What is an Organization?
An organization is a social arrangement which pursues collective goals, which controls its own performance, and which has a boundary separating it from its environment, includes a corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, two or more persons having a joint or common interest, or any other legal entity.What are supporting documents for financial transactions
Financial transactions – All receipts, disbursements and transfers that are ultimately recorded in the organization books of account. Supporting documents may be maintained in electronic and/or hard copy form. Examples of such documentation might include authorizations and requests relating to all financial transaction, payrolls, requisitions and purchase orders, travel authorizations and expense reimbursements, petty cash reimbursement requests, journal entries, fund transfers, receipts and vouchers for all financial transaction .
WHY ORGANIZATION HAVE TO MAINTAIN SUPPORTING DOCUMENTS:
To make sure that organization funds are used according to assigned responsibilities and not for personal benefit. Expenditures and other charges are allowable and consistent with donor of sponsor restrictions.
To give an approval that transactions are accurate, expenditure are reasonable.
Supporting documentation exists and is retained by the organization for possible review by internal or external auditors.
Document that support the validity of the transaction (including the amount of the transaction). Supporting documentation must satisfy audit scrutiny.
Maintaining supporting documents enable organization in planning and in decision making.
It also enable an organization to control daily transaction to avoid fraud and misuse of organization resources.
Maintaining supporting documents is one of condition of Financial Management Standard.
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