Red Bluff Inn Establishing Internal Controls

Auditing Cases: An Interactive Learning Approach (4th Edition)

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Establishing Internal Controls There are four basic things that you can do in implementing an internal system of controls: Screen applicants before they are hired. Periodically examine canceled checks to see if there is anything unusual. Take precautions in preparing payroll: have more than one person prepare it, have several different people prepare it, or oversee it yourself. Have two people sign off on checks, preferably in front of each other. While there is no foolproof system of accounting or internal control that will absolutely prevent employee dishonesty losses, an environment can be created where employee pilfering is discouraged. The first step is to review every area where potential dishonesty problems could arise, including: inventory control data processing purchasing receiving bookkeeping cash disbursements The next step would entail setting the mechanisms in place to remove the temptations that could make an otherwise honest employee dishonest. In setting up an internal audit system, it's common procedurally for most companies to divide financial
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Red Bluff Inn Establishing Internal Controls - Establishing...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online