Accounting Controls
The processes and procedures used by organizations to ensure financial statements and reports are accurate are known as accounting controls.
Updated: October 4, 2023
Businesses can maintain financial integrity and accurate data with the help of accounting controls. The processes and procedures used by organizations to ensure financial statements and reports are accurate are known as accounting controls. Detective, preventive, and corrective controls are included in these.
Accounting software is used by businesses to help maintain and support the accounting controls they put in place.
Detective controls, Preventive controls and Corrective controls are three types of accounting controls that is used by companies. There is a unique purpose of each type of accounting control in supporting financial functions. However, more than one type can be used with various numbers of processes and procedures within each type. The length of process and procedure also varies across businesses.
Improved efficiencies across the organization, Increased financial integrity and Better transparency and accountability are some of the benefits of accounting controls.
Too much rigidity, Size of the organization and Management ability to override are some of the challenges with accounting controls. Employees may feel irritated and frustrated by the amount of time and work it takes to complete specific processes since multiple steps and a structured framework is involved in it. Controls can not be always carried out by small organizations the way larger enterprises can do since large team is required to divide work for accounting controls and a proper separation of duties
