What is the relationship between bank reconciliations and internal controls?

Bank reconciliations play a crucial role in enhancing internal controls within an organization. This process involves comparing the company's cash records to the bank statements to identify discrepancies, such as unrecorded transactions, errors, or potential fraud. By regularly performing bank reconciliations, a business can ensure that its cash balances are accurate and that its financial records reflecttrue transactions. This proactive approach helps in detecting and preventing errors or fraud, which reinforces the overall integrity of the company's financial reporting and safeguarding of assets.

Improved internal controls foster a reliable financial environment where financial statements are more accurate, leading to better decision-making and resource allocation. Thus, the relationship between bank reconciliations and internal controls is one of support and enhancement, making option B the most appropriate choice.