Hello, this is Huw Morgan from the Alliance Manchester Business School.
This is the 11th talk in a series of lectures on accounting records.
This session, identifies the typical internal controls
that a growing business requires discussing the benefits and risks
associated with computerized accounting and
the continuing importance that accounting principles
play in the recording of financial information.
We've seen in earlier sessions how a manual bookkeeping system
includes methods to minimize the risk of misstatements and errors.
Session 3 introduced the idea of the trial balance as a way
to check the arithmetical accuracy of the double entry process.
In Session 8, we saw how a manual inventory records system would be
checked for accuracy by undertaking periodic stock counts to confirm quantities.
Session 9 outlined how control accounts summarize the numerous entries made from
the sales and purchase day books into
the sales and purchase ledgers and that as an arithmetic check on totals.
Despite these existing controls in a manual system,
errors may still exist and even if any business these days can
afford a PC to help with the more mundane aspects of processing accounting transactions,
the use of computers will never guarantee that the accounting records are error free.
Before we look into how computers can assist in the preparation of accounts,
let's first consider the possible errors that could
arise from a manual accounting system and how to correct them.