TERM 1
Separation of Duties
DEFINITION 1
The person who writes the checks to pay bills is different
from the people who authorize the payments and keep
records of the payments.
TERM 2
Physical
Controls
DEFINITION 2
The checks are kept in a locked drawer. The only person who
has the key is the person who writes the checks.
TERM 3
Sound Personnel
Practices
DEFINITION 3
The person who writes the checks is bonded.
TERM 4
Periodic Independent Verification
DEFINITION 4
Once each month the owner compares and reconciles the
amount of money shown in the accounting records with the
amount in the bank account.
TERM 5
Authorization
DEFINITION 5
The owner of the business approves each check before it is
mailed.
