control procedures

Topics: Balance sheet, Income statement, Generally Accepted Accounting Principles Pages: 3 (703 words) Published: March 23, 2014
In the present day world, business is a necessary part in our lives. It is everywhere. Accounting is the most basic framework of business. The objective of most businesses is to earn a profit. Business owners use accounting to record and report various pieces of their companies’ financial information. Internal control is broadly defined as the procedures and processes used by a company to safeguard its assets, process information accurately, and ensure compliance with laws and regulations. What is accounting? Accounting is the process of measuring and recording the financial value of the assets and liabilities of a business and monitoring these values as they change with the passage of time. In accounting, internal control plays an important role in preventing and detecting fraud and protecting the organization’s resources. Control procedures, which constitute one of the most important elements of internal control. Separation of duties. Assign separate cash handling and accounting duties among various staff members, and even various departments, if possible. For example, do not allow the person who makes bank deposits to be the only one running the cash register, and do not allow the person who places supplies orders to sign off on checks to suppliers. Make sure that cash reporting responsibilities are spread out enough to prevent theft by collusion. This can be done by giving some responsibility to front-line employees. Cash control. Cash control is one of the most important aspects of an internal accounting control system. Allow only a few trusted employees to make cash deposits, and require these employees to make deposits as soon and as frequently as possible. Keep records of all deposits that include both internally generated records and bank deposit slips, and compare them to your bank statement each month. Hold cash in a secure location when it is on hand. Keep prepared deposits in a locked safe until the deposits are made, and secure cash registers with...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Inventory Control Research Paper
  • Organizational Control Techniques Essay
  • Internal Control and Risk Evaluation Acc/542 Research Paper
  • Internal Controls Essay
  • Essay about civil procedure:
  • Management Control System Research Paper
  • Control Mechanisms at General Electric Essay
  • 2L Civil Procedure Outline Research Paper

Become a StudyMode Member

Sign Up - It's Free