[Shan]

Hi Every one,

Today I overheard a conflict in the office. The manager from budget team was yelling at a GL accountant because she didn’t accrue about 100K USD expense in November.

The manager said” I gave you my forecasting number for this event so you should use it for your accrual. This event happened in October”

The GL accountant insisted” But I don’t know if it happened in October. I don’t see any purchase order or company cards payment or any email information said it happened. How can I accrue”

The manager said ” I told you it happened in October! You should find out yourself! You no need invoice or PO for accrual!”

……

Personally, I agree with GL accountant since I don’t think an email with an forecasting number from budget team is sufficient for accrual journal entry, at least we need some supporting that showed this event has happened in Oct …But I am not so sure about my thought…

Any advice??? Thanks!

AUD-73, 73, 73, 79!!
BEC-77!
FAR-60, 83!
REG-66, 72, 75!

MA CPA license

[mla1169]

If a manager tells an accountant that an event happened in October and to find out for himself chances are there's evidence out there to be found. You really don't give enough information for a well thought out answer but you don't necessarily need hard and fast evidence for an accrual except at year end.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[mla1169]

If a manager tells an accountant that an event happened in October and to find out for himself chances are there's evidence out there to be found. You really don't give enough information for a well thought out answer but you don't necessarily need hard and fast evidence for an accrual except at year end.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[Anonymous]

We accrue all the time without hard evidence as long as the request comes from someone with the authority to make that decision. However a GL accountant would never be allowed to make that call for 100K. That manager of the budget department should have discussed the situation with someone higher up the accounting ladder and the orders to accrue or not to accrue should have come from the CFO or Controller to the accountant, not from the budget manager.

[Anonymous]

We accrue all the time without hard evidence as long as the request comes from someone with the authority to make that decision. However a GL accountant would never be allowed to make that call for 100K. That manager of the budget department should have discussed the situation with someone higher up the accounting ladder and the orders to accrue or not to accrue should have come from the CFO or Controller to the accountant, not from the budget manager.

[Shan]

@mla1169–Thank you! I guess here must be some miscommunications between local team and GL team.

The GL accountant told me that actually she contacted the team regarding the event but they didn't give her anything regarding this event. That's why she didn't do any accruals. She also tried to look for TE or company card payment or open purchase order for this event, also nothing… I guess why she is kind of upset…

Well, at least I learned that not necessarily need hard and fast evidence for an accrual except at year end. 🙂

Thank you as always!!

AUD-73, 73, 73, 79!!
BEC-77!
FAR-60, 83!
REG-66, 72, 75!

MA CPA license

[Shan]

@mla1169–Thank you! I guess here must be some miscommunications between local team and GL team.

The GL accountant told me that actually she contacted the team regarding the event but they didn't give her anything regarding this event. That's why she didn't do any accruals. She also tried to look for TE or company card payment or open purchase order for this event, also nothing… I guess why she is kind of upset…

Well, at least I learned that not necessarily need hard and fast evidence for an accrual except at year end. 🙂

Thank you as always!!

AUD-73, 73, 73, 79!!
BEC-77!
FAR-60, 83!
REG-66, 72, 75!

MA CPA license

[Shan]

@CPAMommyof3–Thank you for the answer! Yeah, if the accrual number is from local team who held the event, maybe make more sense or the higher level authorized accounting persons…:)

AUD-73, 73, 73, 79!!
BEC-77!
FAR-60, 83!
REG-66, 72, 75!

MA CPA license

[Shan]

@CPAMommyof3–Thank you for the answer! Yeah, if the accrual number is from local team who held the event, maybe make more sense or the higher level authorized accounting persons…:)

AUD-73, 73, 73, 79!!
BEC-77!
FAR-60, 83!
REG-66, 72, 75!

MA CPA license

[mla1169]

Heres an example on a smaller scale. My employer is being sued by a former employee. lt is very hush hush (well you know, except on A71!). I know all of the details and after speaking with our attorney it seems she is Iikely to win. We have a high deductible insurance policy that will cover her damages but I am absolutely accruing the deductible right now. It is a 2013 event, even though we won't be paying anybody anything this year. There would be no trail that anybody here could find if they weren't privy to the details. Nobody has any need to know why except myself, the company owner and eventually our auditors.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[mla1169]

Heres an example on a smaller scale. My employer is being sued by a former employee. lt is very hush hush (well you know, except on A71!). I know all of the details and after speaking with our attorney it seems she is Iikely to win. We have a high deductible insurance policy that will cover her damages but I am absolutely accruing the deductible right now. It is a 2013 event, even though we won't be paying anybody anything this year. There would be no trail that anybody here could find if they weren't privy to the details. Nobody has any need to know why except myself, the company owner and eventually our auditors.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[Shan]

@mla1169–Thank you for sharing! It sounds like the actual lesson of the chapter in AUD regarding the accrual for legal cases (probably, possible and remote), right? 🙂

Now I think I understand much better regarding the accrual process…:) Thank you!!!

AUD-73, 73, 73, 79!!
BEC-77!
FAR-60, 83!
REG-66, 72, 75!

MA CPA license

[Shan]

@mla1169–Thank you for sharing! It sounds like the actual lesson of the chapter in AUD regarding the accrual for legal cases (probably, possible and remote), right? 🙂

Now I think I understand much better regarding the accrual process…:) Thank you!!!

AUD-73, 73, 73, 79!!
BEC-77!
FAR-60, 83!
REG-66, 72, 75!

MA CPA license

[musicamor]

First of all, I am surprised that the budgeting manager has the capacity to direct the activity of a G/L Accountant. Typically, the G/L Accountant receives direction from his/her superior, i.e., Senior Accountant, Accounting Manager, Assistant Controller, etc. It is atypical for Manager, budgeting to be directing G/L activities.

That said, it is not uncommon to book accruals without hard evidence. You might call this “booking to budget” or accruing an estimate based on a run rate – these are typical. Such estimates need to be supportable and representable.

If I was the G/L Accountant and worked in a “normal” company, I would respectfully tell the Manager, Budgeting to see my Manager (Accounting Manager or otherwise) in order to book the accrual. Not too sure why that person is giving directives that affect the General Ledger.

Texas CPA - licensed in 2012!!!

[musicamor]

First of all, I am surprised that the budgeting manager has the capacity to direct the activity of a G/L Accountant. Typically, the G/L Accountant receives direction from his/her superior, i.e., Senior Accountant, Accounting Manager, Assistant Controller, etc. It is atypical for Manager, budgeting to be directing G/L activities.

That said, it is not uncommon to book accruals without hard evidence. You might call this “booking to budget” or accruing an estimate based on a run rate – these are typical. Such estimates need to be supportable and representable.

If I was the G/L Accountant and worked in a “normal” company, I would respectfully tell the Manager, Budgeting to see my Manager (Accounting Manager or otherwise) in order to book the accrual. Not too sure why that person is giving directives that affect the General Ledger.

Texas CPA - licensed in 2012!!!

[MarathonRunner1]

At this rate, I would not be surprised if this Budget Manager also reviews the bank recs, has custody of cash, and posts to the GL. .Oh, and one more thing…. this Budget Manager reviews the bank account activity for reasonableness.

AUD: 94 (Nov. 2013)
FAR: 76 (Oct. 2013)
BEC: 79 (Nov. 2012)
REG: 84 (Dec. 2013) It's Mile 26.2, and we finished. Blood, sweat and tears, passion, perseverance, and never giving up, we did it!

California Candidate

[Author]

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