Chapter 2. General Accounting Manual


The general accounting manual is intended for the use of the accounting staff, both at the headquarters location and at any outlying locations that may have somewhat less broad-based accounting functionality. It may also be requested by internal and external auditors, who use it as input to their decisions to test the level of control on various types of company transactions. In rare cases, it may also be used as evidence in legal disputes, such as when a company must prove its level of controls if accused under the Foreign Corrupt Practices Act.

The manual is most efficiently produced if it is printed in a single standard format, rather than being subdivided for people or locations having limited accounting responsibilities. However, in situations where the number of documented transactions is excessively large, it may make sense to separate the documents into orderly groupings for specific recipients so that a limited number of standard manuals can be issued, rather than a complete set.

There are a variety of documents that may be included in the general accounting manual. The decision to include or exclude a document should, to some degree, be based on the number of times that documents are needed. For example, if an assistant controller is constantly being pestered with questions about what account codes to use for various transactions, then it makes sense to include a set of standard journal entries in the manual. However, if information ...

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