ACC201-HW5

ACC201-HW5 - 6-1A For each of these five separate cases,...

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6-1A For each of these five separate cases, identify the principle(s) of internal control that is violated. Recommend what the business should do to ensure adherence to principles of internal control. 1. Chi Han records all incoming customer cash receipts for his employer and posts the customer payments to their respective accounts. In this case, this violates the principle of “Separate recordkeeping from custody of assets.” The company should employ another person to post the payments to the customer’s accounts because a person with control over the physical cash will be less likely to commit theft or fraud if they know another person has to keep its records. 2. At Tico Company, Jenn and Kirsten alternate lunch hours. Jenn is the petty cash custodian, but if someone needs the petty cash when she is at lunch, Kirsten fills in as custodian. This scenario violates the “Divide responsibility for related transactions” principle, or separation of duties. A company should have an independent person to control the petty cash fund, this will prevent less mishaps or duplicate transactions. 3.
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ACC201-HW5 - 6-1A For each of these five separate cases,...

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