Accountants are concerned with internal controls. A commonly used definition reads:
Internal control is broadly defined as a process, effected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: a) Effectiveness and efficiency of operations; b) Reliability of financial reporting; and c) Compliance with laws and regulations. (Wikipedia 3/31/11)
What this means is that company management needs a combination of process that monitor operations to make sure they are being done the right way. If not, then steps can be taken to tighten everything up. It ranges from managerial policies for employees, to protecting assets such as cash, to making sure that the data in reports are accurate.
Fordham directed me to this CBS video on a problem with photocopiers. It turn out that most copiers manufactured since 2002 have a hard drive which preserves a copy of every document that has been scanned for printing or faxing. Every document! When copiers are inevitably replaced by newer models, the hard drive leaves the company ready to divulge its secrets to anyone capable of accessing the hard drive.
In the following video, four copiers were purchased from the used copier market. Two came from a metro police department (sex crimes unit and narcotics investigations unit), one from a construction company, and one came from a health insurance company. All had copious amounts of privileged information to divulge.
Of course this has ramifications for accountants and auditors. Many CPA firms have gone paperless. They scan documents and retain the electronic images. It turns out the images are retained twice. Once in their intended storage place, and once on the copier/scanner hard drive. If the hard drives are not cleansed, then confidential information can be leaving the firm. Note to self, erase copier hard drive at work.
Of course,there is another problem, as revealed in this second YouTube video:
Debit and credit – – David Albrecht