes can lead to inaccurate and often misleading financial statements.

Accounting codes are also used for internal purposes such as the establishment and tracking of revenue and expenditure budgets. Balance sheet accounts can be monitored to highlight problems, such as a large amount of older outstanding receivables or a negative fund balance.

Finally, object codes are used for budgetary control to insure that operations are within legislative intent. (http://www.doa.state.wi.us/docview.asp?docid=611&locid=3)

2) DQ 7-10 4 x 1 marks

What do we mean when we say companies are offshoring business processes? Should companies offshore the accounting or finance funtions?

Business process outsourcing (BPO) is the practice of using a third party, contracted to perform specific, specialized processes on a company’s behalf. Although “outsourcing” in its most basic form has been used for decades, such as when a business uses an outside accountant to balance the books, it has become a practice used by the majority of businesses and large companies, on a much larger scale. By outsourcing certain aspects of “doing business,” the company can focus on its primary purpose, whatever that may be (http://www.wisegeek.com/what-is-bpo-business-process-outsourcing.htm#slideshow)

The first finance and accounting activities to be outsourced are generally transactional activities (that are very simple and easy to automate) such as payroll, followed by