Are Dual Signatures a good internal control requirement?
Yes. An important internal control related to cash disbursements can include requiring two authorized signatures on all company checks generally over a specific amount that has been set by management or the board directors. By requiring two signatures, the company is verifying that both signers agree that the payment is proper and reasonable. The requirement of two signatures reduces the likelihood that one will write improper checks to themselves or writing checks to a fictitious company.
Are banks looking at your checks to verify that the dual signatures are on the checks?
No. Many companies are under the assumption that banks will be reviewing the checks and verifying that checks have two signatures, as required by the company. Banks are not looking for dual signatures–they process certain information from the check including verifying that there is an allowed signature but will not be looking past the first signature. Banks consider dual signatures to be an internal arrangement within the company between those authorized to sign checks and do not want the liability for verifying two signatures.
Should dual signatures still be required if the banks are not checking for dual signatures?
Yes. Continue to require dual signatures but know that it is your responsibility to verify that the internal control steps you have in place are working. There are several ways do this: the person who mails the checks can verify that two signatures are on the checks or the person doing the bank reconciliation can review the canceled checks or go on-line to verify that the dual signatures were done as required.