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Gloria Braunschweig, Computeration

Dynamics GP Audit Controls versus QuickBooks Audit Trails


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BQB (Before QuickBooks) I encountered fraud about once a year: financial reports edited with white-out, payables checks pre-signed by busy owners, and cash that never was recorded in the accounting system.

Now the certified fraud examiners have to request bank statements and check copies to look at alterations of payments that appear in the accounting system as valid payments against vendor invoices when they were actually re-directed to bookkeepers and their friends. The fraud is being committed inside the entry-level systems that provide audit trails but not audit controls.

QuickBooks has an easy-to-read activity log. Following is a screen capture from their site. This looks nice until your company has 30,000 of these entries to review every month.

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The Difference Between Audit Trails and Audit Controls

Audit Trails in a financial system are generally regarded as the links that hold transactions together. A sales order is converted into a sales invoice; they both share the same sales document master number in Dynamics GP. The sales invoice is posted to become a Receivables Transaction with a source code and document number that link it back to the sales document. A quantity decrease transaction is entered in the Inventory with a cost associated to it and the General Ledger bucket holds all the distributions.

Eventually a check is applied against the invoice resulting in a Bank transaction and more general ledger distributions. The Audit Trail holds all those transactions together enabling cross-referencing, application of cash, clearing of the open Receivables transaction to history, and drilldown from general ledger accounts back to the sales invoice.

QuickBooks provides the same process, a little simpler, but then it stops. If your best customer sends in a check that originally pays invoices on their account, there’s nothing stopping your bookkeeper from later re-applying that check to invoices on his account.

Once cash is posted in Dynamics GP, it stays posted where it was originally applied. Security setup allows you to better segregate duties. The same accountant that sends out the bills may be prevented from entering payments. Once Payables vouchers are paid, they move to history. Security controls assigned to different users with different roles can prevent the accountant who printed checks from later voiding those checks.

 

Audit Trails Tell You What Happened. Audit Controls Prevent Things from Happening

Security setup that I explained in the article Security Setup in Dynamics GP Compared to QuickBooks takes users of Dynamics GP to a better level of control, security, and audit. Activity Tracking is easy to setup in Dynamics GP because you can define specific areas to monitor. Security setup allows you to predefine roles for system users to enable segregation of duties.

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Dynamics GP has a tool that allows you to review security setup in an easy-to-follow format so you can quickly spot that you perhaps haven’t segregated duties as you intended.

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Risk Management

As a business owner, you can define SQL-based Business Alerts to know when your checking account drops to a designated level or reaches a new high.

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In addition, a module can be added to Dynamics GP that enables extensive setup of specific conditions to be monitored with email reporting. An email alert can tell you that with no effort or worry on your part. You may want to monitor new accounting employees for a probationary period of time without their being aware of that fact. Easy to do with Dynamics GP Risk Management!

 

Supporting Dynamics GP from Portland, Oregon

One of the reasons I chose to support Great Plains Accounting in 1989 and eventually Dynamics GP was because of the extensive audit trails and controls. We support Idaho as the Dynamics GP ERPSoftwareBlog reseller  from our offices in Portland, Oregon. We have clients from Alaska to Guatamala. Contact Gloria@computeration.com or visit us at computeration.com if you’ve outgrown QuickBooks and want more peace of mind from your business management system.

by Computeration

 

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