Visit with a controller or accountant who works for a constr

Visit with a controller or accountant who works for a construction company. Discuss the following questions: a. What role does the accounting system play in the success of the construction company? b. What data does the accounting system collect and how is it used? c. Which of the company’s employees use data from the accounting system? How do they use this data? d. What does it take to successfully operate the accounting system? e. What happens when the accounting system is not functioning properly?

Solution

1)Construction Accounting Is Built Upon Regular Accounting and shares the same basic financial reports for operating and growing a business and preparing annual tax returns and some very rudimentary management decisions. Construction accounting adds many complex layers of reporting mechanisms to show the contractor where their best customer are within psychographic and geographic market segmentation boundaries

2) Based on several construction projects estimated the following average figures for a typical project of US$10 million:

3&4) An accounting information system (AIS) is a system of collecting, storing and processing 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. The resulting financial reports can be used internally by management or externally by other interested parties including investors, creditors and tax authorities. Accounting information systems are designed to support all accounting functions and activities including auditing, financial accounting & reporting, managerial/ management accounting and tax. The most widely adopted accounting information systems are auditing and financial reporting modules.