Accounting Information Systems: The Processes and Controls, 2nd Edition

CORPORATE GOVERNANCE IN REVENUE PROCESSES (STUDY OBJECTIVE 10)

Chapter 5 identified four primary functions of the corporate governance process: management oversight, internal controls and compliance, financial stewardship, and ethical conduct.

The systems, processes, and internal controls described in this chapter are part of the corporate governance structure. When management designs and implements processes for sales, sales returns, and cash collections, they assign responsibility for executing those functions to various managers and employees. As management assigns and oversees these revenue processes, it is carrying out the corporate governance function of proper management oversight.

As described in this chapter, management should also establish appropriate internal controls for revenue processes to accomplish the objectives of safeguarding assets within those processes and ensuring the accuracy and completeness of the data produced by the processes. These internal controls are also part of the corporate governance structure.

When management has designed and implemented processes and internal controls and then continually manages them, it is helping to ensure proper stewardship of the company's assets. Corporate governance requires proper financial stewardship. The processes, internal controls, and feedback data from these systems help management report to owners and other stakeholders about proper stewardship of assets within the revenue processes. These assets would include ...