It can be difficult and challenging for a small organization to have appropriate segregation of duties over accounting areas such as cash, receivables and payables, however the benefits are worth pursuing. Increased internal controls reduce the opportunity for theft and limit the potential for intentional or unintentional errors left undetected.

  • Divide accounting duties to multiple people including the bookkeeper or accountant, office manager, clerk and/or general manager.
  • One person should not have the ability to authorize a transaction, record the transaction and have physical custody of the asset.
  • In the accounts receivable process, the cash receipt, deposit, entry into the accounting system, reconciling of bank statements and petty cash procedures need to be divided between multiple people.
  • If a single person is completing multiple steps in a process it could be a month or more until an error is detected which could have a material impact on the financial statements.
  • The risk of fraudulent activity significantly increases when duties are not properly segregated.

An annual review of each accounting process will strengthen the internal controls, eliminate opportunities for theft and diminish the potential for errors to go undetected.  An internal controls audit provided by an experienced SVA auditor will provide the best assurance to safeguard your assets.