ACCA BT Syllabus C. Business Functions, Regulation and Technology - Objectives & Policies - Notes 1 / 4
AN ORGANISATION’S SYSTEM REQUIREMENTS IN RELATION TO THE OBJECTIVES AND POLICIES OF THE ORGANISATION
Accounting systems lay down procedures and guidelines that reflect the Company’s policies.
| term | meaning |
| system | a group of independent but interrelated elements comprising a unified whole, a process for obtaining an objective |
| policy | a guiding principle |
| procedure | a series of acts, a set sequence of steps |
| guideline | a recommended approach for conducting a task |
In an organisation there are many transactions and roles therefore, an organisation may opt to implement more formal rules and procedures policy to ensure the management are able to keep control of the activities.
For example, having in place an “authorisation policy” for the purchase of accepting new customers, new suppliers etc.
In a smaller organisation, such procedures and rules can be communicated orally by the management, however in a larger organisation this might not be impossible therefore a more formal procedure may be needed.
This could be in the shape of a policy manual.
Effective systems and procedures should ensure that:
Relationships with customers are effectively managed
Relationships with suppliers are effectively managed
Office functions interrelate properly and are not duplicate