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Controls Over Cash Collections and Cash Disbursements

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What is it about cash that makes it critical that organizations implement controls over cash collections and cash disbursements?

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Solution Summary

The following posting helps answer a business-related question that discusses why it is important for businesses to implement controls over cash collections and cash disbursements.

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Question: What is it about cash that makes it critical that organizations implement controls over cash collections and cash disbursements?

Solution:
It is critical that organizations implement controls over cash collections and cash disbursements because cash is the most liquid of all their assets and is the one most easily stolen. Therefore, it is extremely important for an organization to have well-designed and functioning internal control system involving all cash transactions to include separation of duties. This means that those employees who handle all cash collections and disbursements should not be involved in or have access to accounting records or be ...

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