ACCA Applied Knowledge · Business and Technology · The relationship between accounting and other business functions
Karan Ltd's IT department has installed a new integrated enterprise resource planning (ERP) system. When the sales team records a customer order, the system automatically updates inventory records, and later the receivables ledger and general ledger. Which benefit of integration does this best illustrate?
This illustrates single entry of data that flows automatically to related modules such as inventory, receivables and the general ledger. It reduces duplication and inconsistency between departments. It does not remove the need for input controls or guarantee accuracy, because incorrect original data would simply be shared everywhere.
- AElimination of the need for any internal controls over data input
- BSingle entry of data that flows to all related modules, reducing duplication and inconsistencyCorrect
- CGuaranteed accuracy of all data entered by sales staff
- DRemoval of the need for the finance function to review reports
Explanation
In an integrated system data is entered once and shared across modules, which reduces duplicate input and inconsistencies between functions. Controls are still needed, and integration does not guarantee that the original input is accurate, so the other options overstate the benefit.
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