1. History of Accounting

2. The German banker Jakob Fugger and his principal accountant, M. Schwarz, registering an entry to a ledger. (1517) The background shows a file cabinet indicating the European cities where the Fugger Banker conducts business. From the biography of M. Schwarz; Herzog-Anton-Ulrich-Museum, Braunschweig, Germany

7. Luca Pacioli

8. =

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10. = RevenueExpense

11. BUSINESS ACTIVITY DEBIT ENTRY CREDIT ENTRY DEBITS = CREDITS Mistake

12. BUSINESS ACTIVITY DEBIT ENTRY CREDIT ENTRY DEBITS = CREDITS

13. Checks and Balances

14. BUSINESS ACTIVITY

17. Checks and Balances BUSINESS ACTIVITY

18. Checks and Balances BUSINESS ACTIVITY

19. Segregation of Duties

20. Segregate Authorization from Execution Segregate Custody from Recordkeeping

21. CustomerSales Rep Negotiates Sale Obtain and enter Sales Order

22. Sales Manager Customer Yes No Sets Selling Prices Price List Credit Application Credit Manager Credit Check Credit Approved? Sets up Customer Credit Application Credit Application Cust Master File Outside Credit Sources Product Master File Sales Rep

23. Sales Manager Sets Selling Prices Price List Customer Credit Application Credit Manager Credit Check Credit Approved? Yes No Credit Application Sets up Customer Credit Application Customer Master File Outside Credit Sources Product Master File

24. No Sales Manager Sets Selling Prices Price List CustomerSales Rep Negotiates Sale Standard Price? Yes Obtain and enter Sales Order Customer Master File Sales Mgr Approval? Yes No Product Master File Credit Limit ? Credit Manager

25. No Sales Manager Sets Selling Prices Price List CustomerSales Rep Negotiates Sale Standard Price? Yes Obtain and enter Sales Order Customer Master File Sales Mgr Approval? Yes No Product Master File Credit Limit ? Credit Manager

26. No Sales Manager Sets Selling Prices Price List CustomerSales Rep Negotiates Sale Standard Price? Yes Obtain and enter Sales Order Customer Master File Sales Mgr Approval? Yes No Product Master File Credit Limit ? Credit Manager

27. No Sales Manager Sets Selling Prices Price List CustomerSales Rep Negotiates Sale Standard Price? Yes Obtain and enter Sales Order Customer Master File Sales Mgr Approval? Yes No Product Master File Order Acknowledgement Credit Limit ? Open Sales Orders

28. Internal Controls Segregation of Authorization from Execution Independent Verification

29. No Sales Manager Sets Selling Prices Price List CustomerSales Rep Negotiates Sale Standard Price? Yes Obtain and enter Sales Order Customer Master File Sales Mgr Approval? Yes No Product Master File Order Acknowledgement Credit Limit ? Credit Manager Open Sales Orders

30. Open Sales Orders Warehouse Print Picking Tickets Picking Ticket (2 copies) Pick, Pack Mdse Picking Ticket (2 copies) Shipping Enter Shipping Data Open Sales Orders

31. Internal Controls Segregation of Authorization from Execution Independent Verification Segregation of Custody from Recordkeeping

32. CofGS Bill of Lading (1 copy) Picking Ticket (2 copies) Shipping Enter Shipping Data Open Sales Orders Picking Ticket (1 copy) Carrier’s Driver Signed Copy Bill of Lading Picking Ticket (1 copy) Billing Print Invoices Invoice Customer Sales Summary Sales Manager A/R File Sales Inventory

49. Internal Controls Segregation of Authorization from Execution Independent Verification Segregation of Custody from Recordkeeping Use of Documents Serial Numbering of Documents Use of Logs and Checklists Use of Technology (computers)

50. Requisitioner Manager VP Purchasing Vendor Receiving A/P Bank Reconciliation Bank

51. Requisitioner Manager VP Purchasing Vendor Receiving A/P Bank Reconciliation Bank

52. Requisitioner Manager VP Purchasing Vendor Receiving A/P Bank Reconciliation Bank

53. Requisitioner Manager VP Purchasing Vendor Receiving A/P Bank Reconciliation Bank

54. Requisitioner Manager VP Purchasing Vendor Receiving A/P Bank Reconciliation Bank

55. Requisitioner Manager VP Purchasing Vendor Receiving A/P Bank Reconciliation Bank

56. Requisitioner Manager VP Purchasing Vendor Receiving A/P Bank Reconciliation Bank

57. Requisitioner Manager VP Purchasing Vendor Receiving A/P Bank Reconciliation Bank

58. Requisitioner Manager VP Purchasing Vendor Receiving A/P Bank Reconciliation Bank

59. Requisitioner Manager VP Purchasing Vendor Receiving A/P Bank Reconciliation Bank

60. Requisitioner Manager VP Purchasing Vendor Receiving A/P Bank Reconciliation Bank X

61. Requisitioner Manager VP Purchasing Vendor Receiving A/P Bank Reconciliation Bank

62. Ta pe s

66. Weekly Payroll Hiring Process

80. Internal Controls Prevent Detect Correct

82. Segregate Duties Custody from Recordkeeping Authorization from Execution

83. Segregate Duties Custody from Recordkeeping Authorization from Custody Authorization from Recordkeeping Initiation from Conclusion Inbound from Outbound Debit from Credit

84. Checks and Balances BUSINESS ACTIVITY Authorization from Execution Recordkeeping from Custody Initiation from Conclusion Inbound from Outbound Debits from Credits