Auditing - Mechanized Accounting
In the traditional manual system of accounting, a lot of steps were involved in recording the Accounting transactions. In the present day business scenario a lot of information can be fetched in very less time, without spending a lot of workforce and resources. Therefore, various machines are doing the work of recording and presenting accounting transactions.
Advantages of Mechanized Accounting
- It saves time and cost in recording accounting transactions.
- Machines works very efficiently, hence chances of errors are reduced.
- It enhances speed of work.
- Accounting through machines is neat and legible.
- Without any delay final accounts can be prepared any time.
- Cost of internal control system and Internal Check can be minimized.
- Desired number of copies of any record is easily available.
- Past year's data and record can be reproduced in desired form without any delay.
Disadvantages of Mechanized Accounting
Mechanized Accounting comes with its own set of disadvantages. A few of them have been mentioned below −
- Wrong punching of data at initial stage will produce wrong results.
- Loose cards and sheets maintained under it are not acceptable by court.
- It is very difficult to locate and rectify error in it.
Mechanized Accounting and Auditor
An Auditor should consider the following points while conducting audit of mechanized accounting records −
- He must verify original data punching.
- Scrutiny of internal control system is must.
- He must ensure that actual and authorized accounting transactions shall be recorded.
- He must obtain explanation, if any, required in any entry.
- He requires certificate whether machines are in order and working properly or not.
