Tuesday, December 08, 2009 12:04 PM
Butch,
Following up on an earlier conversation, it is my estimate that hiring a forensic accountant to perform a special audit would be quite expensive. I am concerned of the benefit to be derived from such unless evidence to prosecute someone is needed. It is hard to reconstruct transactions without documentation. It is also hard to determine if rules were broken if no written rules existed other than what would be expected from a reasonable person at the time. Any damage has already been done and can not be changed. You can only go forward at this juncture and improve on controls in the future. It may not be cost effective to perform a special audit unless peace of mind is needed or there is some other reason other than general knowledge.
Thanks,
Rick Lowe
Posted with Permission of Rick Lowe, CPA
Tags: accountant, Forensic, transactions
Thanks, Jim. We plan to go one step farther. All credit card purchases will be supported by a Purchase Order, which will contain all pertinent information about that transaction, including who requested, who authorized, how much and which account the transaction is posted to. The transaction receipt will be attached to the Purchase Order for reconciliation with the credit card statement.
The new Purchase Order system is in place as we speak, and will be refined if needed as we develop our accounting procedures. The most important part of that process is reconciliation of those Purchase Orders with monthly credit card statements.
Mr. Junkins: To resolve any future financial disputes Director’s might have with an OM, maybe a file of monthly credit card statements should be kept/safe guarded and copies made for Director records. Perhaps this can insure adequate documentation. If the credit card company will likewise keep a computer file of SC records dating back several years, this could also be another “fail safe” to help rectify any discrepancies. At least a half dozen Directors came and went during the year I was supervisor with Dynamic security. Then when it changed over to an in-house operation, at least another half a dozen Directors were elected or appointed through the following year. Given these constantly changing viewpoints & agendas, adequate documentation should help to make ANY Operations Manager less vulnerable to these occurrences.