Accounting Control

AAA

DEFINITION of 'Accounting Control'

Methods and procedures that are implemented by a firm to help ensure the validity and accuracy of its own financial statements. The accounting controls do not ensure compliance with laws and regulations, but rather are designed to help a company comply.

INVESTOPEDIA EXPLAINS 'Accounting Control'

An example of an accounting control would be limiting management's involvement in the preparation of financial statements. Sometimes it is helpful for management to be involved, since they generally know the company better than anyone. But final say on numbers should be in the hands of an accountant, because management may have incentive to distort numbers to inflate the company's performance.

RELATED TERMS
  1. Transposition Error

    A simple error of data entry. Transposition errors occur when ...
  2. Accounting

    The systematic and comprehensive recording of financial transactions ...
  3. Financial Accounting

    The process of recording, summarizing and reporting the myriad ...
  4. Liability

    A company's legal debts or obligations that arise during the ...
  5. Savings Account

    A deposit account held at a bank or other financial institution ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's ...
Related Articles
  1. Understanding Pro-Forma Earnings
    Fundamental Analysis

    Understanding Pro-Forma Earnings

  2. Finding The Right Accounting Certification
    Professionals

    Finding The Right Accounting Certification

  3. Common Clues Of Financial Statement ...
    Retirement

    Common Clues Of Financial Statement ...

  4. Financial History: The Evolution Of ...
    Professionals

    Financial History: The Evolution Of ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center