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Accounting Best Practices, Fifth Edition by Steven M. Bragg Englewood, Colorado

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14–15. Use Automated Error-Checking

Despite the best possible training and experience, it is still possible, if not likely, for a general ledger accountant to enter incorrect information into the general ledger, or to not catch incorrect information others have entered. This information may not be caught until it appears in the preliminary financial statements, necessitating a hurried investigation and correction, which delays the completion and delivery of the statements. Given the volume of transactions summarized in the general ledger, it would take a miraculous accountant to catch all possible irregularities before they are reported for the rest of the company to see in the financial statements.

The solution is to use automated error-checking. This approach can take a variety of forms. One is that the journal entry input screen contains controls over the size of entries that are allowed or the accounts to which entries are made. For example, any entry over $1 million may be automatically rejected, as would any entry to retained earnings (though with an override by a person with the appropriate password, since sometimes these preset boundaries will be exceeded). Another option is for the system to allow only a preapproved set of journal entries, all with preset accounts to which changes will be allowed. All other journal entries will require a special password to enter. Yet another approach is to use a report writer to explore all of the transactions that have been entered into ...

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