As many auditors know, the flexibility and ease of use that makes Quickbooks popular among small businesses is also a source of risk. Quickbooks entries can be manipulated or deleted by employees who are trying to conceal or cover-up a fraud. In response to this, Intuit, the developers of Quickbooks, have built-in various features over the years to try and provide accountants and auditors with tools to mitigate these risks. Here are some of the functions and reports that auditors and managers in the organization should use to maintain control over the books.
- Audit Trail Report - The audit trail report is probably one of the lesser known/used reports in the Quickbook arsenal but is essential for proper monitoring control. The audit trail report lists any accounting transactions during the selected date range for which any additions, deletions or modifications have been made. This one report when monitored by management or the auditor can identify any instances where transactions have been posted and subsequently deleted or modified overcoming one of the most significant risk factors in using Quickbooks. Access this under Reports >> Accountant and Taxes >> Audit Trail
- Missing Check Report - Although this report is called the "missing check report," it can be setup to list checks in a bank account, invoices in a receivables account, or payments in a current asset account. The report points out missing and duplicate transaction numbers within the account for the selected date range providing a simple way to identify gaps in a prenumbered sequence or duplicate payments. Access this under Reports >> Banking >> Missing Checks
- Bank Reconciliation Function - Most Quickbooks users are familiar with the built-in bank reconciliation module, however it never ceases to amaze me when I come across organizations who either don't make use of the module or fail to clear stale items from the reconciliation. If the unreconciled items are allowed to accumulate or the reconciliations are forced, the controls provided by the reconciliation will be ineffective. The bank reconciliation report provides a listed of all unreconciled items which management and auditors should review monthly. Any unreconciled items that have not been cleared since the previous reconciliation should be investigated. Access this under Banking >> Reconcile
- User Access Privileges - User access privileges is one area of Quickbooks that stems quite a bit of uncertainty and misunderstanding. Many organizations believe they need a mult-user license to take advantage of the user access privileges functions. This is not the case, user access privileges can be established in a single user environment allowing multiple users controlled access to Quickbooks so long as only one user is accessing the file at a time. This is a tremendously valuable for smaller organizations where establishing user access privileges can provide for segregation of duties that would not otherwise be achievable with limited staff resources. Access this under Company >> Set up Users and Passwords >> Set up Users
- Vendor List Review - The Vendor list shows information about the people or companies from whom you buy goods and services, including banks and tax agencies. Management should review this list on a monthly basis to ensure that fictitious vendors have not been added. Access this under Vendor Center >> Print >> Vendor List
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