1. Accuracy of Accounting Records: The internal control system helps to ensure that
financial statements accurately reflect the cash balance of an organization. This
includes proper recording of cash transactions, reconciling bank statements and
maintaining proper documentation of all cash transactions.
2. Effectiveness and Efficiency of Operation: Internal controls help to improve the
efficiency of cash management operations by streamlining processes, reducing
errors, and minimizing the risk of fraud or theft. The system helps to ensure that
cash management procedures are followed consistently and efficiently, reducing
the risk of errors and increasing productivity.
3. Safeguarding of Cash Assets: one of the primary objectives of internal controls
over cash management is to protect an organization's cash assets from theft,
fraud, or misappropriation. This is achieved through proper segregation of duties,
restricted access to cash, and the establishment of authorization and approval
procedures for cash disbursements. By protecting cash assets, internal controls
help to maintain the stability and integrity of the organization.