Film Accounting Glossary
Internal controls
What are internal controls?
Also called financial controls, or controls policy.
Internal controls are the procedures that keep a production's money where it belongs: separation of duties, dual signatures above a threshold, purchase orders before commitment, matched invoices before payment, independent bank reconciliation, and verified vendor bank details.
They exist because productions move large sums quickly through temporary organizations, which is exactly the environment fraud favors. A completion guarantor or studio will test the controls, not just the numbers.
Example
The controls that matter are unglamorous: the person who raises the purchase order is not the person who signs the check, payments above $5,000 need two signatures, invoices are matched to POs and proof of receipt, and new vendor bank details are verified by phone to a known contact.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Written down before prep and tested by the completion guarantor or studio, who examine the process as well as the numbers.
Common mistake
Treating controls as paperwork that slows the show down. Productions move large sums fast through temporary organizations, which is exactly the environment fraud prefers.
Related questions
- What internal controls should a production have?
- Separation of duties, dual signatures above a threshold, purchase orders before commitment, invoices matched before payment, independent bank reconciliation, and verified vendor bank details.
- Who checks a production's internal controls?
- The studio or completion guarantor, which examines the process as well as the numbers, because weak controls make the numbers unreliable regardless of intent.