Question

. What do you understand by Quality Control Standards & Practices within the Accounting Profession?

Answer 1

Quality control focuses on developing and maintaining a service or product that is economical, useful and satisfactory to the customer. Quality involves the entire business process and every employee. Accounting functions are integrally linked to every aspect of business activity. Quality control in every part of the business must be supported by the corresponding level of quality control in accounting.

Accounting practices can have a long-term impact on the success and even survival of a business. Inefficiencies and inaccuracies can destroy value. Managers often consume hours of time reviewing reams of paper that, in the end, do not capture the essentials of costs, expenses and trends. This blocks effective process improvement and quality decision making necessary for optimal performance in their business functions. The management model applied to business’ accounting functions is often focused on explaining variances instead of understanding the financial integrity of the business, forecasting future results and making changes based on quality improvement of the service or product for the customer or end user.

Other quality issues associated with business accounting include poor organization of data, tardiness in receipt or review of financial data, sporadic reporting and assessment of key indicators, erratic allocation methods, and non-standardization of allocations.

Failure to understand the functions behind the spreadsheets can further impact your revenues as that lack of understanding begins to make itself known to your external customers and vendors. The accounting department needs to be aware of policies, procedures and standards required for your industry, corporate structure and customer base. Management needs to monitor compliance with quality standards to ensure that vendor payments and contract terms will be executed, payroll administration and withholdings are managed, adjustments against income are made, and record keeping is adequate. This list is not all-inclusive, and each industry and business will have variables. Reaching and maintaining a balance between your business and customer needs while promoting adherence to legal and regulatory entities is necessary to ensure the growth and maturity of the business.