Question

1. Is a bank account a form of internal financial control? If so, please statement two reasons why.

Answer 1

Internal control procedures are the various policies and procedures adopted by a company for the efficient conduct of the business ,safeguarding the assets,inspection of frauds,accuracy of financial accounting record,timely preparation of financial information.It is done with an objective to make recommendation of good practices and enhance reliability of financial statements.Bank account is an internal control measure because of the following reasons:

1. A bank account helps in accounting every monetary business transaction.It means every transaction will have a proper record for further appraisals in future and also helps in preparation of accurate financial statements by way of identifying accounts receivables, their maturity dates,etc
2. To help spot math errors and frauds bank reconciliation statement can be prepared by comparing your bank statement with general ledger.This helps in effective cash handling through inspecting frauds and numerical errors.

Hope this answer helps.