INTERNAL FINANCIAL CONTROL ( IFC ) SELF ASSE

General Accounting Controls Yes No N/A

1. Chart of accounts
2. Organizational
3. Accounting procedures
chart to manual
define
responsibilities
4. Absence of entries direct to ledgers
5. Posting references in ledgers
6. Review of journal entries
7. Use of standard journal entries
8. Use of prenumbered forms
9. Support for all journal entries
10. Access to records limited to authorized
persons
11. Rotation of accounting personnel
12. Required vacations
13. Review of system at every level
14. Appropriate revision of chart of accounts
15.
16. Appropriate
Separation ofrevision of procedures
recordkeeping from
operations
17. Separation of recordkeeping from
custodianship
18. Record retention policy
19. Bonding of employees
20. A conflict of interest policy

Cash Funds Controls Yes No N/A

1. Imprest system
2. Reasonable amount
3. Completeness of vouchers
4.
5. Custodian responsible
Reimbursement checksfor
to fund
order of
custodian
6. Surprise audits
7. No employee check cashing
8. Physically secure
9. Custodian has no access to cash receipts
10. Custodian has no access to accounting
records

Cash Receipts Controls Yes No N/A

1. Detail listing of mail receipts
2. Restrictive endorsement of checks
3. Special handling of postdated checks
4. Daily deposit
5. Cash custodians bonded
6. Cash custodians apart from negotiable
instruments
7. Bank accounts properly authorized
8. Handling of returned NSF items
9. Comparison of duplicate deposit slips with
cash book
10. Comparison of duplicate deposit slips with
detail A/R
11. Banks instructed not to cash checks to
company
12. Control over cash from other sources
13. Separation of cashier personnel from
accounting duties
14. Separation of cashier personnel from credit
duties
15. Use of cash registers
16. Cash register tapes
17. Numbered cash receipt tickets
18. Outside salesmen cash control
19. Daily reconciliation of cash collections

Cash Disbursement Controls Yes No N/A

1. Numbered checks
2. Sufficient support for checks
3. Limited authorization to sign checks
4. No signing of blank checks
5. All checks accounted for
6. Detailed listing of checks
7.
8. Mutilation of voided
Specific approval checks
of unusually large
checks
9. Proper authorization of persons signing
checks
10. Control over signature machines
11. Check listing compared to cash book
12. Control over interbank transfers
13. Prompt accounting for interbank transfers
14. Checks not payable to cash
15. Physical control of unused checks
16. Cancellation of supporting documents
17. Control over long outstanding checks
18. Reconciliation of bank account
19. Independence of person reconciling bank
statement
20. Bank statement direct to person reconciling
21. No access to cash records or receipts by
check signers

Investments Controls Yes No N/A

1. Proper authorization of transactions
2. Under control of a custodian
3. Custodian bonded
4. Custodian separate from investment
5. cash receipts
records
6. Safety deposit box
7. Record of all safety deposit visits
8. Access limited
9. Presence of two required for access
10. Periodic reconciliation of detail with control
11. Record of all aspects of all securities
12. Availability of brokerage advices, etc.
13. Periodic internal audit
14. Securities in name of company
15. Proper segregation of collateral
16. Physical control of collateral
17. Periodic appraisal of collateral
18. Periodic appraisal of investments
19. Adequate records of investments for
application of equity method

Accounts Receivable and Sales Controls Yes No N/A

1. Sales orders prenumbered
2. Credit approval
3. Credit and sales departments
independent
4. Control of back orders
5. Sales order and sales invoice comparison
6. Shipping invoices prenumbered
7. Names and addresses on shipping invoice
8. Review of sales invoices
9. Control over returned merchandise
10. Credit memoranda prenumbered
11. Matching of credit memoranda and
receiving reports
12. Control over credit memoranda
13. Control over scrap sales
14. Control over sales to employees
15. Control over C.O.D. sales
16. Sales reconciled with cash receipts and A/R
17. Sales reconciled with inventory change
18. A/R statement to all customers
19. Periodic preparation of aging schedule
20. Control over collections of written-off
receivables
21. Control over A/R write off, e.g., proper
authorization
22. Control over A/R written off, i.e., review for
possible collection
23. Independence of sales, A/R, receipts, billing
and shipping personnel

