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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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Section
BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Communication

Wholesome and Happy Foods is a farm-to-family grocery store located in the Pacific Northwest. The company recently installed four self-checkout lanes that allow customers to scan their own groceries and pay for their purchases using an automated checkout kiosk. The kiosks are monitored by a single attendant. In recent weeks, management has become concerned that some customers are not scanning all of the items when using the self-checkout lanes.

Write a brief memo to your instructor suggesting features and capabilities for the kiosks that would serve as control procedures, ensuring that all items brought through the self-checkout lanes are properly scanned and purchased.

To determine

Internal Control: Internal control refers to the policies, and plans of the business organization along with other measures with a view to safeguard its assets, encourage the employees to adhere to the plans, to improve on the operational efficiency, and to ensure correct and reliable accounting information. Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations.

Five elements of internal control:

  • Control Environment: Control Environment refers to the attitude of top brass of the company or the corporate culture. The top brass of the company must set the tone to improve the morale for rest of the employees of the business.
  • Risk assessment: The business must be able identify the risk associated with it, and accordingly use the internal control to safeguard its assets and ensures fairness in presentation in accounting information.
  • Control procedures: The objective of setting the control procedure is to ensure that the business achieves its objectives.
  • Monitoring controls: The internal control used in the business is being monitored by the internal auditors who are hired by the business, to ensure that the employees are adhering to the policies of the business and running the operations efficiently. The external auditors on the other hand ensures that the business accounting records are being maintained in accordance with the Generally Accepted Accounting Principles (GAAP).
  • Information and communication: Information and communication system is important for a business and hence only authorized persons should be allowed the access to the confidential accounting information. Approvals are also should be made mandatory for the transactions by the control system.

Given: WH Company has installed self-check-out lanes.

To prepare: Brief memo to the instructor suggesting features and capabilities for K that serve as control procedure.

Explanation

Memo

To: The Instructor

From: Student

Re: Control Procedures for Self-Checkout Lanes

W and H Foods incorporates several features in to the kiosks that increase the customers’ likelihood towards scanning the items in the purchase.

Scanning system needs to be set and the beep from the system needs to be audible when sale is scanned and recorded. This beep alerts the user whether scanning is properly made or not...

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