Auditors test your internal controls, not just your numbers. Strong controls reduce audit testing, lower fees, and, more importantly, protect the business from error and fraud. None of them require enterprise software.
What you'll learn
→ Segregation of duties → Approval matrix → Bank and cash controls → Documented monthly closeSegregation of duties
The cornerstone control: no single person should authorise, execute, and reconcile a transaction. Authorise the bill (department head), pay the bill (finance), reconcile the bank account (separate finance team member). Three people, three steps.
Even small teams can implement: a 3-person finance function rotates duties; a 2-person team gets external accountant or owner involvement on reconciliation. The biggest fraud risks come from concentrated control.
Approval matrix
Document who can approve what value: AED 5K to managers, AED 25K to finance director, AED 100K to CEO, AED 500K to board. Apply across bills, expense reports, purchase orders, capex, contracts.
Auditors test compliance with the matrix: sample 30 transactions, check the approval evidence. Variance from the documented matrix raises an internal control finding. Maintain the matrix and the evidence, both are essential.
Bank and cash controls
Dual authorisation on transfers above AED 50K. Bank statements downloaded directly from the bank, not forwarded by an employee. Petty cash limited (AED 5K) and reconciled weekly. Direct bank feeds where possible, eliminates statement tampering.
Most fraud at SMEs involves manipulation of bank documents or unauthorised payments. These controls are inexpensive to implement and dramatically reduce risk. Your insurer (if you have crime insurance) will require some of them.
Documented monthly close
Monthly close with bank reconciliations, control account reconciliations, accruals and prepayments, signed-off P&L is the strongest single control. Auditors review the close cadence and consistency. A documented, repeatable close reduces year-end audit hours significantly.
Acowntant clients have a built-in close workflow with automated reminders and approvals. Manual systems can replicate with a documented checklist and a shared task tracker. The discipline matters more than the tooling.
This guide is general information, not professional advice. For situations that involve specific facts, talk to your accountant, or hire one of ours from the marketplace.