Control Procedures for Cash
Segregation of duties
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Example: Two processes such as receiving cash from customers and recording to cash receipt journals are performed by different persons.
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Authorization
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Example: Payment to the supplier is requested by an accountant, reviewed by a senior accountant and approved by a financial manager or CFO.
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Restrict access to cash
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Example: Only persons with cash handling responsibility have access to the cash.
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Restrictive customer’s cheque
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Example: Only cheques that are restrictive to the company’s bank account are accepted. In this case, the cheque can only be deposited to the company’s bank account, not any other person’s account.
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Independent bank reconciliation
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Example: Bank reconciliation is performed every month by the accountant after receiving the bank statement from the bank.
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Daily cash reconciliation
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Example: Cash receipt journal is reconciled to accounts receivable daily. This helps to minimize the risk of error or fraud.
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Daily bank in
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Example: Cash received in the business is deposited to the bank daily. This reduces the risk of cash loss due to overnight cash handling by any personnel.
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Prenumbered document
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Example: All cash receipts are prenumber. This helps ensures the completeness of the cash received in the business.
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Periodic internal audit
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Example: Internal auditors perform the evaluation of internal controls and management of cash regularly.
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