What is Validate in Accounting?

In accounting, to validate is to verify that a transaction is correct. For example, an employee time card is examined and approved by a supervisor before it is loaded into the payroll system. Validation is a common control in an accounting system. Auditors will test to see if validation controls are functioning properly, as part of their examine of an organization’s system of internal controls.

What is the Goal of Validation?

The goal of validation is to ensure that an organization’s financial information is reliable and can be used for decision-making, reporting, or auditing purposes. Without validation, the level of reliance that you could place on an organization’s financial information would be much lower.

Types of Validation Controls

The following types of validation controls are commonly encountered in accounting systems:

Input Validation Controls
Ensure that data entered into accounting systems is in the correct format, within accepted ranges, and complete (e.g., requiring all fields on an invoice form to be filled in).

Field-level validation. Checks for specific data types and restrictions at the field level, such as dates in a valid format or numerical entries within budgeted limits.
Cross-field validation. Verifies that related data fields are logically consistent—e.g., total invoice amount equals the sum of line items.
Code validation. Confirms that account numbers, department codes, or vendor IDs entered match predefined entries in the chart of accounts or master data files.
Range checks. Prevents entries that fall outside of acceptable limits, such as a salary entry that exceeds policy thresholds.
Existence checks. Verifies that referenced records exist, such as confirming that a vendor is in the approved vendor list before processing a payment.
Edit checks. Allows only pre-approved changes to existing data, often requiring a reason code or approval to modify key accounting entries.
Duplicate checks. Prevents the same transaction or document (e.g., invoice) from being entered more than once.
Approval workflows. Enforces segregation of duties by requiring managerial or supervisory approval before certain transactions are processed or finalized.
Reconciliation controls. Automatically matches and validates data across systems or periods (e.g., bank reconciliations, subledger-to-ledger checks).
Batch control totals. Ensures that totals of manually entered batch transactions match expected or calculated totals before posting.
Interface controls. Validates the completeness and accuracy of data transferred between integrated systems (e.g., payroll to general ledger).