In a POS system, where both inventory and cash are at risk, supervision is particularly important.
Customers have direct access to inventory in the POS system, and the crime of shoplifting is of
great concern to management.
Surveillance cameras and shop floor security personnel can reduce the risk.
These techniques are also used to observe sales clerks handling cash receipts from customers. In
addition, the cash register’s internal tape is a form of supervision.
The tape contains a record of all sales transactions processed at the register. Only the clerk’s
supervisor should have access to the tape, which is used at the end of the shift to balance the cash
drawer.
Access Control
In computerized systems, digital accounting records are vulnerable to unauthorized and
undetected access.
This may take the form of an attempt at fraud, an act of malice by a disgruntled employee, or an
honest accident.
Additional exposures exist in real-time systems, which often maintain accounting records entirely
in digital form.
Without physical source documents for backup, the destruction of computer files can leave a firm
with inadequate accounting records.
To preserve the integrity of accounting records, Sarbanes-Oxley legislation requires organization
management to implement controls that restrict unauthorized access.
Also at risk are the computer programs that make programmed decisions, manipulate accounting
records, and permit access to assets.
In the absence of proper access controls over programs, a firm can suffer devastating losses from
fraud and errors. Thus, current laws require management to implement such controls.
Because POS systems involve cash transactions, the organization must restrict access to cash
assets.
One method is to assign each sales clerk to a separate cash register for an entire shift. When the
clerk leaves the register to take a break, the cash drawer should be locked to prevent unauthorized
access.
This can be accomplished with a physical lock and key or by password.
At the end of the clerk’s shift, he or she should remove the cash drawer and immediately deposit
the funds in the cash room.
When clerks need to share registers, responsibility for asset custody is split among them and
accountability is reduced.
Inventory in the POS system must also be protected from unauthorized access and theft. Both
physical restraints and electronic devices are used to achieve this.
For example, steel cables are often used in clothing stores to secure expensive leather coats to the
clothing rack. Locked showcases are used to display jewelry and costly electronic equipment.
Magnetic tags are attached to merchandise, which will sound an alarm when removed from the
store.
Accounting Records
DIGITAL JOURNALS AND LEDGERS.
Digital journals and master files are the basis for financial reporting and many internal decisions.
Accountants should be skeptical about accepting, on face value, the accuracy of computer-
produced hard-copy printouts of digital records.
The reliability of hard-copy documents for auditing rests directly on the quality of the controls that
protect them from unauthorized manipulation.
The accountant should, therefore, be concerned about the quality of controls over the programs
that update, manipulate, and produce reports from these files.