For each of these five separate cases, identify the principle of internal contro
ID: 2352231 • Letter: F
Question
For each of these five separate cases, identify the principle of internal control that is violated.Recommend what the business should do to ensure adherence to principles of internal control.
1. Heather Flatt records all incoming customer cash receipts for her employer and posts the customer payments to their respective accounts.
2. At Netco Company, Jeff and Jose alternate lunch hours. Jeff is the petty cash custodian, but if someone needs petty cash when he is at lunch, Jose fills in as custodian.
.
Explanation / Answer
(1)
There is no segregation of duties. The recording and posting of cash receipts should be done by different people.
(2)
The principle of authorisation is violated. Jeff is authorised as the petty cash custodian, but Jose IS NOT authorised to act on behalf of him. Jeff should not delegate his responsibility to Jose regarding petty cash custodian unless this is permitted by the senior manager.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.