You have been assigned to review the payment system of an enterprise. The finance director suspects that some duplicate payments may have been made. List five control procedures which you would expect to find.
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You have been assigned to review the payment system of an enterprise. The finance
director suspects that some duplicate payments may have been made. List five control
procedures which you would expect to find.
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- Assume that management is gathering evidence as part of its process for assessing the effectiveness of internal control over financial reporting. The company is a manufacturer of high-dollar specialized Control Tested machines used in the medical profession. The following table identifies important controls that management is testing regarding accounts related to revenue recognition, accounts receivable, and other sales related activities. The first column describes the control, and the second column describes the test results. Based on the test results, determine the conclusion that management should likely make about the deficiency. (Is it a control deficiency, a significant deficiency, or a material weakness?)Segregation of Duties (SOD) is a basic building block of sustainable risk management and internal controls for a business. Which of the following statements is not a segregation of duties violation?A. The duties of Internal IT Developer of company is to write application programs and then perform required program maintenance when a problem occurs.B. The payroll administrator is distributing payroll checks to employees and recording cash receipts in the journal under supervision.C. The accounting clerk who recording cash receipts in the journal in the general ledger performs bank reconciliation to compare if there are any differences between cash transactions.D. The inventory warehouse clerk task is to maintain the inventory records with custody of physical assets inventory to manage asset identification, location and condition Explain why you choose your answer, and not the other (in max 200 words)Show how the role of governance structures, internal controls and compliance policies help in the prevention of financial fraud. NB: Site refrences
- The flowchart labeled Problem 14 depicts the responsibilities of an accounting clerk in a small company. Required Identify any control problems in the system. What sorts of fraud are possible in this system?Explain why each of the following combinations of tasks should or should not beseparated to achieve adequate internal control.a. Approval of bad debt write-offs and the reconciliation of the accounts receivablesubsidiary ledger and the general ledger control account.b. Distribution of payroll checks to employees and approval of employee time cards.c. Posting of amounts from both the cash receipts and the cash disbursements journalsto the general ledger.d. Writing checks to vendors and posting to the cash account.e. Recording cash receipts in the journal and preparing the bank reconciliation.Explain why each of the following combinations of tasks should or should no be separated to achieve adequate internal control. a. Approval of bad debt write-offs and the reconciliation of the AR subsidiary ledger and the GL Control Account. b. Distribution of payroll checks to employees and approval of employee time cards. c. Posting of amounts from both the cash receipts and the cash disbursement journals to the general ledger. d. Writing checks to vendors and posting to the cash account. e. Recording cash receipts in the journal and preparing the bank reconciliation. Please provide a clear explanation. *No plagiarism please*
- The given system flowchart elaborates the business activities involved in different departments, including (1) Sales Department, (2) Accounting Department, (3) Warehouse, (4) Shipping Department, and (5) Billing Department. The bottom part of this Figure indicates that the Sales Department sends the sales invoice to the Billing Department. Here, it is assumed that this sales invoice only contains non-financial information. What types of frauds are possible in this business environment? (long answers)Which of the following is an internal control activity that could prevent a paid disbursement voucher from being presented for payment a second time?a. Vouchers should be prepared by individuals who are responsible for signing disbursement checks.b. Disbursement vouchers should be approved by at least two responsible management officials.c. The date on a disbursement voucher should be within a few days of the date the voucher is presented for payment.d. The official who signs the check should compare the check with the voucher and should stamp “PAID” on the voucher documents.In reviewing the process procedures and internal controls of one of your audit clients, Steeplechase Enterprises, you notice the following practices in place.Steeplechase has recently installed a new computer system that affects the accounts receivable, billing, and shipping records. A specifically identified computer operator has been permanently assigned to each of the functions of accounts receivable, billing, and shipping.Each of these computer operators is assigned the responsibility of running the program for transaction processing, making program changes, and reconciling the computer log. To prevent any single operator from having exclusive access to the tapes and documentation, these three computer operators randomly rotate the custody and control tasks every 2 weeks over the magnetic tapes and the system documentation. Access controls to the computer room consist of magnetic cards and a digital code for each operator. Access to the computer room is not allowed to either the…
- Explain why each of the following combinations of task should or should not be separated to achieve adequate internal control. Approval of bad debts write-offs and the reconciliation of the AR subsidiary ledger and the GL control account. Distribution of payroll checks to employees and approval of employee time cards. Posting of amounts from both the cash receipts and the cash disbursement journal to general ledger. Writing checks to vendors and posting to the cash account. Recording cash receipts in the journal and preparing the bank reconciliation.Imagine that you have been hired to audit the sales and collections of a medium-to-large merchandising company. Suggest at least two ways that management could manipulate earnings and make specific recommendations for the internal control procedure to prevent or detect the transaction.For each of the following independent situations, indicate whether there is an apparent internal control weakness, and, if one exists, suggest alternative procedures to eliminate the weakness. 1. John Smith is the petty cash custodian. John approves all requests for payment out of the $200 fund, which is replenished at the end of each month. At the end of each month, John submits to his supervisor a list of all accounts and amounts to be charged, along with supporting documentation. Once the supervisor indicates approval, a check is written to replenish the fund for the total amount. John's supervisor performs surprise counts of the fund to ensure that the cash and/or receipts equal $200 at all times. 2. All of the company's cash disbursements are made by check. Each check must be supported by an approved voucher, which is in turn supported by the appropriate invoice and, for purchases, a receiving document. The vouchers are approved by Dean Leiser, the chief accountant, after…
