I have run across a situation that has me puzzled, and I'm looking for feedback from the group. I have encountered a software program that allows multiple legal entities to be created in a single database (login). This is great, as it minimizes the login/logout, changing company process, however, this particular program numbers Accounts Receivable invoices sequentially at the DATABASE level, not the legal entity level.
If this permissible? For my entire working career (36 years) I've only seen invoices numbered by company or by a more discrete breakdown within the company, such as location, warehouse, etc.
What are the audit implications? What are the legal implications? Personally, I think there is some risk exposure here. The customer I'm working with is concerned about protecting assets within each company and is extremely hesitant to utilize this feature.
Appreciate any and all comments. Thanks!
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Ann Sims CCIFP
Owner
Sims Consulting and Accounting Services
Loveland CO
(970) 292-7598
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