Page 125 - BA2 Integrated Workbook - Student 2017

Integrated accounting systems

What are integrated accounting systems?

Accounting systems that companies use range from very simple manual systems to
sophisticated computerised systems capable of producing detailed reports as
required by management.

1.1 Choice of accounting system

Companies can choose to have two separate accounting systems, one for financial
accounting and one for cost accounting, or they can have one integrated system.

The CIMA Terminology defines integrated accounts as a ‘set of
accounting records that integrates both financial and cost accounts using
a common input of data for all accounting purposes’.

1.2 Advantages of an integrated system

The main advantages of integrated systems are as follows:

 Duplication of effort is avoided. Less work is involved maintaining one system
than if two sets of accounts are kept.

 No reconciliation. Non-integrated systems will require periodic reconciliation.

 Avoids confusion. With two sets of accounts, different profit figures may exist
which causes confusion.

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