Internal Cash Control Procedures
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ScribdTranslationsInternal Cash Control Procedures
Translated by
ScribdTranslationsCASH CONTROL
It can be defined as all those administrative measures that allow for consistency.
permanent in the treatment of each and every operation generated by the
cash in hand and banks, in order to inform the accuracy of their results.
Everything that can be understood as money or documents convertible into money is effective.
This transformation will be characterized by the immediacy and liquidity of these. We are
talking about a current asset, that is, the most liquid asset that a
company, therefore it must enable a series of arrangements for its custody and handling
procedures and principles of internal control.
The cash account is the only account that can easily fall victim to activities.
fraudulent. Due to this, it is very important for a company to establish guidelines for
manage the cash account.
To begin with, it is necessary to have a separation of functions. In addition to this, it is
It is necessary to have a written protocol for the handling and disbursement of cash.
This type of control is also known as Internal Control, since it is
carried out by order of the company.
The fundamental purpose or objective of Internal Control is
The reduction of errors.
The reduction of the risk of loss and achieving fluency in its management.
Accuracy and truthfulness of results.
Accuracy of the records.
Accuracy in financial information.
Accuracy in financial forecasts.
Prevent fraud.
Encourage compliance with company rules.
CONTROL PROCEDURE: These are the activities established by the company in order to
to provide and safeguard their interests. These procedures apply to:
The cash in the Main Vault.
And they can be divided into three groups:
Control Applicable to Revenues. It is the confrontation of Daily Report of
Box – with the reports submitted by the departments of the company
that gave rise to those revenues.
oControl Applicable to Expenses.
These are the measures taken to ensure that all revenue from the Box
have been deposited into the company's open accounts with the
financial institutions.
You must carry out a constant verification of the authenticity of the
deposit receipts regarding date, amount, detail of your
content - cash and check relationship among others.
Balance Control.
They are periodic confirmations of their truthfulness with the physical existence of
money held by the cashier; this act is called Cash Count.
Another control procedure is the Petty Cash.
These are based on the constant monitoring of the established rules.
by the company in the creation of the Fixed Fund.
This control is felt every time a Fund Replenishment is prepared, or
in the frequent cash counts that are carried out.
The minimum requirements for control measures are based on:
Minimum payment.
Nature of the payment.
Approval of payment
Another procedure for deposits in financial institutions.
The Control Applied to Deposits in Financial Institutions. Due to the
nature of demand deposits, we can classify the control measures
in four large groups:
Income or Deposit Control: It is carried out through confrontation with
figures with the Cash Report-expenses, along with its corresponding payroll
deposits and their records.
the control of checks and/or authorizations. When adopting the procedure of
payment by checks, it is necessary to include a series of
elements such as would be:
a) An Auxiliary Cash Journal.
b) An Auxiliary Journal of Cash Outflows.
c) The creation of a Petty Cash Fund or Cash Drawer, to make the
cash payments indoors.
This control is based on independence, autonomy, and responsibility.
of the different officials involved, from the submission of your
issuance until delivery to the beneficiary.
Remember that control is to compare figures from different sources and the same
evidential power.
The signatures that formalize and validate the check before third parties must
at least two, and jointly, of officials
highly qualified and responsible in the organizational structure of the
company.
The control of debit and credit notes. The debit and credit notes
they are documents issued by financial institutions in order to inform
the decreases or increases in funds, information that you have
knowledge of the company at the time of receiving them. To have control
effective of them, there must be fluidity in communications between the
financial institution and the company, and a timely review of these
documents.
Balance control. It is the absolute and general control of all the
operations recorded by the company and by the financial institutions,
banking and/or credit. The latter issue a report of their
records, referred to as Account Statement and which responds to all the
income documents recorded by the company. Their confrontation is
call Conciliation.
ESCAPE FROM CONTROL
The countless cases of evasion of control make the company's management,
At all levels, maintain and apply meticulous zeal in cash management.
Implementation of appropriate control procedures.
Selection of suitable personnel.
Crossing and comparing information about cash management.
Maintenance and proper control of its physical existence.
The cases of evasion of control can be classified according to their causes into
Involuntary negligence of the person responsible for cash handling, due to a lack of
Internal Control.
Voluntary negligence of the person responsible for handling cash, based on
in the absence of Internal Control.
Voluntary negligence of the person responsible for handling cash, using
fraudulent procedures that distort the applied Internal Control.