and Maintenance of Accounting Manuals: A Blueprint for Running
an Effective and Efficient Department (4th edition)
Steven M. Bragg and Harry L. Brown
Published by John Wiley & Sons, Inc.;
ISBN 0-471-41559-6; $170; 493 pages (hardcover); 2006 cumulative
supplement ISBN 0-471-72895-0; 178 pages (softcover) $75
Reviewed by Allan M. Rabinowitz
2006 - The two fundamental elements of internal control
in any organization—written policies and procedures—form
the essence of this two-part publication, reinforcing the
critical need for adequate documentation in any well-functioning
one considers the many shortcomings of allowing policies
and procedures to be communicated orally, the value of this
guide is evident. People too often lack the ability, time,
inclination, or occasion to clearly and effectively communicate
to others what must be done or avoided. The more dynamic
an entity or its operating environment, the more substantial
the risk of inadequate current documentation.
book is an excellent resource for creating or upgrading
manuals, particularly for small and midsized entities and
the advisors who serve them. Easy to read and understand,
it offers many practical examples. The supplement contains
many control procedures vital to corporations, along with
new or revised procedures. The book devotes separate sections
to the development, implementation, and maintenance of nine
accounting manuals. The first two are considered most essential.
accounting manual. This section describes
the accounting system, a chart of accounts numbering and
descriptions, commonly used accounting terms and definitions,
position descriptions that indicate individuals’ responsibilities,
annual and monthly activity calendars, policy listings,
and policy/procedure statements for transaction process
procedures. This section discusses cost-effective
presentation of commonly used procedures in a clear and
readable fashion, elements of their physical appearance,
identifying or retrieving numbers, proper use and design
of flowcharts, suggested procedures and their indexing,
and layouts and formats for procedures and flowcharts.
manual. This section presents the means whereby
accurate financial statements can be expeditiously generated
by tightly controlled and continually improved procedures.
It details month-end and year-end due dates and responsibilities
by position and closing-task descriptions. Tasks are also
shown in flowchart format by position.
manual. This section stresses good management
planning by showing how budgets for all areas in an entity
are linked together, how sample budgeting formats for numerous
organizational areas interact with pertinent statistical
measures, how flexible expense budgeting can best be used,
how the budgeting process can be streamlined or modified
to enhance the speed of its construction or updating, and
how budgets can be used for control purposes.
accounting manual. The authors think that
this is generally the area of weakest documentation. It
includes a variety of recordkeeping forms and accompanying
instructions on how to track project costs for land, land
improvements, buildings, and factory and office equipment.
The book provides forms and instructions for vehicles, leasehold
improvements, and leases.
manual. Creation of this manual can best begin
by preparing a form survey worksheet (an example of which
is provided) for each form initiated or processed by the
accounting department. The authors offer guidelines for
creating forms as well as for creating this manual.
manual. This manual reviews a number of documents
dealing with transactions having accounting implications,
such as expense reports, petty cash vouchers, and supplies
requisitions. Formulation of this manual, or series of manuals,
depends on the nature of the entity, the number of different
forms in use, and the manual’s intended distribution.
The authors include policy/procedure statements for the
proper completion of sample forms.
technology (IT) manual. The authors included
this chapter because the IT function often reports to a
financial executive. They outline steps to be taken to ensure
a successful system-development process and present a policy/procedure
statement to this effect. System survey forms are shown
for studying current data-processing installations and practices
before coming to replacement, updating, or consolidation
decisions. Policy/procedure statements are also included
for managing development projects and common computer-related
samples of output report description forms are given, containing,
in part, their frequency, distribution, retention, disposition,
and purpose. A computer-reports questionnaire form is displayed
for asking output recipients for detailed remarks about
whether the output continues to be useful. The authors also
stress the need for a disaster recovery manual. They also
outline this manual’s components and its periodic
testing for continuing validity.
resources manual. Close ties between the human
resources and accounting departments are responsible for
the inclusion of this manual. Twenty-eight policy/procedure
statements relating to employment, payroll and budget, fringe
benefits, grievances, drugs, disabilities, jury duty, and
elections are included, as are 11 statements on human resources
chapter covers maintaining these manuals for additions,
deletions, and changes, as well as who bears the responsibility
for maintaining the manuals. The book also considers maintenance
instructions, the use of manual binders, creating and storing
master manual copies, determining who should receive manuals
and how distribution should occur, retrieving manuals, and
the benefits and disadvantages of electronic manuals.
M. Rabinowitz , MBA, CPA, is a professor of accounting
at the Lubin School of Business, Pace University, N.Y., and
former president of the Scribner Book Companies.