...nce No problem Must no controls or carry risk insurance needed alone Objectives of Controls on ProcessingAccounting controls, like other controls, consist of objective, preventive, feedback, and comparative follo-up elements. More specifically, the objective, the excepted result specified as a preventive measure, the actual result specified as a feedback measure, and the follo-up form the backbone of accounting controls. They provide assurance that accounting processing meets four major objectivesAuthorization approval for a transaction to take place the control objective is to ensure that all transactions are authorized.Recording creating a documentary or computer record of the data in a transaction the control objective is to ensure that all transactions are recorded.Access the use of assets, including production, processing, and transfer to an outside party the control objective is to allo access to assets only for authorized purpose and to record access henever it occurs.Asset accountability having accounting records that describe the organizations assets the control objective is to ensure that accounting records describe only real assets and describe all of them.Specific controls must be designed to achieve each of these objectives. Control success depends on intelligent design and use. Most procedures that serve accounting control objectives can be incorporated into the internal structure of hardare, softare, and administrative routines.A lot of latitude is possible in designing procedure to meet each objective. Hoever, each procedure must be related to one or more objectives by specifying 1 a statement of the planned or excepted result 2 a method for measuring the actual result and 3 recommended follo-up procedures, including comparison of expected and actual results. Procedures that support the respective objectives include the folloingObjective 1 Authorization Designate appropriate individuals to- Set policies and proceduresApprove transactionSet asset valuationsAuthorize policy exceptionsFollo up to ensure policies and procedures ork as intendedFollo up reported information that requires a responseObjective 2 Recording Ensure that all transactions are-RealRecorded in all appropriate accounting recordsProperly valued and classifiedRecorded in a timely aySummarized and posted correctly Objective 3 Access Ensure that all tasks involvingaccess to assets or records are-Appropriately segregated so that the authorization, the process, and the associated record keeping are performed by different individualsDocumented to delineate applicable policies and procedures Performed by competent, properly trained people Recorded pursuant ton applicable policy and procedures Protected from unauthorized access Objective 4 Asset accountability Ensure that all asset records are-Prepared according to authorized policies and procedures Protected from unauthorized access In agreement ith supporting records for examples, that the control account agrees ith the total of the subsidiary ledgerRecorded in agreement ith recent evidence from other entities such as accounts receivable confirmationsRecorded in agreement ith physical examination of assets Above and beyond these accounting controls, data processing controls should ensure that transaction processing outputs are produced by the budgeted inputs, that is, that data processing is operationally efficient. Bibliography 1.ACCOUTING INFORMATION SYSTEMS Edard Lee Summers Ph.D., CPA Arthur Young Professor of Accounting The University of Texas at AustinStartDoes a situation exist in hich management objectives might not be metNoYesould the savings from controls exceed the cost of controls NoCan insurance be boughtNoYesYes S578iACDES4CS8GSt,Bd-C56CJ56CJOJQJ56OJaQJa56CJ5C
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