Weak controls are the root cause of most audit findings and most losses. This checklist helps your board and management see where you stand.
Internal controls are the everyday routines that protect an entity’s money, assets and information. When they are weak, errors go unnoticed, fraud becomes easier and audits become harder. The same gaps appear across public entities, local authorities and parastatals.
Self-assessment: answer yes or no
- Bank reconciliations: are all bank accounts reconciled monthly, reviewed and signed by someone other than the preparer?
- Segregation of duties: are the tasks of authorising, recording, and handling cash or assets done by different people?
- Revenue collection: is all revenue receipted, banked intact and promptly, and reconciled to expected income?
- Payment approval: does every payment have supporting documents and an independent authoriser?
- Payroll: is the payroll reviewed monthly against the approved staff establishment, with changes authorised in writing?
- Asset register: is there a complete fixed asset register, verified by a physical count at least annually?
- Budget control: are actual results compared to budget monthly, with variances explained and expenditure above budget approved?
- Debtors and creditors: are balances reconciled and aged regularly, with follow-up on overdue amounts?
- System access: are accounting system users limited to what their role requires, with leavers removed promptly?
- Oversight: does the board or audit committee receive and act on financial and internal audit reports each quarter?
Scoring
| Yes answers | What it means |
|---|---|
| 9 to 10 | Your foundations are sound. Test that these controls operate in practice, not just on paper. |
| 6 to 8 | There are gaps that an auditor will find. Prioritise the ones covering cash and payments. |
| 5 or fewer | Your entity is exposed. A structured control review is advisable soon. |
Why a “yes” needs evidence
Many entities have a policy for each item but cannot show it operating. Signed reconciliations, approval trails and minutes are what convince auditors, and they protect officers if something goes wrong.
Start with the cash controls
If you can only fix a few things this quarter, focus on items 1, 3 and 4. Most fraud in small and mid-sized entities involves cash receipts or payments.
Topics
General guidance only
This article describes how the rules are structured. It is not advice on your circumstances, and tax legislation in Zimbabwe changes regularly. Speak to us — or to another qualified adviser — before acting on anything here.