1. CashDisbursements Controls

2. 3. Establishment of Responsibility
Control is most effective when only one person is responsible for a given task.
4. Segregation of Duties
Different individuals approve and make payment; check signers do not record disbursements
5. Documentation Procedures
Use prenumbered checks and account for them in sequence; each check must have an approved invoice; require employees to use corporate credit cards for reimbursable expenses; stamp invoices paid
6. Physical Controls
Store blank checks in safes, with limited access; print check amounts by machine in indelible ink
7. Independent Internal Verification
Compare checks to invoices; reconcile bank statement monthly
8. Human Resource Controls
Bond personnel who handle cash; require employees to take vacations; conduct background checks
9. 10. E7-4 (P.374)
The following control procedures are used in
Katjas Boutique Shoppe for cash disbursements.
1. Each week, Katja leaves 100 company checks in
An unmarked envelope on a shelf behind the cash register.
2. The store manager personally approves all payments
Before signing and issuing checks.
3. The company checks are unnumbered.
4. After payment, bills are filed in a paid invoice folder.
5. The company accountant prepares the bank reconciliation and reports any discrepancies to the owner.