In the following situation,which internal control procedure needs strengthening?
- At Hofstra Services,the junior accountant collects checks and cash from customers and records the transactions into the Journal.The controller approves the journal entries and bank reconciliations.The treasurer signs checks and approves contracts.
A) Assignment of responsibilities
B) Competent, reliable, and ethical personnel
C) Separation of duties
D) Documents

Question

Quizplus · Accepted Answer

The internal control procedure that needs strengthening is the separation of duties as the junior accountant is responsible for collecting checks and cash from customers, recording transactions into the Journal, and also for preparing bank reconciliations which could lead to errors and fraud if there is no separation of duties. It would be best if another employee is assigned to prepare bank reconciliations, and the junior accountant should not be allowed to approve them. Additionally, separate employees should be responsible for handling cash, recording transactions, and approving journal entries to ensure proper internal control measures are in place.

In the Following Situation,which Internal Control Procedure Needs Strengthening