Internal Control Over Financial Reporting: A Checklist

Bethany Mullinix
5 min read
Internal Control Over Financial Reporting: A Checklist

What prevents a company from letting bookkeeping best practices get pushed to the back burner or from forgetting to disclose vital financial information to investors? 

Though one might imagine that a company with lax financial reporting practices would struggle to get funding or even have to close its doors entirely, some companies do manage to get away with these less-than-scrupulous practices for extended periods of time. 

In response to rampant poor business practices, regulators tightened the governance of each company’s accounting practices by issuing the Sarbanes-Oxley Act of 2002. Under this act, businesses must monitor and manage a set of internal controls to ensure the accuracy of their financial statements to investors.

Due to the complex nature of accounting, many business owners aren’t sure how to manage their internal controls. It can be easy to forget about a particular policy or misplace an important document. Some businesses also have strict internal controls around specific areas and weak or nonexistent controls in others. 

It can be all too easy to let strict protocols slip here and there, especially if your business runs on trust and strong relationships, but it can have unintended consequences. Failure to comply with regulations, or to accurately disclose the company’s finances to auditors and investors, could cost a lot of time, money, and hassle. You don’t want to end up on the hook for SEC fines due to internal control failures

Just because you run a small, growing business rather than a massive corporation doesn’t exempt you from having to comply with the regulations and requirements set down by auditors. Every company, from the newest startup to the most established international enterprise, needs to have internal controls over financial reporting. A checklist can help you keep track of important information and avoid forgetting crucial “to do” tasks. 

Use the following financial controls checklists to ensure you’ve dotted each i and crossed every t. 

Improve Internal Control Over Financial Reporting With This Checklist

We’ve broken down our sample internal controls checklist into several sections. That’s because your accounts payable checklist will likely look a bit different from your payroll checklist, which will vary from the list you use to manage billing. 

Accounts Payable

Accounts payable is one of the most vulnerable areas when it comes to accuracy, because it provides so many opportunities for fraud, calculation errors, typos, and other problems. If you have to pick a department in which to begin implementing your internal control checklist first, make it accounts payable. 


You may notice some similarities between the internal payroll and accounts payable checklists. They both involve keeping physical checks safe or verifying that digital transactions happen on a secure platform. 


The internal controls checklist for billing functions is similar to accounts payable, only in reverse. Instead of verifying each step as you pay your suppliers for their services (as you do in accounts payable), here you’ll track each detail of your customers’ incoming payments.

Feel free to adapt this list to include any special processes your company uses and drop the ones you don’t. You’re striving to meet standardized regulatory goals, but the exact process by which you get there will differ based on your approach. That’s why we’ve included items relating to both physical checks and digital transactions.

With Zeni, you don’t have to keep track of everything by yourself. 

If the process of maintaining strict internal controls sounds too complex, confusing, or even downright tedious for your taste, you might feel dread at the thought of putting this checklist to use in your own company. You have a whole business to run — do you have the time to write down each check’s identifying numbers and personally sign each outgoing check?  

What if there was a way to let someone else — a team of experts you trust — handle the financial side of your business while you get to focus on the things you love about growing your startup? You’d be able to pour your heart and soul into perfecting your product and building relationships with your customers without losing sleep over regulatory compliance. 

The solution you’re looking for is a full-service accounting team like Zeni. You can have clean, accurate books, detailed reports for even the most hawk-eyed and ill-tempered auditor, and a dedicated expert finance team at your fingertips. 

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