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