Solved

Match Each of the Followin Internal Control Principle with the Applicable

Question 219

Matching

Match each of the followin internal control principle with the applicable transactions that is being violated listed.

Premises:

Responses:

Cashiers have access to the cash register recorded tape or file.

Establish responsibility

A company uses a voucher system, but the cash disbursement clerk pays directly from invoices received.

Maintain adequate records

Only sales clerks use the cash registered, but they all share the same cash drawer.

Insure assets and bond employees

The bookkeeper prepares and signs checks and completes the bank reconciliation.

Separate recordkeeping from custody of assets

A restaurant allows servers to keep cash collected in their aprons and ring in all sales at the end of the night.

Divide responsibility for related transactions

A company fails to hire a CPA to perform an annual audit.

Apply technological controls

A company does not bond its key cash-handling employees.

Perform regular and independent reviews

A company has a single department that handles purchasing, receiving, and inventory management.

A large company has no internal auditor on staff.

A company manager keeps pre-signed checks in his desk drawer for employees to hand write when the accountant is out of the office.

Premises:

Cashiers have access to the cash register recorded tape or file.

A company uses a voucher system, but the cash disbursement clerk pays directly from invoices received.

Only sales clerks use the cash registered, but they all share the same cash drawer.

The bookkeeper prepares and signs checks and completes the bank reconciliation.

A restaurant allows servers to keep cash collected in their aprons and ring in all sales at the end of the night.

A company fails to hire a CPA to perform an annual audit.

A company does not bond its key cash-handling employees.

A company has a single department that handles purchasing, receiving, and inventory management.

A large company has no internal auditor on staff.

A company manager keeps pre-signed checks in his desk drawer for employees to hand write when the accountant is out of the office.

Responses:

Establish responsibility

Maintain adequate records

Insure assets and bond employees

Separate recordkeeping from custody of assets

Divide responsibility for related transactions

Apply technological controls

Perform regular and independent reviews

Correct Answer:

Premises:

Responses:

Cashiers have access to the cash register recorded tape or file.

A company uses a voucher system, but the cash disbursement clerk pays directly from invoices received.

Only sales clerks use the cash registered, but they all share the same cash drawer.

The bookkeeper prepares and signs checks and completes the bank reconciliation.

A restaurant allows servers to keep cash collected in their aprons and ring in all sales at the end of the night.

A company fails to hire a CPA to perform an annual audit.

A company does not bond its key cash-handling employees.

A company has a single department that handles purchasing, receiving, and inventory management.

A large company has no internal auditor on staff.

A company manager keeps pre-signed checks in his desk drawer for employees to hand write when the accountant is out of the office.