CAT / FIA FBT Syllabus C. Accounting And Reporting Systems, Controls - Controls & Procedure in Business & IT Systems - Notes ^{6 / 7}

Management must have control over the following areas:

• Sales on credit made to new customers 

  – if a sale is made on credit the goods are sent out with a promise from the customer to pay in the future therefore the management of the business must be as certain as they can be that this new customer can, and will, pay for the goods which means that the credit controller must be happy that the new customer has a good credit rating and is fairly certain to pay for the goods

• Purchases of goods or non-current assets and payments for expenses

  – this is money going out of the business therefore it is essential that these are necessary and valid expenditures so a responsible official must authorize them

• Payroll 

  – one of the largest payments made by most organizations is that of the wages bill for their employees.  

  It is essential that only bona fide employees are paid for the actual hours that they have worked therefore authorization of the payroll is a very important part of any business