Homework Answers
The name of control activites applicable along with reason are given below in order :
a. Physical controls
These controls are meant for keeping the physical records of the company safe for future and current use.
b. Reconciliations
The balance as per physical assets condition shall match accounting records. This can be done by reconciling the differences between the two aspects.
c. Employee management
This takes the care of all the employees related issues. This includes training of employees, employees welfare, promotion, accountability and so on. One of the key aspect of employee management is that each employee is trained or guided to do particular job to the standard set.
d. Performance reviews
Performance reviews are usually done at the end of the year to decide upon bonuses, promotions and salaries offered to them .This is usually done by the direct senior level staff along the subordinate employees giving marks based on the whole year performance.
e. Separation of duties
This means that for security purposes and verification, some activities must be done by one and verified by the other. This helps to cross check the activities and if any deficiency exist, this can get easily resolved in the meantime.
f. Proper authorization
Certain documents must not be made accessible to all the employees of company. This can include cash book, document of large clients above certain threshold, administrator right to system, etc. For all these, access controls shall be used and only proper authority shall access over these activities.
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Select the appropriate control activities for each of the following definitions. Control Activities b. c Definitions...
Select the appropriate control activities for each of the following definitions. Control Activities Definitions a. The...
Select the appropriate control activities for each of the following definitions. Control Activities Definitions a. The company should maintain security over assets and accounting records. Management should periodically determine whether the amounts of physical assets of the company match the accounting records. The company should provide employees with appropriate guidance to ensure " they have the knowledge necessary to carry out their job duties. The actual performance of individuals or processes should be checked against their expected performance. Authorizing transactions,...
Requirement a. For each internal control, identify the type(s) of specific control activity (or activities) to...
Requirement a. For each internal control, identify the type(s) of specific control activity (or activities) to which it applies (such as adequate documents and records or physical control over assets and records). Internal control Control activity(ies) Human resource policies require an investigation of an employment application from new employees. Investigation includes checking the 1. employee's background, former employers, and references. Approval of department head or foreman on time records is required 2. before preparing payroll. Adequate documents and records All...
Knowledge Check 01 Which of the following is an example of a preventive control in a...
Knowledge Check 01 Which of the following is an example of a preventive control in a company? Multiple Choice The management evaluates the overall performance by comparing sales for the current year with sales for the previous year. 0 Employees responsible for making cash disbursements are not in charge of cash receipts. 0 Management periodically determines whether the amount of physical assets of the company match the accounting records. 0 0 Actual performance of individuals are routinely checked against their...
Practice Exercise 7-1 Match each of the following control activities with its appropriate description. 1. Assignment...
Practice Exercise 7-1 Match each of the following control activities with its appropriate description. 1. Assignment of responsibility 2. Segregation of duties 3. Documentation 4. Physical controls 5. Review and reconciliation (a) All transactions should include original, detailed receipts. (b) Undeposited cash should be stored in the company safe. (c) Surprise cash counts are performed by internal audit. (d) Responsibility for related activities should be assigned to specific employees. (e) Cheque signers are not allowed to record cash transactions.
Select the appropriate components of internal control for each of the following descriptions Components of Internal...
Select the appropriate components of internal control for each of the following descriptions Components of Internal Control Descriptions a. Procedures for maintaining separation of duties b. Routine activities that are meant to continually observe internal control activities c. Transfer of data from lower managers to top executives for accurate financial reporting d. Formal policies to evaluate internal and external threats to achieving company objectives . Overall attitude of the company with respect to internal controls
For the following terms find the correct definition below and place the letter of that response...
For the following terms find the correct definition below and place the letter of that response in the blank space next to the term. Each definition is used only once. A control procedure that reduces to practically zero the risk of an A. Val IT undetected error or irregularity B. detective controls A process whereby management identifies possible events that C. fidelity bond represent a problem to the firm and then identifies appropriate responses to those problems D. internal control...
Check m Required: Match the following internal controls with the categories of control activities. Control Activities...
Check m Required: Match the following internal controls with the categories of control activities. Control Activities C Internal Controls Separate handling cash (receipt and deposit) functions from record-keeping functions (recording transactions in the accounts receivable subsidiary ledger). Require purchases, payroll, and cash disbursements to be authorized by a designated person Require accounting department employees to take vacations. d. Separate purchasing functions from payables functions. e. Ensure that the same person isn't authorized to write and sign a check f. When...
