Internal Controls Of Sales And Cash Business

First and foremost, the accounting system used should be updated. The case stated that the system was 30 years old and that prior accounting period transactions could not be locked down, which enabled internal control processes to be bypassed. Enhancing internal

Appendix A.2 also lists several factors that could provide opportunities for management/employees to commit fraud. One factor that could lead to fraud is if, “There is ineffective monitoring of management as a result of: domination of management by a single person or small group without compensating controls.” The auditors should have taken notice of the lack of controls and segregation of duties with respect to Phar-Mor’s

The auditor must assess the transactions for how much of a risk factor is involved. When reviewing these transactions, auditor must be able to review the internal controls of the company’s accounting personnel. The segregation of duties is associated with the safeguarding of an organization 's assets and the topic known as internal control. An example of the segregation of duties would be a company 's requirement that the bank statement for its checking

A few controls that an organization can look into to reduce the danger of cash receipts deception incorporate utilizing cash registers that include interior tapes that can't be altered, carrying out surprise asset counts and contrasting money receipt tapes with actual money within the drawer, encouraging clients to keep their receipts by expressing that they are needed for exchanges, consecutively numbering all money receipts and carrying out reconciliations and abstracting bond insurance on every worker taking care of money

15. Effective internal controls for cash include: A. B. C. D. making cash payments by prenumbered check. depositing cash in the bank on a timely basis. giving written cash receipts to customers as evidence of payment. all of these.

Required: Discuss Douglas and son’s internal control procedures related to cash receipts, nothing both weaknesses and strengths.

With every internal control weakness a company needs to identify either a control policy or control procedure that will help prevent error or fraud from occuring in the future. Based on my suggestions as to what weaknesses existed at Goodner Brothers, Inc. I have suggested the policies or procedures that could be implemented to help prevent future issues. The internal control I would implement to hinder employee access to the accounting system would be to secure all computer programs with individual usernames and passwords to prevent access from others. The bookkeeper should be the only employee with access to the accounting system and to test this procedure the company would need to try and access the software without a username and password. To monitor the storage warehouse situation, the company should install computer scanning systems and video cameras at each location to supervize whether tires are being scanned in and out upon delivery and pick-up and to determine who and when these transactions are taking place. Semi-annual reviews should be conducted by sales managers to evaluate their sales representative. In addition, strengthening the tone at the top mentality should lie in the hands of each owner by personally reviewing all sales managers to create a top down effect.

Getting an internal auditor into the government office was a great move on their part. We can now move forward in this case as we have established that fraud is taking place. The next steps that could be made it to pay close attention to the employees. Any suspicious behavior, such as a sudden eager to work till late at night, or even noticing bad habits like gambling or drug problems could lead someone to steal. Another way to aid against fraud is to control and intensify the paper trail. Make it difficult to be able to get away with cash without recording it and clearing it with someone

The final step in financial control is training your people. Everyone must be prepared to identify any irregular behavior. This behavior is not just with regards to the bookkeeping, but individuals whom are displaying signs of unexplained wealth, extreme changes in demeanor, or financial hardship, could be potential threats to the financial health of the organization because of illegal behavior or a propensity to such behavior. An anonymous whistle-blower program can help to provide employees with a way to report suspected colleagues for suspicious behavior without a fear of retaliation (Clevenger, 2009).

Cash is such an important current asset to a business, especially for the every day running of it, so ready access to cash is crucial. Therefore, every company must utilize safeguards to protect and manage their cash. An alarming statistic in one of The National Restaurant Association’s (NRA) reports shows that employee theft cost $8.5B to its members in 2007 – the equivalent of 4% of food sales. Furthermore, only 10% of employees do not commit fraud in any situation, while 5% do commit fraud, and the other 85% will actually consider

“Internal controls are policies and procedures put in place to ensure the continued reliability of accounting systems” (Ingram 2017). WorldCom’s attempts at maintaining internal controls are less than favorable. Segregation of duties enables the division responsibilities to ensure that no employee completes two similar tasks. The CEO’s monitoring of WorldCom’s financial processes shows that the company has a lax segregation of duties, which makes it easier to commit fraud. Access controls protect financial data from unauthorized access, however, WorldCom’s extent is password-protected computers. No access inventories are taken to monitor employee usage, so there is no trail of when employees are doing during work.

Since the beginning of the Fall 2016 semester, we have covered a great deal of information in our information assurance class. We defined information security and discussed topics such as why we need security, the legal, ethical, and professional issues involving information security, managing and mitigating risks, how to effectively plan for security, tools such as intrusion detection and prevention systems, cryptography, physical

A business can not work out without an account system, which includes internal. Internal controls are used by companies to make sure financial information is accurate and valid. Strong internal controls are signs of a financially healthy company and protect the company’s integrity. Strong internal controls can also increase a company’s profitability. There are several types of internal controls that companies used to protect themselves such as: Segregation of duties, asset purchases, supervisor review, internal audits and adequate documents and records. This paper will discuss several topics from a case study about And the Fraud

Finally, we also observed that the cashier deposits mail receipts in the bank weekly. The internal storage of cash on the premises of the Company is not advisable for obvious reasons- theft, robbery, and unauthorized access. Employees with other intentions can alert external cohorts to raid or rob the Company at night or at another time to gain access to the cash stored on the premises. Additionally, the storage of the cash on the premises presents a "working hazard" for the employees as outsiders wanting to gain access to the cash may subject them to unwanted raids. The use of a bank on a daily basis contributes significantly to good internal control over cash. The company can safeguard the cash on a daily basis by using a bank as a depository and

INTERNAL CONTROL AND FRAUD DETECTION IN THE BANKING INDUSTRY (A CASE STUDY OF GUARANTEE TRUST BANK PLC)