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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

SERIES B EXERCISES

INTERNAL CONTROL COMPONENTS Four types of internal control activities are listed below. Describe each of them.

1. Segregation of duties

2. Authorization procedures and related responsibilities

3. Adequate documents and records

4. Protection of assets and records

To determine

Describe the four types of internal control activities.

Explanation

Internal control activities:

Control activities consist of policies and procedures that are established to assist the management in meeting its control objectives. Four types of control activities are listed below;

1. Segregation of duties:

Different employees must be assigned with the responsibility of performing different parts of a transaction. For example, one employee should be responsible for purchasing goods and the other employee must be responsible for receiving and keeping the goods in inventory.

2. Authorization procedures and related responsibilities:

Activities of business must be promptly authorized. It addition, it must be likely to recognize who is accountable for every activity that has occurred. For example, to acquire new machinery, a signed document must authorize the purchase later; the signed document indicates the person is responsible for the action...

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