Harvey G. Beringer, CPA

An internal control warning letter should make businesses aware of certain safeguards.  They should be warned against assigning related duties to the same person.  It is recommended that the bank statements should be scrutinized every month, with particular attention given to the reconciling items.  The check signer should look at proof of all purchases by having the purchase order and receiving attached to the invoice and check to be signed.  By providing a detailed internal control study, a company will help protect itself against fraud.  This would also benefit the accounting service provider by reducing deficient internal controls.

Another type of service to help insure good internal control practices would be one surprise bank reconciliation per year.  This will provide a measure of protection over the cash assets.  People who might be tempted to steal from the account will be deterred, with the knowledge that the bank statement will be examined.  This would include the proper procedures of comparing signatures of check signers to those on file, examine the endorsements to check register, etc.

Implementing the above mentioned procedures can help prevent the need for far costlier forensic services.  Such services would be required upon any suspicion of impropriety, and it would be very time consuming.  This would interrupt the normal operations of the business.