One of the things that I've noticed in our Division's Corporate Office is that there is no manual on accounting policies and procedures. When brought up, I was told that it is highly impractical to prepare one and it is not cost-effective. They said that duties and responsibilities keep on changing and reporting requirements from our parent company keeps evolving and expanding. When a principal employee leaves, I was told they have required sufficient notice so that replacements can be adequately trained. (However, should this person be hit by a bus, I will be extremely surprised if he gives ample notice for that!)
I am not surprised if most companies do not have a complete accounting policies and procedures manual but I believe these companies would have it in their "to do" list as a major project, and not completely scrap the idea of creating one. Or perhaps this is no longer the case in the modern world? Would love to hear your thoughts on this.
We don’t have a single “manual” but our Controller has issued formal accounting policies on numerous topics. These include payables, receivables, revenue recognition, capital expenditures, inventory, etc. They are made available on our Intranet. If something changes, he updates the policy. That doesn’t seem hard. We have quarterly meetings with the key accounting people, and he reviews some of the policies at each meeting.
I don’t see how they can argue that replacements are adequately trained unless someone has standards so they know what key responsibilities they should be training for. If duties and responsibilities of key accounting personnel keep on changing, that would seem to have documented policies all the more necessary.
And tell them to look both ways before crossing the street.