Definition: are methods and standardized procedures that a company’s management can establish to: a) protect the organization’s assets, b) approve, authorize and perform transactions, c) control and oversee all business-related spendings, and d) guarantee the correctness and legitimacy of accounting records. For instance, an accounting controls measure may exist in the form of the management’s semi-restricted involvement in the financial statement preparation process. The incorporation of accounting controls doesn’t ensure the company’s compliance with all the laws and regulations, but it can streamline this process.
In a Sentence:
After the mess the last CEO has created with TycoPhone assets, the first meeting of the board of directors was dedicated to the implementation of new accounting controls. They introduced a regulation that limits the CEO’s power to perform questionable transactions without previously consulting the rest of the board.
We have rather strict accounting controls in our firm, as they force all members of the sales staff to ask for the manager’s approval for every transaction. Due to how long it takes the manager to study all the details of a financial operation, we have lost quite a bit of potential sales.
Synonyms and related words: accounting control system, internal control, segregation of duties, transaction
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