The Necessity For Control Systems

Every accounting information system has controls or verifications in place to guarantee accounting mistakes and abnormalities are lessened. Since the accounting function is carried out by different persons these controls become very important to guarantee the accounting system is working properly.

General control systems include:

-Suspense Accounts

-Control Accounts

-Bank Reconciliation Statements

Suspense account

Short-term account (not included in financial statements) made to document (a) disbursements or receipts connected to unfinished transactions until their conclusion, or (b) inconsistencies between totals of other accounts until their modification or correct arrangement.

Control account

A general ledger account whose equilibrium reveals the total of balances of connected subsidiary ledger accounts. Accounts receivable and accounts payable are the most frequently utilized control accounts, and their balances provide a checking of/ (control) of the correctness of the related subsidiary records.

Bank reconciliation

It shows the investigation and modification of differences between the cash balance shown on a bank statement, and the amount revealed in the account holder’s records. This harmonizing procedure entails making allowances for checks issued but not yet accessible, and for checks put down but not yet cleared or credited. Hence if inconsistencies continue, discovering the source and getting the records into harmony.