Check and Balance | Financial Foothold


In accounting, “checks and balances” refer to the system of controls put in place to prevent and detect errors, fraud, or other irregularities in financial transactions. The goal of checks and balances is to ensure the accuracy, completeness, and validity of financial records and reports.


Checks and balances in accounting involve a variety of procedures, including:


Separation of duties: 

This means dividing accounting tasks among different individuals or departments to prevent any one person from having complete control over financial transactions. For example, the person who records transactions should not be the same person who authorizes payments.


Approval and authorization:

All financial transactions should be authorized and approved by someone with appropriate authority before being processed.



Regular reconciliations of accounts and bank statements help to ensure that transactions have been accurately recorded and that the accounts balance.



Independent audits are conducted to ensure that financial records are accurate and complete.


By implementing checks and balances in accounting, organizations can prevent errors and fraud, and maintain the integrity of their financial reporting.