TL;DR
Accounting logs record financial transactions. Auditing checks if those records are correct and follow rules. Accountability means knowing *who* did what in the system. They’re related but different – auditing finds errors, accountability prevents them (and helps fix issues when they happen).
1. What Are Accounting Logs?
Accounting logs are a detailed history of all financial events within your business. Think of them as a digital trail for every penny in and out. They include:
- Transaction Date & Time: When the event happened.
- User ID: Who made the change (crucial for accountability).
- Transaction Type: Sale, purchase, refund, payment etc.
- Account Affected: Which account in your chart of accounts was changed.
- Amount: The value of the transaction.
- Description/Reference Number: Details about the transaction (invoice number, customer ID).
These logs are often stored in databases or specific accounting software files.
2. Accounting Audits: Checking for Accuracy
- What is an Audit? An audit is a systematic review of your financial records to verify their accuracy and compliance with regulations (like tax laws).
- Types of Audits:
- Internal Audit: Done by people *within* your company. Focuses on improving processes and finding internal controls weaknesses.
- External Audit: Done by an independent firm. Provides an unbiased opinion on your financial statements for stakeholders (investors, banks).
- Audit Process:
- Planning: Defining the scope and objectives of the audit.
- Testing: Examining transactions, documents, and controls. This might involve sampling (checking a portion of records) or full reviews.
- Reporting: Documenting findings and recommendations.
- Example Audit Check: Verifying that all sales invoices have corresponding entries in the general ledger.
SELECT invoice_number, total_amount FROM sales WHERE date BETWEEN '2023-01-01' AND '2023-12-31';
3. Accounting Accountability: Knowing Who Did What
- What is Accountability? This means having a clear record of which user performed each action in the accounting system. It’s about responsibility and preventing fraud or errors.
- How to Implement Accountability:
- User Accounts: Every employee should have their own unique login. Never share accounts!
- Access Controls: Limit what each user can see and do based on their role (e.g., a sales person shouldn’t be able to change chart of account settings).
- Audit Trails: Detailed logs that track every action taken by each user, including timestamps.
SELECT username, date, action FROM audit_log WHERE table_name = 'sales'; - Two-Factor Authentication (2FA): Adds an extra layer of security to logins.
- Example Accountability Check: Identifying who deleted a vendor record.
SELECT username, date FROM audit_log WHERE table_name = 'vendors' AND action = 'delete';
4. Key Differences Summarised
| Feature | Accounting Audit | Accounting Accountability |
|---|---|---|
| Purpose | Verify accuracy & compliance | Track user actions & responsibility |
| Focus | Financial records themselves | Users and their activities |
| Timing | Periodic (e.g., annually) | Continuous, ongoing |
| Outcome | Audit report with findings | Detailed audit trails for investigation |
5. Why Both Are Important
Audits and accountability work best together.
- Accountability helps prevent errors that audits find. Strong access controls reduce the risk of mistakes or fraud in the first place.
- Audits rely on good accountability data. If you don’t know who made a change, it’s hard to investigate discrepancies.