CHAPTER 1: INTERNAL CONTROLS
BEST PRACTICES
Credit & Receivables Manager Lisa Rolfe explains that at The Reynolds Company there are only two AR and two AP staff, along with three senior accountants and a CFO. “We have policies and procedures in place to help with segregation of duties. We lean on others in opposite departments to assist.” Adding, “When coverage is needed for a person out of the office, one of the senior accountants steps in to keep the segregation of duties in place.”
For the city of Airdrie (Alberta, Canada), the taxation department owns the Customer Master File, and any changes must be approved by them, according to the AR Administrator Joyce Burrell.
1. System Controls are those put in place to ensure that the system reflects the policies and procedures established by the organization in reference to the functions carried out within the system(s), with the goal of preventing, detecting and correcting errors as transactions are processed. { System controls may be general or application-specific. General controls address the integrity and availability of the information or accounting system, networks, and applications. Examples of general system controls include security, access, change control, record retention, and disaster recovery (backups). { A critical component of system controls is system access, which should support segregation of duties. Strong passwords should be required, should be limited to use in one system only, and should be changed on a regular schedule. Password sharing must not be allowed, and there should be a lockout process when a computer is not in use. { If this policy is broken, it must be dealt with immediately and in line with the consequences specified in the organization’s policies. Many companies are now tying compensation to system access to prevent password sharing or leaving a computer unattended.
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THE ACCOUNTS RECEIVABLE SPECIALIST CERTIFICATION PROGRAM E-TEXTBOOK
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