Accounting Best Practices, Fifth Edition

Total Impact of Best Practices on the Financial Statements Function

This section gives an overview of how and when the best practices described in this chapter should be implemented, and the total impact of these changes on the financial statement reporting function.

The “how” of implementing best practices in this area is answered by: “Do them in big blocks.” The reason is that, in general, these best practices are very easy to implement and can be installed in clusters. Given their minimal impact on department operations, they rarely have much of an impact on employee morale, so there is no restriction on multiple implementation projects at the same time. A key issue is that a number of these implementations do not have a clear beginning and end. For example, training the staff in closing procedures, or reviewing wait times, will always require continuing review, because the state of the art will continually change, making it necessary to go back to these items constantly. Thus, the best approach is multiple best practice implementations, which are constantly reviewed.

The other key issue is implementation timing. For most of these best practices, it is best to conduct an implementation outside of the period when financial statements are prepared. This point is best illustrated by perusing Exhibit 12.6. This exhibit clusters all of the best practices into the time before the end of the reporting period, in the midst of it, or after it. The vast majority of the practices fall ...