Selection of Effective Extended Procedures. The following lettered items are some “suspicions,” and you have been requested to select some effective procedures designed to confirmor repudiate the suspicions.a. The custodian of the petty cash fund may be removing cash on Friday afternoon to payfor weekend activities.b. A manager noticed that eight new vendors had been added to the purchasing department’s approved list after the assistant purchasing agent was promoted to purchasingmanager three weeks ago. The manager suspects all or some of them might be fictitiouscompanies set up by the new purchasing manager.c. The payroll supervisor may be stealing unclaimed paychecks of people who quit workand do not pick up the last check.d. Although no customers have complained, cash collections on accounts receivable aredown. The counter clerks may have stolen customers’ payments.e. The cashier may have “borrowed” money, covered it by holding each day’s deposit untilcash from the next day(s)’s collection is enough to make up the shortage from an earlierday, and then send the deposit to the bank.Required:Write the suggested procedures for each case in definite terms so another person will knowwhat to do
Selection of Effective Extended Procedures. The following lettered items are some “suspicions,” and you have been requested to select some effective procedures designed to confirm
or repudiate the suspicions.
a. The custodian of the petty cash fund may be removing cash on Friday afternoon to pay
for weekend activities.
b. A manager noticed that eight new vendors had been added to the purchasing department’s approved list after the assistant purchasing agent was promoted to purchasing
manager three weeks ago. The manager suspects all or some of them might be fictitious
companies set up by the new purchasing manager.
c. The payroll supervisor may be stealing unclaimed paychecks of people who quit work
and do not pick up the last check.
d. Although no customers have complained, cash collections on
down. The counter clerks may have stolen customers’ payments.
e. The cashier may have “borrowed” money, covered it by holding each day’s deposit until
cash from the next day(s)’s collection is enough to make up the shortage from an earlier
day, and then send the deposit to the bank.
Required:
Write the suggested procedures for each case in definite terms so another person will know
what to do
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