At CFO2Go, we try to impress upon our clients that proper cash management and controls are imperative to company operations. One of the controls we emphasize is who is authorized to sign checks and that it should rest with senior management.
On a recent visit to a new client, I discovered that all checks issued by the company required two signatures from senior management before being sent. I was elated by the fact that a company was actually practicing good cash management and controlling its cash disbursements!
This elation was short lived.
The next thing I learned is that a rubber stamp was utilized to sign the dual signatures on all checks. This was not a huge issue to me until I questioned where the stamp was kept and who had access to it. I was crushed to find out that the stamp was stored in the Accounting Managers top desk drawer, and the stamp contained both required signatures on it. When I inquired where the company had obtained the stamp, the answer was, “well, from the bank!“.
So much for practicing proper cash management.