L e a r n I n g o b j e c t I v e s
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- Independent review.
| Double-entry accounting. The maxim that debits equal credits provides numerous opportunities for independent checks. Debits in a payroll entry maybe allocated to numerous inventory and/or expense accounts credits are allocated to liability accounts for wages payable, taxes withheld, employee insurance, and union dues. After the payroll entries, comparing total debits and credits is a powerful check on the accuracy of both processes. Any discrepancy indicates the presence of an error Independent review. After a transaction is processed, a second person reviews the work of the first, checking for proper authorization, reviewing supporting documents, and checking the accuracy of prices, quantities, and extensions. analytical review - The examination of the relationships between different sets of data. PART II CONTROL AND AUDIT OF ACCOUNTING INFORMATION SYSTEMS Information and Communication Information and communication systems should capture and exchange the information needed to conduct, manage, and control the organization’s operations. The primary purpose of an accounting information system (AIS) is to gather, record, process, store, summarize, and communicate information about an organization. This includes understanding how transactions are initiated, data are captured, files are accessed and updated, data are processed, and information is reported. It includes understanding accounting records and procedures, supporting documents, and financial statements. These items provide an audit trail, which allows transactions to be traced back and forth between their origination and the financial statements. In addition to identifying and recording all valid transactions, an AIS should properly classify transactions, record transactions at their proper monetary value, record transactions in the proper accounting period, and properly present transactions and related disclosures in the financial statements. Communication must occur internally and externally to provide information needed to carryout day-to-day internal control activities. All personnel must understand their responsibilities. The updated IC framework specifies that the following three principles apply to the information and communication process: Download 1.2 Mb. Share with your friends:
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