At their request, a few members are furnished prenumbered predated envelopes in which to insert their weekly contributions. The head usher removes the cash from the envelopes to be counted with the loose cash included in the collection and discards the envelopes No record is maintained of issuance or return of the envelopes, and the envelope system is not encouraged.   a. What are the control weaknesses you noted? b. Give internal control activities to prevent/detect/correct the said weaknesses.

Indicate whether the following statements are true or false. A guideline for safeguarding cash is to separate the duties of those who have custody of cash from this who keep cash records. Choose... + A guideline for safeguarding cash is that all cash receipts be deposited monthly or yearly. Choose... Separation of duties eliminates the possibility of collusion to steal an asset and hide the theft from the records. Choose... + A voucher system of control is a control system exclusively for cash receipts Choose...

Whole Fruits Market took the following actions to improve internal controls. For each of the following actions, identify the internal control principle the company followed. a. Prohibit the recordkeeper from having control over cash. b. Purchased an insurance (bonding) policy against losses from theft by a cashier. c. Each cashier is designated a specific cash drawer and is solely responsible for cash in that drawer. d. Detailed records of inventory are kept to ensure items lost or stolen do not go unnoticed. e. Digital time clocks are used to register which employees are at work at what times. f. External auditors are regularly hired to evaluate internal controls.

For each of the following independent situations, indicate whether there is an apparent internal control weakness, and, if one exists, suggest alternative procedures to eliminate the weakness. 1. John Smith is the petty cash custodian. John approves all requests for payment out of the $200 fund, which is replenished at the end of each month. At the end of each month, John submits to his supervisor a list of all accounts and amounts to be charged, along with supporting documentation. Once the supervisor indicates approval, a check is written to replenish the fund for the total amount. John's supervisor performs surprise counts of the fund to ensure that the cash and/or receipts equal $200 at all times. 2. All of the company's cash disbursements are made by check. Each check must be supported by an approved voucher, which is in turn supported by the appropriate invoice and, for purchases, a receiving document. The vouchers are approved by Dean Leiser, the chief accountant, after…

Rolling Hills Ltd. has the following internal controls over cash payments. Identify the control activity that is applicable to each procedure. 1. 2. 3. 4. 5. 6. Company cheques are prenumbered. The bank statement is reconciled monthly by the assistant controller. Blank cheques are stored in a safe in the controller's office. Both the controller and the assistant controller are required to sign cheques or authorize electronic payments. Cheque signers are not allowed to record cash payments. All payments are made by cheque or electronic transfer. Assignment of responsibility Review and reconciliation Segregation of duties Physical controls Documentation

In the case of The Canny Cashier, name one control that could have revealed signs of the embezzlement.

The sales of $2,000 made to Shanaya has been posted to the Sara’s account by mistake. It happened because a customer account number was incorrectly entered into the system. Explain what internal control procedure(s) would provide protection against this threat in future?

The following are deficiencies in internal controls over cash. a. When the cashier isn't available, Amy prepares both the deposit and opens the mail. b. The mail clerk may not prepare remittance advice for the A/R department if a customer does not submit a one with payment. c. Sometimes, the treasurer's department does not stop the supporting documents for cash disbursements. d. John handles both the customer correspondence concerning monthly statements and making the bank deposits. e. Mike handles incoming mail and also prepares bank reconciliations; however, the bank reconciliations are not done in a timely manner. For each deficiency: Determine what applicable audit procedure(s) should be conducted to identify whether any material misstatements exist Explain why you think this procedure is best for this situation. Consider each deficiency independently of the others. While each deficiency presents potential issues, identify two that stand out as the worse with your professional…

Which of the following reflects a weak internal control system? Please explain with full explanation.  a. All employees are well supervised. b. A single employee is responsible for comparing a receiving report to an invoice. c. All employees must take their vacations. d. A single employee is responsible for collecting and recording cash.

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