i) Internal Control for Cheque Payments:

1. Unused cheques should be kept in a secure location.
2. The individual preparing cheques should not have control over purchase or sales ledgers.
3. Cheques should only be signed when supported by approved documents such as invoices, payroll, or petty cash vouchers.
4. Documentation supporting cheques should be signed as evidence of proper review.
5. Cheques should be signed by two authorized individuals, and no blank cheques should be signed.
6. All cheques must be crossed before signing to prevent misuse.
7. Documents supporting the payment should be canceled as “paid” to prevent reuse.
8. Cheques should be dispatched immediately after signing or held securely until dispatch.
9. Returned cheques should be checked against the cashbook and supporting documents.
10. Bank statements should be regularly reconciled with cheque payments.

ii) Internal Control for Bank Reconciliation:

1. Bank reconciliation should be prepared at least monthly.
2. The individual responsible for bank reconciliation should be independent of the receipts and payments functions.
3. The person preparing the reconciliation should obtain bank statements directly from the bank.
4. The reconciliation should involve checking receipts and payments against bank statements to ensure accuracy.