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The rules and guidelines for internal accounting records that are used by an organization’s accounting personnel are found in the Accounting Manual. It includes a number of directions and guidance, for example the accounting method, the bookkeeping method, the timeline for recording, the requirement and technique for maintaining relevant documentation, the method for maintaining a chart of accounts, the method for resolving unusual items, the method for tracking and authorization accounting records. It is a full collection of guidelines and descriptions for preserving and keeping financial records as well as regulations that are expected to be followed by accounting team and other departments within the business that are relevant to accounting. It is determined internally by senior staff of the business or with the assistance of hired consultants who are knowledgeable in this area by adhering to accounting standards and using the appropriate tools. The size of the accounting handbook and the information it contains are both subject to change based on the kind and scope of the company. An accounting manual provides an organization with the assistance it needs to adhere to the generally accepted accounting standards and to maintain compliance with regard to the recording of accounting transactions and the reporting of those transactions to the appropriate authorities in the most expedient manner possible for the organization’s benefit.
A chart of accounts is specified in an accounting manual, and accounting team members are expected to use this chart while keeping records of accounting transactions and when preparing reports. When preparing group accounts for same businesses of groups on the performance and situation of various companies of groups and comparing the result and ration, it is extremely necessary to preserve the same chart of accounts and techniques of accounting for each company in the group. It is highly vital for a multinational company to keep an accounting manual in order to coordinate and collaborate accounting practices of the parent company and its subsidiaries’ accounting standards. These practices must follow the unique accounting standard of the country in which the company perform its business activities in order to maintain statutory compliances. For an instance, an American firm will use Generally Accepted Accounting Principles (GAAP) as its method of accounting, whereas a Bangladeshi company would use International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as their methods of statutory accounting. If an American multinational corporation has a subsidiary in Bangladesh and that subsidiary has followed a different method of accounting practices, then the American multinational corporation needs to coordinate and work collaboratively with both accounting practices in order to obtain the best comprehension possible and to evaluate the outcomes of both the individual companies and the group as a whole. In this scenario, a manual for accounting provides particular guidelines and standards for the coordination and collaboration of two accounting practices.
When it comes to the inventory recording process, for example, a single business has the option of adhering to either the FIFO, LIFO, or average cost accounting technique. This is because some accounting standards authorize the use of several approaches when it comes to the maintenance of accounting records. During the process of recording property, plants, and equipment, a business has the option of calculating depreciation from the commencement of the asset’s use or performing complete depreciation in the first year and skipping the calculation for the last year. Depreciation may be calculated using a variety of methods, including the reducing balance technique, the straight line approach, the double declining method, and others. Accounting policies also allow for the use of many techniques for presenting investments, for instance the fair value approach and the initial cost method, depending on the kind of investment being represented. In the same manner, some standards allow for a variety of ways to be used, but the entity must adhere to a certain method in order to maintain consistency and comply with the standard. For the purpose of preserving a sense of consistency within the group’s finances, each company in the group need to adhere to a particular procedure. If a corporation or its groups use diverse procedures for no apparent reason, the company or groups will produce varying outcomes, which will make it difficult to evaluate its performance. A accounting manual provides detailed instructions on how to use a certain accounting system. These instructions should be adhered to by each individual firm during the course of a given time frame, as well as by the group as a whole, for the reasons of continuity and consistency. There are times when changing methods is necessary for reasons that are special or related to compliance, and the accounting manual will lead the changing process as well as the coordination process.
An accounting manual will also include the time span with reference to the time of recording a transaction. For example, a transaction may be documented following authorizing transaction process or upon obtaining informal information or supportive documentation. An accounting manual will also give guidelines for retaining and storing supporting documents, such as which paperwork and authorisation processes are necessary as supporting documents to correspond to a transaction. These guidelines are intended to make it easier to preserve accurate records. This manual also directs the approval and authorization procedure, as well as the individuals involved, based on the size of the transaction and the kind of business being conducted. The accounting manual will give guidelines for addressing anomalous transactions, should they occur on a periodic basis. Additionally, the accounting manual will include guidelines for the pattern of communication with an independent consultant.
The Accounting Manual also provides a framework and a time line for statutory reporting for the purpose of maintaining compliances with regulatory bodies and groups. For example, various regulatory authorities demand specific pattern accounting reports for individual companies and for the group as a whole. These reports include things like quarterly unaudited reports, half-yearly reports, statutory audit reports, FDI returns, quarterly returns, and so on. The accounting team may benefit from having access to a manual that provides guidance on how to comply with various deadlines and requirements.
In the fields of accounting and financial service consultancy, ABC is a company that has a strong reputation and years of expertise. In consideration of local and international accounting standards, ABC is capable of designing and preparing a contemporary accounting manual that meets the requirements of local and multinational businesses. These businesses need to remain up to date and compliant with the requirements of local and international regularity bodies. ABC also trains its
accounting personnel on the proper manner of following the accounting manual and ensuring compliance, in addition to providing guidelines for doing so.