The primary goal of cash controls is to safeguard assets and prevent fraud, errors, or misappropriation.
Frequent bank reconciliations ensure that recorded cash balances match actual bank balances, detecting discrepancies quickly.
Explanation of Answer Choices:
A. Segregation of duties: While critical for cash management, it is not the most fundamental cash control.
B. Use of automated systems: Helpful for efficiency but not a fundamental control.
C. Analysis of cash reports: Important, but reconciling bank accounts is more critical for detecting errors or fraud.
D. Frequent reconciliation of bank accounts: Correct. This is the most fundamental and widely recognized control for safeguarding cash.
References:
Association of Government Accountants (AGA),Cash Management Best Practices.
Government Finance Officers Association (GFOA),Bank Reconciliation Best Practices.
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