Protecting Your Cash

Our firm's internal control checklist for protecting the cash in a business has 46 questions designed to detect possible system weaknesses. Here are my TOP TEN:

1. Are checks signed when needed (that is, not signed in advance?)
2. Is counter-signature required for amounts over a predetermined amount?
3. Are checks signed only by authorized signers?
4. Is check signing (including control of mechanical check signers and signature plates) independent of the initiator of purchases, approver of purchases, receiving, shipping, preparer of checks, cash receipts, accounts payable, and cash bookkeeping?
5. Is mail opened and a list of daily receipts prepared independent of the cashier and accounts receivable bookkeeping?
6. Are complaints on customer statements investigated by an employee who is independent of the preparer of the daily cash receipts list, cashier, and accounts receivable bookkeeper?
7. Is handling cash independent of sources of noncash credits to accounts receivable and accounts receivable bookkeeping?
8. Are bank accounts and check signers authorized by the board or owner/manager?
9. Are bank accounts reconciled by a person who is independent of the cash receipts and disbursements functions?
10. Is the list of daily cash receipts compared to postings to customer accounts and deposits by a person independent of the cash receipts and accounts receivable functions?