AC 304 QX and QL – Module 7 Assignment (10 points): I. (5 points) For each of th

Question

AC 304 QX and QL – Module 7 Assignment (10 points): I. (5 points) For each of the process failures numbered 1 – 5: • Identify a control plan from the list below that best addresses that failure. It can be a preventive or detective control. Put the letter next to the number of the process failure rather than the name of the control plan. Each letter should be used only once, and you will have one letter left over. • Provide a brief explanation of your choice for each of the numbered items. List of Control Plans A. Automated time data entry B. Hash totals of employee ID numbers C. Programmed edit checks – reasonableness test D. Imprest payroll bank account E. Automated preparation of attendance time sheets for the next pay period (i.e., turnaround documents) F. Record counts of time sheets Process Failures 1. Sam has been with the company for 30 years and his eyesight has started to decline. However, he refuses to get glasses. As a result, when he is entering time attendance data, he is misreading 6’s for 8’s. This data is frequently processed against the wrong employees in the employee master data file since employee numbers can begin with either a 6 or 8. The company otherwise has a payroll system that works fine. It needs a control that can catch these errors. 2. Employees in a rush to prepare their manual time sheets in a small company are often causing errors because they are spelling their critical information incorrectly or transposing digits in their employee ID numbers. 3. Maria had a scam worked out where she would occasionally type in an extra “0” on the end of the hours worked field so that a few of her friends were paid for 350 hours of worked instead of 35. 4. Gamma Company has experienced problems with a lack of agreement between the cash that is transferred ahead of time to the bank account based on the journal entry provided for the payroll and payroll tax accruals and the amount that is debited to the various expense and asset accounts to distribute labor costs. 5. At Crimson, Company, time data entry clerks have not been doing a good job lately of making sure that the correctly completed time sheets that they receive from employees are actually entered into the system correctly. II. (5 points) Your text notes that all of the business processes we have studied feed data to the general ledger system. For each of the 5 business processes listed below: • Indicate which of the business events listed are activities within that business process (please use letters rather than descriptions of business events in your response) Business Processes 1. Purchasing 2. Billing/Accounts Receivable/Cash Receipts 3. Payroll 4. Order entry/Shipping 5. Accounts Payable/Cash Disbursements List of Business Events A. Payment is made to vendor on a purchase made on account B. Company deposits employer taxes at the bank C. Company asks for an allowance for box of broken lamps received from vendor D. Cash is received from a credit sale of merchandise E. Merchandise inventory is shipped to a customer F. Company writes off an account receivable that is deemed uncollectible G. Receiving dock employees unload goods from a vendor H. Customer sends a purchase order and our company creates a sales order I. Customer returns a sweater that is the wrong size J. Company accrues employer taxes

Explanation / Answer

Part 1

Failure Control Plan Remarks 1 A Error occurs when Sam enters time attendance data. If this system is automated, He need not enter data manually. 2 B Hash Total will tell whether any employee has entered wrong ID and make correcctive measures 3 E Under this system time hours will be entered automatically to attendence time sheet for pay purpose, requiring no manual entrry of data 4 C Programmed edit checks will help company ro ensure there are no mathematical or calculation errors, leading to matching of expense incurreed and payments made 5 F This will ensure whether all time sheets have been entered in system

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