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Determine whether each procedure described below is an internal control strength or weakness; then identify the internal control violated or followed for each procedure.

Determine whether each procedure described below is an internal control strength or weakness; then identify the internal control violated or followed for each procedure.

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter8: Fraud, Internal Controls, And Cash
Section: Chapter Questions
Problem 5MC: There are several elements to internal controls. Which of the following would not address the issue...
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Determine whether each procedure described below is an internal control strength or weakness; then identify the internal control violated or followed for each procedure. 1. The owner does not use ID scanners to limit access to expensive merchandise. Instead, the owner argues they hire honest employees. 2. Several salesclerks share the same cash drawer. 3. The company devotes resources towards keeping accurate accounting records for machinery. 4. The company does not allow employees with access to cash to modify accounting records. 5. Employees that handle easily transferable assets such as cash are bonded. Weakness or Strength 1. Weakness 2. Weakness 3. Strength 4. Strength 5. Strength Internal Control Principle Apply technological controls Establish responsibilities Maintain adequate records Separate recordkeeping from custody of assets Insure assets and bond key employees
Transcribed Image Text:Determine whether each procedure described below is an internal control strength or weakness; then identify the internal control violated or followed for each procedure. 1. The owner does not use ID scanners to limit access to expensive merchandise. Instead, the owner argues they hire honest employees. 2. Several salesclerks share the same cash drawer. 3. The company devotes resources towards keeping accurate accounting records for machinery. 4. The company does not allow employees with access to cash to modify accounting records. 5. Employees that handle easily transferable assets such as cash are bonded. Weakness or Strength 1. Weakness 2. Weakness 3. Strength 4. Strength 5. Strength Internal Control Principle Apply technological controls Establish responsibilities Maintain adequate records Separate recordkeeping from custody of assets Insure assets and bond key employees
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