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accounting function
which 
will then process and pay the invoice when it is received.
QUESTION 
Purchasing function
 
Which of the following personnel in an organisation would not be involved in the purchase of materials?
A Credit 
controller C Accountant 
B 
Stores manager 
D 
Purchasing manager 
ANSWER 
A. The credit controller chases unpaid debts. 
 
5.4 Control over transactions
As you may have noticed in the last section, any transaction that a business is involved in will tend to 
involve a number of different people within the organisation. You will have also noticed the requirement 
for transactions to be authorised.
The management of a reasonably large business cannot have the time to personally be involved in every 
transaction of the business. However, in order to keep control of the sources of income of the business 
and the expenditure that the business incurs, it is important that transactions are authorised by a 
responsible member of the management team.
In particular, this means that management must have control over the following areas. 
(a) 
Sales on credit made to new customers
. If a sale is made on credit the goods are sent out with a 
promise from the customer to pay in the future, therefore the management of the business must 
be as certain as they can be that this new customer can, and will, pay for the goods. This means 
that the credit controller must be happy that the new customer has a good credit rating and is 
fairly certain to pay for the goods. 
(b) 
Purchases of goods or non-current assets and payments for expenses
. This is money going out 
of the business therefore it is essential that these are necessary and valid expenditures so a 
responsible official must authorise them. 
(c) 
Payroll
. One of the largest payments made by most organisations is that of the wages bill for their 
employees. It is essential that only bona fide employees are paid for the actual hours that they 
have worked therefore authorisation of the payroll is a very important part of any business. 
5.5 Financial control procedures 
Financial control procedures exist specifically to ensure that: 

Financial transactions are properly carried out. 

The assets of the business are safeguarded. 

Accurate and timely management information is produced. 
BPP Tutor Toolkit Copy

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CHAPTER 8
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THE ROLE OF ACCOUNTING