"TRUST" - IT'S NOT AN ACCOUNTING CONTROL

Have you reviewed your accounting controls lately? Do you have any? Accounting controls protect you and your employees. We have documented a few basic controls to consider for your company.

Bank Reconciliations

The bank reconciliation should be reviewed each month by someone other than the preparer. The review should be documented with the reviewers' initials and dated. This review should include:

• Make sure voided checks did not clear and that there are not large gaps in the check numbers.
• Bank statements should come unopened to the reviewer prior to the reconciliation process and reviewed for unusual or unapproved transactions, transfers or wires.

Disbursements

Vendor Approval

• All new vendors should be approved by someone other than the bookkeeper and the accounts payable clerk.
• Periodic reviews of the vendor list should be done by the CFO or another supervisor to ensure all the vendors are appropriate and that the disbursements to the vendors are reasonable.

Invoice Approval

• Invoices should be presented with the checks and initialed at that time. This helps minimize the likelihood that invoices are being paid twice.
• The check register should also be reviewed during this process. The best practice requires dual check signers over a certain dollar threshold. While the bank does not verify or monitor this control, it does allow for a second set of eyes to review large expenditures when the invoice is paid.

Payroll

Email correspondence and approvals/review should be retained and documented as part of the payroll review process. This review should include:
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• Review of the employees names to make sure they are bona fide employees
• Review wage rates and hours to make sure they are reasonable
• Investigate any unusual overtime or unusual deductions
• Verify at year end the W-2's reconcile to the YTD payroll registers

At ASP, we have qualified consultants that can assist in helping you put the appropriate controls in place. Don't wait until you have been a victim. Protect your company and your employees today!

    Trust but verify 
-- Ronald Reagan  ​

​Our top priority is to fix our financial controls and leave accounting issues behind us.  - Atsuo Ito