Select the following definitions (or partial definitions) to the appropriate term. Each term may be used...
Select the following definitions (or partial definitions) to the appropriate term. Each term may be used once or not at all. Term Definition for Partial Definition) a. An institution charged with responsibility for avoiding overissuance of a corporation's stock An institution responsible for maintaining detailed records of shareholders and handling changes of ownership of stock ownership C Cash or other assets set aside for the retirement of a debt d. Shares of its own stock acquired by a corporation for...
Match each of the following principles of internal control with the appropriate description below. A. Establishment...
Match each of the following principles of internal control with the appropriate description below. A. Establishment of responsibility B. Segregation of duties C. Documentation procedures D. Physical controls E. Independent internal verification F. Human resource controls _____ 1. Involves the review, comparison, and reconciliation of data prepared by other employees. _____ 2. Provide evidence that transactions and events have occurred. _____ 3. Includes the authorization and approval of transactions. _____ 4. Rotating employees' duties and requiring employees to take vacations....
L. (10 Points) Match each of the following terms with the appropriate definitions. A. Principles of...
L. (10 Points) Match each of the following terms with the appropriate definitions. A. Principles of internal control B. Cash Over and Short C. Net method D. Voucher system E. Bank reconciliation F. Liquidity G. Receiving report H. Days' sales uncollectecd I. Purchase order J. Gross method 1. 2. 3. A report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement. A set of procedures and approvals designed...
Select the appropriate control activities for each of the following definitions. Control Activities Definitions a. The company should maintain security over assets and accounting records. Management should periodically determine whether the amounts of physical assets of the company match the accounting records. The company should provide employees with appropriate guidance to ensure " they have the knowledge necessary to carry out their job duties. The actual performance of individuals or processes should be checked against their expected performance. Authorizing transactions,...
Requirement a. For each internal control, identify the type(s) of specific control activity (or activities) to which it applies (such as adequate documents and records or physical control over assets and records). Internal control Control activity(ies) Human resource policies require an investigation of an employment application from new employees. Investigation includes checking the 1. employee's background, former employers, and references. Approval of department head or foreman on time records is required 2. before preparing payroll. Adequate documents and records All...
Knowledge Check 01 Which of the following is an example of a preventive control in a company? Multiple Choice The management evaluates the overall performance by comparing sales for the current year with sales for the previous year. 0 Employees responsible for making cash disbursements are not in charge of cash receipts. 0 Management periodically determines whether the amount of physical assets of the company match the accounting records. 0 0 Actual performance of individuals are routinely checked against their...
Select the appropriate components of internal control for each of the following descriptions Components of Internal Control Descriptions a. Procedures for maintaining separation of duties b. Routine activities that are meant to continually observe internal control activities c. Transfer of data from lower managers to top executives for accurate financial reporting d. Formal policies to evaluate internal and external threats to achieving company objectives . Overall attitude of the company with respect to internal controls
For the following terms find the correct definition below and place the letter of that response in the blank space next to the term. Each definition is used only once. A control procedure that reduces to practically zero the risk of an A. Val IT undetected error or irregularity B. detective controls A process whereby management identifies possible events that C. fidelity bond represent a problem to the firm and then identifies appropriate responses to those problems D. internal control...
Check m Required: Match the following internal controls with the categories of control activities. Control Activities C Internal Controls Separate handling cash (receipt and deposit) functions from record-keeping functions (recording transactions in the accounts receivable subsidiary ledger). Require purchases, payroll, and cash disbursements to be authorized by a designated person Require accounting department employees to take vacations. d. Separate purchasing functions from payables functions. e. Ensure that the same person isn't authorized to write and sign a check f. When...
Select the following definitions (or partial definitions) to the appropriate term. Each term may be used once or not at all. Term Definition for Partial Definition) a. An institution charged with responsibility for avoiding overissuance of a corporation's stock An institution responsible for maintaining detailed records of shareholders and handling changes of ownership of stock ownership C Cash or other assets set aside for the retirement of a debt d. Shares of its own stock acquired by a corporation for...
L. (10 Points) Match each of the following terms with the appropriate definitions. A. Principles of internal control B. Cash Over and Short C. Net method D. Voucher system E. Bank reconciliation F. Liquidity G. Receiving report H. Days' sales uncollectecd I. Purchase order J. Gross method 1. 2. 3. A report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement. A set of procedures and approvals designed...
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