Notes Receivable Controls Yes No N/A

1. Proper authorization of notes
2. Detailed records of notes
3. Periodic detail to control comparison
4. Periodic confirmation with makers
5. Control over notes discounted
6. Control over delinquent notes
7. Physical safety of notes
8. Periodic count of notes
9. Control over collateral
10. Control over revenue from notes
11. Custodian of notes independent from cash
and recordkeeping
Inventory and Cost of Sales Controls Yes No N/A
1. Periodic inventory counts
2. Written inventory instructions
3. Counts by noncustodians
4. Control over count tags
5. Control over inventory adjustments
6. Use of perpetual records
7. Periodic comparison of G/L and perpetual
records
8. Investigation of discrepancies
9. Controlover
10. Control overinventory
consignment inventory
stored at
warehouses
11. Control over returnable containers left with
customers
12. Preparation of receiving reports
13. Prenumbered receiving reports
14. Independence
15. Receiving reports in numerical
of custodian fromorder
recordkeeping
16. Adequacy of insurance
17. Physical safeguards against theft
18. Physical safeguards against fire
19. Adequacy of cost system
20. Cost system tied into general ledger
21. Periodic review of overhead rates
22. Use of standard costs
23. Use of inventory requisitions
24.
25. Periodic summaries
Control over of inventory
intracompany usage
inventory
transfers
26. Purchase orders prenumbered
27. Proper authorization for purchases
28. Review of open purchase orders

Prepaid Expenses and Deferred Charges Yes No N/A

1. Proper authorization to incur
2. Authorization and support of amortization
3. Detailed records
4. Periodic review of amortization policy
5. Control over insurance policies
6. Periodic review of insurance needs
7. Control over premium refunds
8. Beneficiaries of company policies
9. Physical control of policies

Intangibles Controls Yes No N/A

1. Authorization to incur
2. Detailed records
3. Authorization to amortize
4. Periodic review of amortization

Fixed Assets Controls Yes No N/A

1. Detailed property records
2. Periodic comparison with control accounts
3. Proper authorization for acquisitions
4. Written policies for acquisition
5. Control over expenditures for self-
construction
6. Use of work orders
7. Individual asset identification plates
8. Written authorization for sale
9. Written authorization for retirement
10. Physical safeguard from theft
11. Control over fully depreciated assets
12. Written capitalizationexpense policies
13. Responsibilities charged for asset and
depreciation records
14. Written, detailed depreciation records
15. Depreciation adjustments for sales and
retirements
16. Control over intracompany transfers
17. Adequacy of insurance
18. Control over returnable containers

Accounts Payable Controls Yes No N/A

1. Designation of responsibility
2. Independence of A/P personnel from
purchasing, cashier, receiving functions
3. Periodic comparison of detail and control
4. Control over purchase returns
5. Clerical accuracy of vendors invoices
6. Matching of purchase order, receiving
report and vendor invoice
7. Reconciliation of vendor statements with
A/P detail
8. Control over debit memos
9. Control over advance payments
10. Mutilation
11. Review of unmatched receiving
of supporting reports
documents at
payment
12. Review of debit balances
13. Investigation of discounts not taken

Accrued Liabilities and Other Expenses

Controls Yes No N/A
1. Proper authorization for expenditure and
incurrence
2. Control over partial deliveries
3. Postage meter
4. Purchasing department
5. Bids from vendors
6. Verification of invoices
7. Imprest cash account
8. Detailed records
9.Independence
10. Responsibilityfrom
charged
G/L and cashier
functions
11. Periodic comparison with budget

Payroll Controls Yes No N/A

1. Authorization to employ
2. Personnel data records
3. Tax records
4. Time clock
5. Supervisor review of time cards
6. Review of payroll calculations
7. Comparison of time cards to job sheets
8. Imprest payroll account
9. Responsibility for payroll records
10. Compliance with labor statutes
11. Distribution of payroll checks
12. Control over unclaimed wages
13.
14. Profit sharing authorization
Responsibility for profit sharing
computations
Long-Term Liabilities Controls Yes No N/A
1. Authorization to incur
2. Executed in company name
3. Detailed records of long-term debt
4. Reports of independent transfer agent
5. Reports of independent registrar
6. Otherwise adequate records of creditors
7. Control over unissued instruments
8. Signers independent of each other
9. Adequacy
10. Periodic of records
review of debtofagreement
collateral
compliance
11. Recordkeeping of detachable warrants
12. Recordkeeping of conversion features

Shareholders Equity Controls Yes No N/A

1. Use of registrar
2. Use of transfer agent
3. Adequacy of detailed records
4. Comparison of transfer agents report with
records
5. Physical control over blank certificates
6. Physical control over treasury certificates
7. Authorization for transactions
8. Tax stamp compliance for canceled
certificates
9. Independent dividend agent
10. Imprest dividend account
11. Periodic reconciliation of dividend account
12. Adequacy of stockholders ledger
13. Review of stock restrictions and provisions
14. Valuation procedures for stock issuances
15. Other paid-in capital entries
16. Other retained earnings entries
C ) SELF ASSESSMENT CHECKLIST

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