Engagement
Internal controls
We document which person may record a transaction, which person must approve it, and which documents must accompany the amount before anyone posts it. Your staff continue to keep the books. We do not perform an audit, and we do not issue an opinion.
When the process depends on one person
The books often stay current only because one person remembers the exceptions. A control gives the department a path it can follow every period, including during that person's absence.
The controls we document
We write down which person may record a transaction, which person must approve it, and which steps require a second person. That separation of recording and approval is segregation of duties. We also write down which document must be attached before posting, and which record shows that the step happened.
The accounting system already in place
We write these controls for the company's current accounting system. Your staff still record the transactions, and they follow the same path each period.
How the work proceeds
We begin with the transactions the company records now. For each type of transaction, we name the person who may record it, the person who must approve it, and the document that must be attached before the amount is posted.
We then write the review that follows the posting. A second person compares the entry with the document, and the comparison itself is recorded. The written controls remain with the company after the engagement, and the staff continue to keep the books.
Questions
- Is this an audit of internal controls?
- No. We write the controls your accounting staff will follow. We do not issue an audit opinion.
- Do you replace the controller or the accounting staff?
- No. Your staff keep the books. At the end of the engagement, they have one path for recording, approval, and review.
- What does the company receive at the end?
- The company receives a named person for each step, the evidence that step requires, and a record showing that the step was completed.
- How does an engagement start?
- We begin with the transactions the company records now, and with the people who record them. The first step is to name who may record a transaction, who must approve it, and which document must accompany the amount.
- How long does it last?
- The engagement lasts through the writing of the controls and the first period in which the staff follow them. The agreement states the end date.
- How does this fit the accounting system the company already has?
- The controls are written for that system. QuickBooks, Oracle, or another ledger stays in place, and nothing is installed on company computers.