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. Financial Accounting

    The process of recording, summarizing and reporting the myriad ...
  3. Accounting Equation

    The equation that is the foundation of double entry accounting. ...
  4. Savings Account

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

    A type of accounting process that aims to capture a company's ...
  6. Liability

    A company's legal debts or obligations that arise during the ...
Related Articles
  1. Fundamental Analysis

    Understanding Pro-Forma Earnings

    These figures can either shed light on a company's performance or skew it. Find out why.
  2. Professionals

    Finding The Right Accounting Certification

    An accounting certification may be the boost your career needs. Find out how to get the most bang for your buck.
  3. Retirement

    Common Clues Of Financial Statement Manipulation

    Search for the "bloody" fingerprints in accounting crimes.
  4. Professionals

    Financial History: The Rise Of Modern Accounting

    Find out how these two have grown hand-in-hand throughout our modern history.
  5. Insurance

    International Reporting Standards Gain Global Recognition

    Comparing financial numbers from corporations in different countries is possible with the adoption of IFRS.
  6. Professionals

    Financial History: The Evolution Of Accounting

    Follow accounting from its roots in ancient times to the profession we now depend on.
  7. Investing Basics

    What is the difference between tangible and intangible assets?

    Discover the difference between tangible assets and intangible assets and the types of assets that are in each. Additionally, learn where these are recorded.
  8. Fundamental Analysis

    What is the difference between profitability and profit?

    Calculating company profit and profitability are not one and the same, and investors should understand the difference between the two terms.
  9. Fundamental Analysis

    Should companies break out accounts receivables into subledgers?

    Find out why every company that sells on credit should break down its accounts receivable into individual customer subsidiary ledgers, or subledgers.
  10. Bonds & Fixed Income

    What is the difference between yield to maturity and the yield to call?

    Determining various the various yields that callable bonds can provide investors is an important factor in the bond purchasing process.

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center