Accounting Information System and Special Journals Checkpoint
Internal Control and Bank Reconciliations
Athena Jackson
ACC/225
November 10, 2013
Scott Flynn
Problem 8-1A
1. The principle of internal control violation is separation of duties. The person that records the incoming cash receipts should not be the same person that is posting the customer payments to their accounts. My recommendation to the business would be that they have one person recording the incoming cash receipts, and they should assign another employee to take over posting the customer payments to the right accounts. This will ensure that payments will get posted to the right accounts, and reduce errors.
2. The principle of internal control violation is establishment of responsibility. Jeff is the custodian of the petty cash fund, and he should be the only one responsible for that petty cash fund. My recommendation for the company would be for another petty cash fund to be established for Jose when he is needed to fill in as custodian. This will ensure that if something should happen with that petty cash fund, Jeff will not be held responsible for Jose’s mistakes. Therefore, if Jose makes a mistake as custodian of his own petty cash fund, he will be the one held responsible.
3. The principle of internal control violation is applying technological controls. It’s always best that a company backup any company records; however, it is not a good for a company to store everything in the same place. My recommendation would be for the company to have all the records backed up at night as usual, and request Nadine to take the tape home with her every night. That way is something disastrous happened overnight she is able to recover all accounts with the backup tape she has taken home.
4. The principle of internal control violation is performing regular and independent reviews. A regular and independent review should always be done whether an employee is or not meeting all job requirements to satisfactory.
Athena Jackson
ACC/225
November 10, 2013
Scott Flynn
Problem 8-1A
1. The principle of internal control violation is separation of duties. The person that records the incoming cash receipts should not be the same person that is posting the customer payments to their accounts. My recommendation to the business would be that they have one person recording the incoming cash receipts, and they should assign another employee to take over posting the customer payments to the right accounts. This will ensure that payments will get posted to the right accounts, and reduce errors.
2. The principle of internal control violation is establishment of responsibility. Jeff is the custodian of the petty cash fund, and he should be the only one responsible for that petty cash fund. My recommendation for the company would be for another petty cash fund to be established for Jose when he is needed to fill in as custodian. This will ensure that if something should happen with that petty cash fund, Jeff will not be held responsible for Jose’s mistakes. Therefore, if Jose makes a mistake as custodian of his own petty cash fund, he will be the one held responsible.
3. The principle of internal control violation is applying technological controls. It’s always best that a company backup any company records; however, it is not a good for a company to store everything in the same place. My recommendation would be for the company to have all the records backed up at night as usual, and request Nadine to take the tape home with her every night. That way is something disastrous happened overnight she is able to recover all accounts with the backup tape she has taken home.
4. The principle of internal control violation is performing regular and independent reviews. A regular and independent review should always be done whether an employee is or not meeting all job requirements to satisfactory.