For each of these five separate cases, identify the principle(s) of internal control that is violated. Recommend what the business should do to ensure adherence to principles of internal control.
1. Halton Company records each sale on a preprinted invoice. Since sometimes invoices are spoiled when they are prepared, the invoices are not prenumbered, but the sales clerk writes the next number onto each invoice.
2. Julia and Justine are cashiers at Tico Company. Justine often processes transactions from Julia’s cash drawer when Julia is at lunch.
3. Nori Nozumi posts all patient charges and payments at the Hopeville Medical Clinic. Each night Nori backs up the computerized accounting system to a tape and stores the tape in a locked file at her desk.
4. Benedict Shales prides himself on hiring quality workers who require little supervision. As office manager, Benedict gives his employees full discretion over their tasks and for years has seen no reason to perform independent reviews of their work.
5. Cala Farah’s manager has told her to reduce costs. Cala decides to raise the deductible on the plant’s property insurance from $5,000 to $10,000. This cuts the property insurance premium in half. In a related move, she decides that bonding the plant’s employees is a waste of money since the company has not experienced any losses due to employee theft. Cala saves the entire amount of the bonding insurance premium by dropping the bonding insurance.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.