The proper use of controls has become an increasingly important part of the accountant's role, given the highly publicized abuse of company assets that have been reported in the press in recent years. The accountant needs to be concerned with control usage in many processes throughout the company, including order entry, purchasing, payables, inventory management, billings, cash receipts, and payroll. In all of these areas, the potential exists for significant asset losses.
This chapter provides detailed answers to questions about which controls to install over each of these areas, and more. The following table itemizes the section number in which the answers to each question can be found:
|4-1||Why do I need controls?|
|4-2||How do I control order entry?|
|4-3||How do I control credit management?|
|4-4||How do I control purchasing?|
|4-5||How do I control procurement cards?|
|4-6||How do I control payables?|
|4-7||How do I control inventory?|
|4-8||How do I control billings?|
|4-9||How do I control cash receipts?|
|4-10||How do I control payroll?|
|4-11||How do I control fixed assets?|
Any company operates under a complex set of policies and procedures that in total comprise a set of processes that ultimately generate revenues and profits. These processes are subject to breakdown at a variety of failure points, either inadvertently or intentionally, through fraud. We install controls to identify or forestall ...