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Unformatted text preview: E8-5
Listed below are five procedures followed by The Beat Company.
1. Several individuals operate the cash register using the same register drawer.
2. A monthly bank reconciliation is prepared by someone who has no other cash
3. Ellen May writes checks and also records cash payment journal entries.
4. One individual orders inventory, while a different individual authorizes payments.
5. Unnumbered sales invoices from credit sales are forwarded to the accounting department
every four weeks for recording.
Indicate whether each procedure is an example of good internal control or of weak internal
control. If it is an example of good internal control, indicate which internal control principle is
being followed. If it is an example of weak internal control, indicate which internal control
principle is violated. Use the table below.
Procedure IC Good or Weak Related Internal Control Principle 1. Weak Establishment of responsibility 2. Good Independent internal verification 3. Weak Segregation of duties 4. Good Segregation of duties 5. Weak Documentation procedures ...
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This note was uploaded on 10/11/2011 for the course ACC557 ACC557 taught by Professor Na during the Spring '10 term at Strayer.
- Spring '10