ACC220_WK4_Assign_Int_Cash_Ctl - Internal Cash Control 1...

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Internal Cash Control 1 Internal Cash Control Student Name Axia College – University of Phoenix ACC220
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Internal Cash Control 2 CHAPTER 4 – Internal Cash and Control Scenario E4-5 (Pg. 194) – Idaho Co. (a) List the weaknesses in internal control over cash disbursements. The obvious problem in this scenario is that there is no security and the accounting system at Idaho Company is a perfect target for embezzlement. There are no checks and balances in place to keep the treasurer and purchasing agent honest. Opportunity abounds for misappropriation of funds and fraud that may not be discovered for quite some time due to the lack of proper procedures being followed. There should be only one designated employee responsible for paying bills. Checks should be numbered, require two signatures, and every transaction must be reviewed by another employee, preferably the accounting supervisor or manager. Payables and receivables should be reconciled on a daily basis, making it easier to find a mistake and rectify the erroneous entry quickly and efficiently. Additionally, the unnumbered checks are kept in an unlocked filing cabinet, making it quite easy for an unscrupulous employee to confiscate one or more for their own personal use. (b) Write a memo indicating your recommendations for improving company procedures.
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This note was uploaded on 04/09/2010 for the course ACC/220 ACC220 taught by Professor Mitzikent during the Summer '09 term at University of Phoenix.

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ACC220_WK4_Assign_Int_Cash_Ctl - Internal Cash Control 1...

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