Professional accountants play an important role within an organization. There may be computers within an organization that can record transactions and produce accounts; there is still a need for accountants. Before preparing accounts, a firm and their systems, will need to determine the type of accounting policies that will be used. For any set of accounts there may be different choices which can be made regarding the way costs and revenues will be measured and recorded. For example, there are different ways that stock on hand may be assessed, such as first in first out (FIFO) and weighted average cost. Likewise, there may be choices on the way investment costs are handled, either capitalized into the investment, or counted as an immediate cost. The choices have the potential to impact the overall results. Firms may choose their accounting policies in a strategic manner, for example to minimize tax. There are accounting standards which outline what is and is not allowable and give instruction on the different allowable strategies; it is accountants that will be responsible for ensuring compliance.
Accountants may also assess overall performance, make forecasts for the firms' potential future performance, assess and compare potential investments or strategies, identify total costs associated with any course of action, identify cash flow and financing needs and assess options, and play an overall role supporting role to the firms management to make decision which will help the firms goals to be reached. Accountant can also play an overseeing...
It is unlikely that mathematical errors will be present as the processes are automated, but other error types may be present that may impact on potential accuracy. Potential errors include the wrongly categorizing of costs and/or revenues, data entry errors such as the inputting of wrong figures, the omitting of some items, the use of accounting policies that are not acceptable under the relevant accounting standards, wrong data so items are included in the wrong period, and the undertaking pr purposeful fraud,
Question 3
An employee may embezzle money form an employer by paying fake invoices for work that was not performed. Internal controls mat include a requirement for the firm to use authorized suppliers only, where the people authorizing the suppliers are different to those who are paying the suppliers. The use of a system where two signatures are required for authorized checks would provide for a check against the companies that are paid, and the amounts that are paid, matching them to the invoices. Internal audit processes checking invoices against goods that are received.
Question 4
Property and equipment are large investments and the cost of the investment is written off over the years that the assets are used. This may be seen as part of the matching principle, where…
