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Ch. 2

The Role of Accounting Preservation of assets. Restrictive trade practices. Standards of conduct. Use of company assets.

In summary, the accounting staff has a large role in enforcing ethical standards throughout a company, since it has such a strong influence over several key areas that require ethical judgments, such as the quality of reported earnings, control over assets, and the use of cash. Accordingly, it is very much in the controllers interest to have a code of ethics that the accounting staff can adhere to in enforcing the appropriate ethical standards.


As an accounting department expands, the number of tasks assigned to each position will become more specialized. A larger organization may have specialists in fixed asset accounting, expense reports, or SEC reportingand these people do nothing else. This section does not attempt to describe the job descriptions of these smaller niche positions, but instead provides an overview of the tasks and reporting relationships that one is likely to encounter in an accounting department of moderate size. These descriptions are noted in Exhibits 2-1 through 2-7. These exhibits assume that there is a separate treasurer role that will take cash management functions away from the controller, as well as a CFO who handles the risk management, pension administration, investor relations, and debt/equity planning tasks. Also, the assistant controller job description in Exhibit 2-2 is split into three parts, reflecting the common separation of duties within the department, with one assistant controller being in charge of basic transactions, another of analysis tasks, and a third of financial reporting. These functions may be combined in smaller organizations if there are fewer assistant controllers.
Exhibit 2-1 Reports to: Responsibilities: Controller Job Description Chief Financial Officer Approve the accounting department budget. Approve the creation of new report formats and reporting systems. Assist in the annual audit as required. Attend executive committee meetings as required. Authorize accounting capital purchases. Discuss financial results with senior management. Implement auditor recommendations. Manage outsourced functions. Manage the accounting staff. Provide advice to management regarding the impact of acquisitions.

2 Some of the line items within the following job descriptions are taken from page 18 of Controllership, 6th Edition (John Wiley & Sons, 2000) with permission.

2-4 Accounting Job Descriptions

Exhibit 2-2 Reports to: Responsibilities: (Analysis) Assistant Controller Job Description Controller Compile the cash forecast. Initiate best practices improvements. Issue internal management reports as needed. Manage the annual budgeting process. Oversee outsourced functions. Provide financial analyses as needed. Review systems for control weaknesses. Supervise cost accounting staff. Supervise financial analysis staff. Supervise systems analysis staff. Initiate best practices improvements. Issue timely financial statements. Oversee outsourced functions. Review capital purchase proposals. Supervise general ledger staff. Supervise public reporting staff. Supervise tax reporting staff. Initiate best practices improvements. Maintain an orderly accounting filing system. Oversee outsourced functions. Supervise accounts payable staff. Supervise accounts receivable staff. Supervise payroll staff.


Responsibilities: (Financial Reporting)

Responsibilities: (Transactions)

Exhibit 2-3 Reports to: Systems tasks:

Cost Accountant Job Description Assistant Controller (Analysis) Audit costing systems. Review adequacy of activity-based costing system. Review adequacy of data collection systems. Review system costs and benefits. Assist in development of the budget. Report on ABC overhead allocations. Report on breakeven points by product and division. Report on capital budgeting requests. Report on margins by product and division. Report on periodic variance analyses. Report on product target costing. Report on special topics as assigned. Work with marketing staff to update product pricing.

Analysis & reporting tasks:

Pricing tasks:

Reprinted with permission from Bragg Cost Accounting (John Wiley & Sons, 2000), p. 24.


Ch. 2

The Role of Accounting

Billings and Collections Supervisor Job Description Assistant Controller (Transactions) Approve invoice write-offs. Ensure that accounts receivable are collected promptly. Ensure that customer billings are issued promptly. Estimate the bad debt reserve. Implement best practices to increase efficiency levels. Manage the billings and collections staff. Project cash requirements from cash receipts.

Exhibit 2-4 Reports to:


Exhibit 2-5 Reports to:

Accounts Payable Supervisor Job Description Assistant Controller (Transactions) Cross-train the accounts payable staff. Ensure that accounts payable are not paid early. Ensure that all reasonable discounts are taken on payments. Handle supplier payment inquiries. Implement best practices to increase efficiency levels. Manage the accounts payable staff. Project cash requirements from accounts payable.


Exhibit 2-6 Reports to:

Payroll Supervisor Job Description Assistant Controller (Transactions) Convert time cards into payroll system entries. Create vacation and pay accruals for the periodic financials. Cross-train the payroll clerical staff. Implement best practices to increase efficiency levels. Manage the payroll clerical staff. Monitor vacation and sick time taken and available. Process payroll in a timely manner. Process termination pay within mandated time periods. Update pay changes in a timely manner.


Exhibit 2-7 Reports to:

General Ledger Accountant Job Description Assistant Controller (Financial Reporting) Consolidate entries from subsidiary organizations. Ensure that monthly bank reconciliations are completed. Follow the period-end closing schedule in a timely manner. Maintain a standard checklist of period journal entries. Maintain detailed backup on all account balances. Maintain the chart of accounts.