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Now that we've discussed internal controls and we understand the external procedures such as locking up blank checks, let's talk about the internal procedures within QuickBooks. First know that under the Report Menu, by Accountant you will see the actual Audit Trail. Notice in this section that there are a number of different reports, each of these reports roll into the Audit Trail and are an important aspect of Internal Controls. First let's start with the Customer Credit Card Audit Trail; this will give you a listing of all your credit card transactions for the day. The idea here is to actually see which user has worked with credit card to see how many transactions took place. The concept here is to see if one transaction may have been put in twice, to see if everything looks in order, keep in mind that this particular report is limited to access. You will not be able to save it to your toolbar as there's confidential information that's involved. The idea is to give you a list that you can check with your credit card company to ensure that everything's in order. There are a number of other reports in the Audit Trail that I'd like to go through also. Please note that each of these are in our Reports Menu, I've chosen to put them on our toolbar. Let's start with our voided and deleted transactions. QuickBooks will give us a list of all the transactions that have been changed within the system. Now here I'd like you to keep in mind the difference between a delete and a void. It's a good idea to always request employees to void not delete transactions. When I void a transaction and I double click on this data it will take me to the Customer Detail, you will notice that it clearly states void within the memo line. If I double click on the transaction I can see the transaction, all amounts have been zeroed and again it's marked void. I can trace the history of this particular item, however in the case when an item has been changed via delete, no information exists within the system. If we close out of our secondary report and go back to our Summary Screen, you will note that this is a deleted transaction, deleted transactions do not remain in the system, as a result, always void. The concept behind delete was in case we did a duplicate entry, perhaps I'm doing Accounts Payable, I put in an invoice and then I put it in a second time because of statement. In this case the transaction should have never happened to begin with so I deleted it out. Internal Controls would be better if I always asked everybody to void their transactions. The idea here is that if there's an occasional void, no problem. If however I'm seeing multiple voids each day then there's time for a little bit of retraining to happen. Back at our Home Page we'll see that on top there's yet another report, a Closing Date Exceptions Report, if I click on the Closing Date Exception Report this will give me a running list of all the entries that took place after I closed the period. You'll notice on top that it gives me the closing date history and then below are the transactions that were entered or modified by an individual after the close. Now keep in mind, it does not mean that these entries are in error, it simply means that the entry was made after the closing date. Again, it maybe that only one or two individuals should be making these entries or it maybe that too many entries are happening which means that our Internal Controls for our month end or quarter end close are not accurate enough. The purpose of the report is to review what's happening in your system and understand why it's actually happening. Finally each of these reports will roll over to our actual Audit Trail. The Audit Trail is now turned on automatically by QuickBooks, those of you who had older versions may remember that we had to actually, manually turn this on. The Audit Trail is now considered always on. We will have a list of every transaction, the date, the time and the user. This will give us the ability to see all the transactions that hit our Accounting System. Once again, the concept is to look for unusual activity, here's where I may look to see if there's a number of voids. I see a lot of voids then I'll run the Void Report. If I see unusual amounts of billings or the invoicing going through, again I'll check my sub-reports to ensure that their all accurate. The concept here is to ensure that each of the users are working on the activity that they are authorized for. We can use this to make sure that people are not sharing passwords. For instance, if I find that the administrator is actually putting in new invoices, however that's not their job, this is a key to be able to tell that their leaving their machine unattended. If I leave my QuickBooks open, anyone can sit down in front of it and type in whatever information that they want. We need to ensure that people are closing out for the safety and security of QuickBooks, keep in mind that if someone sits at your machine and makes a transaction that is incorrect it is going to look like you actually put that transaction in. Each of these reports, the Audit, the Void, the Closing Date, the Credit Cards are integral parts of a good Internal Control System. Put them in place and rest easy.