Determine whether each procedure described below is an internal control strength or weakness; then identify the...
Determine whether each procedure described below is an internal control strength or weakness; then identify the internal control violated or followed for each procedure.
- The same employee requests, records, and makes payment for purchases of inventory.
- The company saves money by having employees involved in operations perform the only review of internal controls.
- Time is saved by not updating records for use of supplies.
- The recordkeeper is not allowed to write checks or initiate EFTs.
- Each salesclerk is in charge of their own cash drawer.
ANSWER CHOICES:
Weakness or Strength?
-------------------
a. Apply Technological Controls
b. Divide responsibility for related transactions
c. Establish Responsibilities
d. Insure Assets and Bond Key employees
e. Maintain Adequate Records
f. Perform regular and independent reviews
g. Separate record-keeping from custody of assets
--------------------------------------------------------
| Strengths or Weakness? | Internal Control Principle: |
| 1. | |
| 2. | |
| 3. | |
| 4. | |
| 5. |
Homework Answers
| Strengths or Weakness? | Internal Control principle: |
| 1. Weakness | b. Divide responsibility for related transactions |
| 2. Weakness | f. Perform regular and independent reviews |
| 3. Weakness | e. Maintain Adequate Records |
| 4. Strength | g. Separate record-keeping from custody of assets |
| 5. Strength | c. Establish Responsibilities |
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