A.The accounting system was not adequate to detect the fraud. B. The cash collec

Question

A.The accounting system was not adequate to detect the fraud.
B. The cash collection clerks should have been at least four in number, one for each area-east, west, north, south.
C. The cash collection clerks should have been made responsible for depositing the cash in the bank.
D. The supervisor was responsible for handling the cash, preparing the cash count sheet, and depositing cash in the bank.
E, The supervisor was not professionally qualified to account for the cash.

After several months, LRC’s supervisor is arrested for stealing nearly $10,000 from the company.
Identify the internal control weakness that allowed this theft to occur.

A.The accounting system was not adequate to detect the fraud.
B. The cash collection clerks should have been at least four in number, one for each area-east, west, north, south.
C. The cash collection clerks should have been made responsible for depositing the cash in the bank.
D. The supervisor was responsible for handling the cash, preparing the cash count sheet, and depositing cash in the bank.
E, The supervisor was not professionally qualified to account for the cash.

Explanation / Answer

Answer. A

The accounting system was not adequate to deduct fraud.

A company shall keep their financial records computerized accounting environment by using information technology.

The good accounting system report on financial performance and cash flow of businesses and performance of an organisation this information is used by management for decision making purpose

In the above case even the fraud of cash by supervisor is taken place it taken several months to detect such fraud and to take appropriate action this is mainly due to deficiency in the accounting system

Even though the cash collection are to be taken and deposited in the bank account in one of the good internet system but the same should not be carried out by supervisor

Thank you hope my judgement my reach your expectations

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