Accounting systems should be able to capture the maximum possible relevant data and that data should be assimilated into information that can be used for efficient decision-making.
The concept of EVPI (economic value of perfect information) simply means that the monetary advantage of an ‘informed decision’ over a ‘normal decision’ should be more than the cost of ‘acquiring the additional information’ required for that ‘informed decision’. Quite often EVPI is ignored by personnel leading to duplication of costs and efforts.
An ideal system saves money and managerial effort in the long run.
The auditors of Verico Auditing, on the strength of their acute understanding of the audit trail, advise clients on setting up accounting systems that double up as administration systems as well as accumulators of non-accounting data. This data could be the number of kilometers run by vehicles, hours spent by staff for specific activities, quantitative analysis of inputs and outputs – the possibilities are limitless and the actual instances cannot be mentioned on account of confidentiality.
A common principal followed by Verico Auditing is that shock therapy should be avoided. It takes a little longer to achieve the end result, but implementing a proper system without changing the existing staff of the client and without drastically modifying the existing practices ensures wholehearted participation of the staff and leads to better systems. In a gradual manner, it is explained to the staff how following a different method reduces time and effort and improves the quality of information captured.
More often, resistance is noticed from business managers – and not the accounting staff – in improving accounting systems and practices. This is often the result of the lack of the managers in realising the importance of specific information – the principle of quality over quantity – and such implementation can only be undertaken when this impediment is obviated.
Verico Auditing refrains from suggesting the specific accounting software that should be used or implemented, but is not opposed to the notion of being a part of the management team in objectively selecting one from the available options.
With the same expertise, existing systems are audited and improvements suggested, if necessary.