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Dear Tutor:
Reference: March/Jule 2020 Exam – Scenario 2 – Requirement B
”The cashier reconciles the bank statements to the cash book monthly and this reconciliation is reviewed and investigated by the financial controller, who evidences his review by way of signature on the bank reconciliation”
The suggested answer has selected this point as Key Control. I am unable to understand why it is key control because if there is a problem in reconciliation cashier is most likely to hide it because he would be most likely be responsible for any discrepancy as he is in charge of cash affairs. The principle of segregation of duties is being violated here, and I just can’t get my head around it as to why the suggested answer has termed it KEY CONTROL.
Can you please explain why it is a KEY CONTROL and not a DEFICIENCY?
It is the financial controller’s review – evidenced by a signature – that is the key control.
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