Accounting Information System Essay

Pages: 2 (650 words)  ·  Bibliography Sources: 2  ·  File: .docx  ·  Level: College Junior  ·  Topic: Accounting

Accounting Information System

Greater Providence Deposit and Trust needs more effective control and audit procedures over the disbursement of loan funds, with greater oversight and validation of approved customers getting the loan amounts by check, not by cash. A fundamental flaw in the processes Providence relied on was to allow a person with audit control over the financial statements to allow have loan origination and decision-making authority eventually up to $25.000. A fundamental design criterion for ensuring auditor employees do not gain access to loans and embezzle is to both rotate auditors through an organization while also never allowing anyone with audit clearances to also have loan approval authority (Van Wijk, Holmes, 2007). Clearly Providence Deposit and Trust broke this fundamental rule of sound risk management. Creating an effective division of labor across auditing, accounting, and loan management can avert millions of dollars in embezzlement over time, ensuring auditing procedures track transactions by originator and requiring identification before dispersements are made (Wells, 1998).Buy full Download Microsoft Word File paper
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Essay on Accounting Information System Assignment

Another strategy Providence Deposit and Trust could concentrate on reducing fraud risk is to rotate loan clerks and the auditors assigned to each type of loan over time. The continual rotation of loan clerks and auditors will eventually disrupt patterns of fraud and embezzlement, making them easier to discover and prosecute (Wells, 1998). The spot-check based auditing of loans and the use of random sampling of transactions throughout any given loan clerk's tenure is also an excellent idea. Going as far as to call customers to see if the loan transaction met their expectations or not would not only provide insights into customer satisfaction, it would also ensure that loans were actually being originated by real customers. Another area the bank could significantly improve the loan review procedure would be to audit the deposit of each loan dispersements or check down to the individual account number of patrons. In fact the bank could put into place an innovate marketing and customer service… [END OF PREVIEW] . . . READ MORE

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Accounting Information System.  (2011, October 22).  Retrieved June 4, 2020, from https://www.essaytown.com/subjects/paper/accounting-information-system/16766

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"Accounting Information System."  22 October 2011.  Web.  4 June 2020. <https://www.essaytown.com/subjects/paper/accounting-information-system/16766>.

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"Accounting Information System."  Essaytown.com.  October 22, 2011.  Accessed June 4, 2020.
https://www.essaytown.com/subjects/paper/accounting-information-system/16766.