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for all purchases from a specific vendor. 7.3. The following description represents the policies and procedures of a small charitable organization that grants subsidies to economically backward students in far-flung areas in China. The headquarters of the organization is in Hong Kong. Students in need of education subsidy approach the representatives of the organization. They write a statement of purpose elaborating on and justifying their need to the representatives, who then interview students. The representatives prepare a short report to the central committee of the organization for getting approval on the education subsidy. If it is approved, the sum is transferred to the selected student's bank account. Students are required to acknowledge the receipt of the educational subsidy by email. The committee members of this charitable organization work on a part-time basis. Usually, when the education subsidy is sent, it is monitored by a person called Thomas, who has business in China. The currency involved is Renminbi (RMB), which is not freely circulated outside China. Only limited amount of RMB is in circulation in Hong Kong, London, Singapore, and Taiwan. (This is called offshore RMB). After Thomas sends the money through his bank account in China to the students, the treasurer of the charitable organization reimburses him in Hong Kong dollars. The reimbursement is credited to his bank account in Hong Kong. The treasurer gets the reimbursement from the organization after some time. Charitable organizations are new in China, and are not allowed to open bank accounts there. REQUIRED Identify the internal control strengths and weaknesses of the subsidy and reimbursement process. You have to observe the restrictions of the limited flow of RMB. 7.4. The Gardner Company, a client of your firm, has come to

for all purchases from a specific vendor. 7.3. The following description represents the policies and procedures of a small charitable organization that grants subsidies to economically backward students in far-flung areas in China. The headquarters of the organization is in Hong Kong. Students in need of education subsidy approach the representatives of the organization. They write a statement of purpose elaborating on and justifying their need to the representatives, who then interview students. The representatives prepare a short report to the central committee of the organization for getting approval on the education subsidy. If it is approved, the sum is transferred to the selected student's bank account. Students are required to acknowledge the receipt of the educational subsidy by email. The committee members of this charitable organization work on a part-time basis. Usually, when the education subsidy is sent, it is monitored by a person called Thomas, who has business in China. The currency involved is Renminbi (RMB), which is not freely circulated outside China. Only limited amount of RMB is in circulation in Hong Kong, London, Singapore, and Taiwan. (This is called offshore RMB). After Thomas sends the money through his bank account in China to the students, the treasurer of the charitable organization reimburses him in Hong Kong dollars. The reimbursement is credited to his bank account in Hong Kong. The treasurer gets the reimbursement from the organization after some time. Charitable organizations are new in China, and are not allowed to open bank accounts there. REQUIRED Identify the internal control strengths and weaknesses of the subsidy and reimbursement process. You have to observe the restrictions of the limited flow of RMB. 7.4. The Gardner Company, a client of your firm, has come to

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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for all purchases from a specific vendor. 7.3. The following description represents the policies and procedures of a small charitable organization that grants subsidies to economically backward students in far-flung areas in China. The headquarters of the organization is in Hong Kong. Students in need of education subsidy approach the representatives of the organization. They write a statement of purpose elaborating on and justifying their need to the representatives, who then interview students. The representatives prepare a short report to the central committee of the organization for getting approval on the education subsidy. If it is approved, the sum is transferred to the selected student's bank account. Students are required to acknowledge the receipt of the educational subsidy by email. The committee members of this charitable organization work on a part-time basis. Usually, when the education subsidy is sent, it is monitored by a person called Thomas, who has business in China. The currency involved is Renminbi (RMB), which is not freely circulated outside China. Only limited amount of RMB is in circulation in Hong Kong, London, Singapore, and Taiwan. (This is called offshore RMB). After Thomas sends the money through his bank account in China to the students, the treasurer of the charitable organization reimburses him in Hong Kong dollars. The reimbursement is credited to his bank account in Hong Kong. The treasurer gets the reimbursement from the organization after some time. Charitable organizations are new in China, and are not allowed to open bank accounts there. REQUIRED Identify the internal control strengths and weaknesses of the subsidy and reimbursement process. You have to observe the restrictions of the limited flow of RMB. 7.4. The Gardner Company, a client of your firm, has come to
Transcribed Image Text:for all purchases from a specific vendor. 7.3. The following description represents the policies and procedures of a small charitable organization that grants subsidies to economically backward students in far-flung areas in China. The headquarters of the organization is in Hong Kong. Students in need of education subsidy approach the representatives of the organization. They write a statement of purpose elaborating on and justifying their need to the representatives, who then interview students. The representatives prepare a short report to the central committee of the organization for getting approval on the education subsidy. If it is approved, the sum is transferred to the selected student's bank account. Students are required to acknowledge the receipt of the educational subsidy by email. The committee members of this charitable organization work on a part-time basis. Usually, when the education subsidy is sent, it is monitored by a person called Thomas, who has business in China. The currency involved is Renminbi (RMB), which is not freely circulated outside China. Only limited amount of RMB is in circulation in Hong Kong, London, Singapore, and Taiwan. (This is called offshore RMB). After Thomas sends the money through his bank account in China to the students, the treasurer of the charitable organization reimburses him in Hong Kong dollars. The reimbursement is credited to his bank account in Hong Kong. The treasurer gets the reimbursement from the organization after some time. Charitable organizations are new in China, and are not allowed to open bank accounts there. REQUIRED Identify the internal control strengths and weaknesses of the subsidy and reimbursement process. You have to observe the restrictions of the limited flow of RMB. 7.4. The Gardner Company, a client of your firm, has come to
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