At the end of each month, the accounting team reviews each balance for accuracy

Typically the Finance Manager or CFO uses a comprehensive checklist to ensure all balances have been appropriately prepared and reviewed

This covers a number of key control activities:

Assignment of responsibility

Independent checks of performance

Segregation of duties

Authorization

Documentation

Go through bullets 1 & 2

For bullet 3, prior to explaining how each activity relates to the FSCP, ask a student to describe what the control activity is.

Assignment – clearly assigns work to an individual, manager or other knows exactly who is responsible

Independent checks – another person on the team reviews the work prepared for completeness and accuracy

Segregation of duties – especially important under the cash section, ensure one person is posting entries and another is reconciling to the actual bank balance

Authorization – detailed review by Mgr or CFO ensures he/she is aware of all material transactions and they are in line with what they have authorized over the course of the month

Documentation – the checklist documents what each person has prepared and reviewed and provides evidence that everything has actually been completed

checklist

We’ll discuss the key balances you will be involved with:

Cash

Fixed assets

Prepaid assets

Accounts receivable

Accounts payable

Accruals

As a junior accountant you will be a key member of the team during the month-end, responsible for preforming a number of tasks. These tasks will differ at each company depending on the size of the team and type of business.

Qs: Before we move on to the specifics, any questions about the FSCP in general?