INTERNAL CONTROL PROCEDURES
What is Internal Control?
It is the policies and procedures used by a company to prevent theft or fraud. Internal Control
will improve upon the efficient operations of the company and ensure the integrity of the
financial statements. Certified Bookkeepers can implement specific procedures to safeguard
the company’s assets and ensure accuracy of the financial results. Some examples are:
Separation of Duties
Separate duties so that no one has control over all aspects of a process or transaction. For
example, receipts and deposits should be separated from recording transactions and
Physical Control of Assets
Assets such as cash, inventory and equipment should be safeguarded by limiting access to
designated individuals. Periodically, these assets should de counted and compared to financial
Monthly accounting reconciliations can ensure that internal and external accounts identify
errors which can be corrected on a timely basis. Bank reconciliations can reveal errors that
require corrections to ensure the accuracy of the financial statements.
Appropriate individuals should review and authorize certain transactions to add greater
credibility to the accounting records. For example, cheques should be signed only when backed
up by authorized documentation.
Maintain Standardized Supporting Documents
Standard documents will ensure record keeping will be consistent and make it easier to
discover discrepancies. These documents provide evidence that processes and controls are in
use to ensure accurate records.