- External accounting is directed "outwards"
and is regulated strictly by tradition and law to ensure comparability.
- Principles of double entry bookkeeping
- Profit and loss system
- Period based accounting
- Internal accounting is purely for internal use and
serves to control and manage the organization. It is constructed along the
lines set by management and must be flexible.
The Audit Trail
- Every transaction in the system is represented by a
document
- A document records a business transaction
- Documents are accessible in real time and are stored
centrally
- Data resulting from transactions posted to the system
can be viewed at every level of detail from the original document to the
final report.
- The system provides an audit trail of the reporting
information through the drill down capabilities
General Ledger and its Subledgers
- Transactions that affect financials update the General
Ledger via subledgers that are directly integrated.
- Subledgers reduce the number of General Ledger accounts
shown on the Financial Statement.
- The balances of subledger accounts are automatically
updated in the General Ledger through a Reconciliation Account.
