Internal control should be well-organized with respect to cash. As cash is so much difficult to trace and easily stolen, special consideration should be given to this area of internal control. As a result of the ease with which cash can be stolen, organizations that handle much currency like gaming establishments and bars are particularly vulnerable to skimming. Skimming involves the failure to report all cash receipts in order to evade income taxes. A few special controls for cash can assist the firm in controlling this very easily stolen resource. The following list will go a long way in assuring securing of cash:
- Establishing a definite routine for handling of cash and separate duties so that collusion would be required to conceal a theft.
- Anyone involved with receiving or disbursing cash should have no access to the accounting records for those transactions. Anyone involved with recording such transactions should have no access to the cash.
- Deposit all receipts each day. No payments should be made from daily receipts.
- All disbursements should be made with pre-numbered checks. All checks (including spoiled) should be accounted for.
- All bank accounts should be reconciled monthly.
- A petty cash fund should be set up to make minor disbursements. It should be reconciled monthly.
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