Chapter 5 Homework Solutions.docx - M5–5 a Segregate duties – The cashiers should not have access to the cash and also be solely responsible for

Chapter 5 Homework Solutions.docx - M5–5 a Segregate...

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M5–5 a) Segregate duties – The cashiers should not have access to the cash and also be solely responsible for reconciling the cash register tape with the cash count summary. This would allow them to take some of the cash and understate the amount received and deposited. Internal control would be improved by limiting the cashiers’ responsibilities to only handling the cash (and preparing a cash count summary that is independently verified). b) Segregate duties – The accounting department should not have access to and responsibility for recording cash receipts. The receptionist should prepare the cash receipts list before cash receipts are forwarded to accounting. Accounting should compare the cash receipts list to the bank deposit to ensure all cash receipts actually were deposited. c) Independently verify – The accounting department does not compare cash register totals, cash count sheets, and bank deposit slips to ensure that all cash received is safely deposited in the bank. The accounting department should file each type of documentation by day and, when all have been received for a particular day, compare the amounts to verify that cash receipts have been deposited in the bank. d) Establish responsibility – If employees exchange jobs during a shift, no one will be able to identify who has committed errors that arise. Where possible, each duty should be assigned to only one employee. e) Segregate duties – With the responsibility for authorizing price changes, cashiers can reduce the amount charged for a cash sale and take that amount of cash without anyone detecting it. To improve this control, price changes should be authorized by someone other than a cashier.
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  • Fall '11
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