Accounting and Audit Control

Study Notes

Accounting Errors Detection

Redacting errors in customer accounts helps prevent future sales and potential financial theft.
Audit and closure of audits ensure correct customer invoices and valid sales/payment data.

Payment Processing

Customer payments are processed in batches, allowing for batch counting to detect accounting errors.
All funds are approved to pay customers equal to the balance of all customer accounts.
Updated customer account numbers are compared with received check numbers to process transactions accurately.

Control Measures

Independent checks on account accuracy are performed through monthly transfers, prompting customers to report discrepancies.
Reconciliation of accounting records and general ledger data ensures accuracy of accounts receivable.

ERP System

Financial posting can only be done manually in the ERP system, eliminating data entry errors.
Processing errors can still occur, and proper division of labor can reduce this risk.

Fraud Prevention

The ERP system should be configured to prevent employees from stealing products by selling and writing to colleagues.
Credit providers should not have the right to issue purchase orders or access customer accounts.
Debtors should not be able to pay off credit cards to prevent money theft.
Orders should be adjusted to match all credits on sales invoices, and credit checks should be prevented without customer returns.

Supervisory Review

A special supervisory review and confirmation is required to ensure the company's position in favor of the customer receiving the product and obtaining credit.

Selection Process

Selection is the process of choosing the best candidate for a job opening.
The selection process includes: preliminary reception of applications, selection tests, selection interviews, references and background checks, and a hiring decision.

Selection Tests

Selection tests are used to assess the match between an applicant and the job requirements.
Types of tests include: performance tests, performance simulations, and paper-and-pencil tests.
Well-designed tests are: standardized, objective, have norms, are reliable, and valid.

Selection Interviews

Interviews are formal conversations to assess a candidate's suitability for a job.
Types of interviews include: structured, unstructured, mixed, behavioral, and stress interviews.
The purpose of interviews is to assess if the applicant can do the job, will do the job, and compare with others.

Other Selection Processes

References and background checks verify an applicant's credentials and past work experience.
Medical examinations ensure an applicant is physically and mentally capable of performing the job.
Environmental factors affecting the selection process include: legal considerations, speed of decision-making, organizational hierarchy, application pool, type of organization, and probationary period.

Orientation

Orientation introduces new employees to their job responsibilities, organizational policies, co-workers, and work environment.
The purposes of orientation include: developing realistic job expectations, improving productivity, saving time and effort, improving employment stability, and reducing conflict.
Orientation programs cover: organizational issues (history, policies, benefits) and job-related issues (job objectives, tasks, safety requirements).

Performance Appraisal

Performance appraisal is a formal system of periodic review and evaluation of an individual's job performance.
The main uses of performance appraisal include: performance improvement, compensation adjustments, placement decisions, training and development needs identification, career planning and development, and feedback to the human resource function.

The Performance Appraisal Process

Establishing performance standards based on job descriptions.
Communicating the standards to employees.
Measuring actual performance.
Comparing performance with standards.
Discussing the appraisal with employees.
Initiating corrective action as needed.

Responsibility for Appraisal

Immediate supervisor, peers, self-appraisal, subordinates, group appraisal, or combinations of the above.

Performance Appraisal Methods

Rating scales
Critical incident
Essay
Ranking
Work standards
Management by objectives (MBO)

Employee Placement and Termination

Placement refers to the assignment or reassignment of an employee to a new job.
Placement decisions are made jointly by the employee's supervisor and top management, with advice from the human resource department.

Promotion, Transfer, and Demotion

Promotion is the movement of an employee to a position higher in pay, responsibility, and/or organizational level.
Transfers involve the reassignment of an employee to a position with similar status and pay.
Demotions are the downward movement of an employee to a position lower in responsibility, status, and pay.

Termination

Termination is the permanent separation of an employee from an organization.
Reasons for termination include: the employee finding a better-suited position, wanting a change, or economic reasons.

Description

This quiz focuses on auditing processes to detect errors in customer accounts, ensuring accurate invoices and payment data. It covers batch counting and approval of customer payments to prevent financial theft.