Accounting Best Practices, Fifth Edition

12–15. Conduct Transaction Training

Once the preliminary financial statements have been completed, the controller must carefully review all expense, revenue, and balance sheet items to see if there are unusual variances, investigate all of them, and make corrections that result in an accurate financial statement. Depending on the number of errors and the time it takes to research them, this error-checking phase can seriously extend the time required before financial statements are produced.

One way to reduce the number of these errors is to conduct detailed transaction training for all employees who have a role in entering transactions into the computer system (typically a sizeable group). The reason is that the controller’s final review of the financial statements is only a method for removing errors after they have already been made; by eliminating these errors before they happen through proper training, the number of errors that the controller must later research will drop dramatically.

The training must be very specifically targeted at eliminating recurring errors. This is done through a feedback loop. All errors discovered in the financial statements should be noted in a log, along with the name and position of the person most likely to have caused the error. This information is reviewed each month, and a short training program is created, targeted both at the specific person who made the mistake and the type of error that occurred; if the error appears to be a common one ...