SOFTWARE REVIEW
BARRY RENDER, Feature Editor, Rollins College

Professor Roohani teaches Accounting Information Systems (AIS) at Bryant College. He believes that information technology has significantly influenced both the practicing and teaching of accounting. Many practitioners have discovered that computers produce faster and better results. Although there are many general ledger programs to supplement accounting textbooks, these programs merely emphasize double-entry mechanics. On the other hand, recent computerized accounting packages generally go beyond such mechanics and can give students a better picture of the accounting function in a small business. One such package is One-Write-Plus (OWP). This is one of the most popular software packages used in Dr. Roohani's senior-level AIS course. First, it re-enforces the dynamics of the transaction processing. Second, it familiarizes students with the error checking, application of internal controls, and audit trail in a computerized environment.

LET YOUR COMPUTER DO THE ACCOUNTING

by Saeed J. Roohani, Bryant College

Today, you don't have to be an accountant to do your own accounting. Although knowledge of basic accounting (or an overview of asset, liability, revenue, expenses, and equity) would be very helpful, many recent computerized accounting packages are designed for non-accountants and offer more than general ledger (GL) applications. They are also good teaching tools to re-enforce the dynamics of the transaction processingþthe variety of activities a company undertakes in its day-to-day operationsþwithout too much emphasis on ledgers. Some low-price packages, such as One-Write-Plus (OWP), include the following modules: payroll with federal and state tax tables, check writing, accounts receivable, accounts payable, budgeting or financial analysis, and sample documents (Figure 1).

What is the "best" accounting software? The best accounting software is the one that is easy to use and fits the size of your business. The size and level of activities of the company are important considerations when adopting a new accounting software. For example, a partnership such as a medical practice or a small manufacturing plant may be better off with an easy-to-use inexpensive accounting software. One-Write-Plus offers the best of both worlds: easy to use and easy to buy. It is about $200 from the developer (not including an educational discount) and is among the top ten products on the market.

OWP can be used by a small-to-medium size accounting firm that serves a few audit clients but provides write-up and tax services to many others. A write-up accounting service is when an accounting firm prepares financial statements for a non-audit client. OWP can handle write-ups for 99 different clients. This also makes it easy for an instructor to use the software as a teaching tool. With this easy-to-use software, each student in the class has an opportunity to create his/her own company, observe the accounting practice, and finally evaluate the software in terms of its capabilities and the adequacy of internal controls. Internal controls provide management (and the auditor) reasonable assurance that assets are safeguarded and transactions are authorized and properly recorded. In my AIS course, each student is required to evaluate several popular accounting and business software.

The Accounting Practice: Overview of OWP

OWP works under the DOS operating environment and is fully menu-driven. It supports a variety of organizations, including a general business, a church, a manufacturing operation, a farm, and a local government. There are fourteen charts of accounts (templates) for fourteen different organizations. In addition, a student (user) can define his/her own chart of accounts.

For every new company, a chart of accounts has to be selected and saved. Once a chart of accounts has been created, the list can be accessed by a single key (F5). If the student (user) wishes to convert a manual system to a computerized system, the most tedious part of the conversion is setting up accounts with beginning balances.

The initial setup also requires manual entry of every customer, vendor, and employee. For example, once information about a vendor or employee is given, OWP creates information cards for these individuals. Thereafter, these cards can be retrieved by using a single keystroke (F6) in the check writing or payroll module. Then, the student (user) is ready to enter daily transactions (debit and credit entries) that are immediately posted to the electronic general ledger. After the initial recording of a transaction, other related accounts are automatically updated by using the save key, F10. Once the transaction is saved, however, it can not be edited. Corrections can be done only by making a reversing entry. This is true for almost all computerized accounting systems.

In a manual system, a sales transaction may use three accountsþcash, receivables, and sales tax. Most accounting textbooks treat this as one entry. In a computerized accounting system such as OWP, however, the system updates the above three accounts in addition to updating the inventory account, customer's information card (including customer's credit limit), trial balance, income statement, and balance sheet. Using OWP as a teaching tool, an accounting instructor can demonstrate to students the dynamics of a transaction processing system.

Interestingly enough, in a manual system, accountants or students often spend a lot of time balancing the trial balanceþthe process of testing the accuracy of posting to accounts. In a computerized accounting system, however, this process seems to be unnecessary since before a transaction is saved (F10) it has to be balanced. Nevertheless, OWP presents the trial balance. This may make the transition from a manual to a computerized system an easy one for accountants.

Internal Controls and Audit Trail

It is important to note that most likely there is an inverse relationship between the ease-of-use and the number of built-in internal controls (safeguards) within the system. Weaknesses in built-in internal controls increase the chance of errors or unauthorized transactions. Evaluation of the company's internal controls is heavily emphasized in an AIS or auditing course. The following are notable built-in internal controls and audit trails within OWP.

First, OWP supports a modular password system. Further, there is an optional password for each of the following modules: General Ledger (Master), Accounts Payable, Accounts Receivable, and Payroll. Moreover, there is a password for each sub-menu of each of the above modules. Second, prior to printing a check for a vendor, OWP provides a report showing the cash balance before and after printing the check (Figure 2). If for some reason the check is not printed, the vendor and cash account balances remain unchanged. Cash receipts are also posted after printing and confirming. Third, the software gives a red flag when the amount of invoices exceeds the customer's credit limit. All sales invoices can be saved and stored on the hard disk. For this reason, there is a COMPRESS function to manage spacing on the hard disk. Finally, the payroll module cannot issue checks without the following information: tax ID, FICA wage limit, and withholding tax. As part of evaluating an accounting software, each student in my Accounting Information Systems course uses an evaluation form and briefly describes input, processing, and output controls. Generally, students enjoy discussing the adequacy of internal controls after using an accounting software.

Other Uses of OWP

OWP interfaces with other DOS applications such as Lotus (ver. 2.2, 2.01, 3.0, and 3.1), Quattro-Pro, and WordPerfect (5.0). The user can download data from OWP to a spreadsheet for further analysis. Just like any other conversion program, the student (user) should be aware that not all versions of a particular software are supported by OWP.

OWP can prepare budgets and report variances based on information available from prior periods. It also supports a variety of house-keeping functions of a small businessþwordprocessing, reporting past due customers using the computer clock, form letters and invoices to customers using mail merge.

Final Comment

You should expect to spend some time becoming familiar with the logic of any software, even with an easy-to-use software such as OWP. OWP is an easy-to-use and powerful tool in helping students see and understand activities of a typical accountant in a small business. Students can see for themselves that ledgers, as some accounting textbooks describe them, no longer exist in the real world.

SAEED J. ROOHANI is an assistant professor and teaches Accounting Information Systems at Bryant College in Rhode Island. He received his D.B.A in accounting from Mississippi State University. His current interests include an events approach to Accounting Information Systems and EDP Auditing. He is a member of the American Accounting Association.