A control matrix that includes a control plan, which helps to accomplish control goals. Introduction: Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.

Question

Match each of the following cash payment activities to the internal control principle to which itbest relates. Enter the appropriate letter in the space provided.1. The business manager has the only key to thecheck-signing equipment.2. The purchasing manager orders all goods andservices for the business.3. A bank reconciliation is prepared monthly.4. Prenumbered checks are used for all payments.5. The company asks suppliers to deliver their merchandise to the warehouse but mail their invoicesto the accounting department.A. Establish responsibilityB. Segregate dutiesC. Restrict accessD. Document proceduresE. Independently verify

Answer 1

Question

Chapter 9, Problem 1P

a)

Summary Introduction

To prepare: A control matrix that includes a control plan, which helps to accomplish control goals.

Introduction:

Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.

b)

Summary Introduction

To annotate: The given system flowchart.

Introduction:

Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.

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Match each of the following cash payment activities to the internal control principle to which itbest relates. Enter the appropriate letter in the space provided.1. The business manager has the only key to thecheck-signing equipment.2. The purchasing manager orders all goods andservices for the business.3. A bank reconciliation is prepared monthly.4. Prenumbered checks are used for all payments.5. The company asks suppliers to deliver their merchandise to the warehouse but mail their invoicesto the accounting department.A. Establish responsibilityB. Segregate dutiesC. Restrict accessD. Document proceduresE. Independently verify

The following is the description of cash disbursements system of Two Symbols Limited:Upon receipt of the documents from accounts payable department, the cash disbursements clerk filesthe documents until their payment due date. On the due date, the clerk prepares a cheque for theinvoiced amount, which is sent to the treasurer who signs it and mails back to the supplier.The cash disbursement clerk then updates the cheque register, accounts payable ledger, and accountspayable control account from the clerk’s terminal. Finally, the clerk files the invoice and copy ofpurchase order, receiving report, cheque in the department.Describe the internal control weakness in Two Symbols’ cash disbursements system and discuss therisk associated with the weakness.