How can a small accounting team reduce cash-control risk when it cannot fully separate every duty?

Author: AcadiFi Team

• Related Article: cpa-cash-controls-segregation-duties-audit-evidence
• Related QB: cash-cycle-incompatible-duties-identification

Answer draft:

Small teams often need compensating controls. The best compensating controls are specific, recurring, and performed by someone who does not have the incompatible access. Examples include dual bank approval, read-only bank statement review by the owner, monthly review of reconciliations, system reports of vendor bank-account changes, and review of manual cash journal entries.

For exam purposes, avoid accepting a vague oversight statement. "The CFO reviews cash" is weak unless the fact pattern says what the CFO reviews, how often, what evidence is used, and whether the CFO is independent of the preparation and payment process. A good compensating control breaks the concealment path.