Bookkeeping › Control Accounts

Why is a control account a form of internal control?

Intermediate

Answer

Because it is prepared independently of the subsidiary ledgers (often by a different person), a control account provides an independent check that catches errors and can deter or detect fraud in the personal ledgers (e.g., teeming and lading). Agreement between the two gives assurance the detailed records are complete and accurate.
Real-world example Having a supervisor maintain the control account separately from the ledger clerk deters manipulation of customer balances.

Common follow-ups: How does independence deter fraud? | What is teeming and lading?