Accounting System Controls

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Term Paper Title	Accounting System Controls
# of Words	2131
# of Pages (250 words per page double spaced)	8.52

Accounting System Controls

Accounting System Controls

     In accounting systems, certain controls are needed to ensure that employees are
doing their jobs properly and ensure that the system runs properly. These checks
are in the best interest of the organization. These controls come in the form of
internal and external controls for the system. The internal controls are the
checks that are placed in the system my the company's own management and
directors. Today more and more companies are moving from the manual accounting
systems to computerized accounting information systems. The advantages of a
computerized system are increases in the speed and accuracy of processing
accounting  information. However, as systems become computerized, the internal
controls for that system has to be adapted accordingly. This is because
computerized systems bring with them certain unique problems that can only be
removed or minimized  by  adapting the present controls and adding new controls.
These problems are
        · In a manual system there is a paper trail for the internal auditor to
follow. All records and transactions are kept on paper and so an auditor has
clear and documented proof of what has transpired. Computerized systems rarely
have a clear paper trail to follow. Since computers do all of the sorting of the
information the company rarely sorts the source documents. Also the computer
does most of the calculations and processing so there would not be the amount of
documentation that there would be in a manual system.
        · Another problem of computer systems is the fact that there can be
difficulty in determining who entered the data. In a manual system the identity
of the person entering the data can be identified possibly by the person's
handwriting.  This cannot be done in a computerized system. This makes it very
difficult to determine who is responsible for errors or fraud.
        · Since the computers do all calculations and processing errors can
occur due to bad design of the program. This can be difficult to detect
especially if the error does not occur frequently and only does so under
particular conditions.
        · Computer systems also offer new opportunities for fraud. If a
computerized system is not set up properly and certain checks not put in then
the computer system can be used to defraud the company. The fact that it is
difficult to trace who enters the data only adds to the magnitude of this.

     In order to minimize the risks of erro...

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