Question

Not big paragraphs, be brief.

Provide the following information for an organization you have interacted with in the ast few 5 days: Name of organization i. ii. Business activities How the company handles cash in its business Two examples of internal controls observed ii. iv. Two examples of internal control procedures not present for the organization Recommendations how the organization could correct the procedures V. vi. violated.

think of any common company or business and answer the “questions”

Answer 1

Name of organisation: McDonalds Corporation

Business Activity: Chain fast food restaurants

How it handles cash: Cash collections are made at POS and payments are made as per the credit period via wire or cash

Internal Controls present:

• Physical Inventory count of items from time to time and comparison with inventory records and POS records reveal discrepancies.
• Real time balances of cash, inventory can be checked by controllers via integrated system across the organisation.

Internal control not present:

• Managers often share their POS passwords or PIN to subordinate employees considering ease of business flow, but eventually end up getting misued by them.
• Regular assessment of internal controls pertaining to POS are not performed. Hence, risk of internal controls that may have flaws our may be outdated are higher.

Improvements recommended:

• In case of any changes pertaining to in technology procedures affecting the POS, it is  recommend designating a point person in the organization to follow-up and review internal control statistics.
• Policies of strict implementation of controls where POS passwords or PIN are not shared with others to be framed and implemented.
• Frequent changing Passwords or PIN is another way to avoid these risks.