AA – L2 – SA – Q4.5 – Internal Controls

Which of the following is NOT an internal control?

A   Authorizing purchase orders

B   Ensuring cash is locked away

C   Performing external confirmation of receivables

 The opening of the post should not be the same person who banks the cheques

C

Explanation:
Internal controls are processes designed by management to ensure reliable financial reporting, compliance, and operations. Authorizing purchase orders, securing cash, and segregating duties (e.g., separating post opening and banking) are internal controls. Performing external confirmation of receivables is an audit procedure performed by the auditor, not an internal control. Option C is the correct answer.