Question

2. List the reasons why a bank reconciliation is a integral of internal financial controls.

Answer 1

Anwe Bank Reconciliation Statement is internal financial controls 40 integral of Bank Reconciliation statement is a very importynt to for internal control of cash flows. It helps in telecting errors, figyd irregularities occured, if any, at the time of passing entries in the cash book or in the pass book, whether intentionally oy unintentioodlly. siace frauds can be detected on the preparation of bank reconciliation statement therefore accountants are careful while preparing and Martaining the records of the bushen enterprise. Hence, it works of do important mechanism of internal conhol. following are the reasons that why bank reconciliation statement is a integral of internal financial control: (1) Bank Reconciliations will bring out gay errors that may I have been committed either in cash book or in pqos book (2) Bank Reconciliations are necessary in preventing and detecting fraud. It discourager accountants of the bank from embezzlement. (3) Bank Reconciliations also helps to identify accounting and bank extors by providing explanations of the differences between accounting records cash balances te banke bylonice position per the bagh stalement (4) The bank reconciliations ensures that all tranjactions that hau been gone through bank statements have been reviewed and checks