TPD2140 | General Principles: Control objectives and potential risk areas: Accounting

Accounting

Control objective:

To ensure that the trader’s accounting arrangements are satisfactory.

Potential risk area:

Computers

• Trader’s manual log book (ie his record of malfunctions and other exceptional occurrences)

• Peripheral manual accounting arrangements

• Accuracy and completeness of input data

• Any manual gap between computer output and the duty computation

• The deliberate or accidental inclusion of programs which can conceal amendments to files, databases, accounting routines, etc

• Inadequate physical security or password protection allowing unauthorised access to files via terminals

• Computer system controlling production isolated from the sales system

• Non-standard transactions

• Transactions processed late or out of normal sequence, particularly at times of tax rate changes; and

• Source data which may be deliberately corrupted or miscoded to ensure rejection and facilitate suppression from the computer system

• Duty on goods delivered during systems failures not being accounted for

• Failure to input the correct data on resumption of computer operations

• Loss of TPD data and no adequate backup