Subsidiary records for accounts payable, accounts receivable, etc., are balanced with control accounts on a regular basis. Journal entries are approved and explained or supported. Accrual accounts provide adequate control over income and expense. Accounting records and valuables are secured in limited-access areas. Duties are separated so that no one individual has complete authority over an entire financial transaction.
Controls are in place to prevent expenditure of funds in excess of approved, budgeted amounts.
For example, purchase requisitions are reviewed against remaining amount in budget category. The following conditions are indicative of satisfactory controls over cash receipts. The individual responsible for the cash receipts function does not sign checks or reconcile the bank accounts and is not responsible for noncash, accounting records, such as accounts receivable, the general ledger, or the general journal. Receipts are deposited promptly and intact. Remittances are listed on a control sheet or other mechanical device for comparison with the bank deposit tickets.