acc321internalcontrols - Receiving clerks should not be...

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ACC 321 Internal Controls HW Daniel Wardle 1. The salespeople, who work on commission, are in charge of approving credit. This could lead them to approve bad credit in order to collect a commission which would increase the company’s bad debt. A separate employee should be in charge of credit approval. 2. The computer sometimes reports an item being in stock when it is in fact not. One explanation is that warehouse employees are stealing items. A better system of inventory security is needed. 3. Receiving clerks are allowed to help pick items. This could lead to them destroying picking tickets and pocketing the cash receipt without a paper trail.
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Unformatted text preview: Receiving clerks should not be allowed to handle picking tickets. 4. Barbie tells the shipping clerk the customer information. This could cause errors, leading to wrong shipping or billing addresses and potentially turning away customers. All data should be entered from a source document. 5. Checks are left in a bin outside Bills office. This puts them at a great risk of being lost or stolen. Checks should be kept locked until deposited. 6. Ritchie is responsible both for recording cash receipts and depositing them. This gives him an opportunity to embezzle. Recording and depositing should be performed by two separate employees....
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This note was uploaded on 10/20/2011 for the course ACC 321 taught by Professor Dunn during the Spring '11 term at Michigan State University.

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