each of these five separate cases, identify the principleis) of internal control
ID: 2574945 • Letter: E
Question
each of these five separate cases, identify the principleis) of internal control that is violated. Recommend what the business p 1. Latisha Tally is the company's computer specialist and oversees its computerized payroll system. Her nd what the business should do to ensure adherence to principles of internal control boss recently asked her to put password protection on all office computers. Latisha has put a password in place that allows only the boss access to the file where pay rates are changed and personnel are 2. Marker Theater has a computerized order-taking system for its tickets. The system is active all week 3. Sutton Company has two employees handling acquisitions of inventory. One employee places pur- 4. The owner of Super Pharmacy uses a check protector to perforate checks, making it difficult for added or deleted from the payroll. and backed up every Friday night. chase orders and pays vendors. The second employee receives the merchandise. anyone to alter the amount of the check. The check protector is on the owner's desk in an office that contains company checks and is normally unlocked 5. Lavina Company is a small business that has separated the duties of cash receipts and cash disburse- ments. The employee responsible for cash disbursements reconciles the bank account monthlyExplanation / Answer
1.Split Related Party Responsibility-It is important that different employees each perform the separate tasks making up the transaction. This ensures that more than one person was involved in completing the task, increasing the odds that any mistakes or fraudulent acts are discovered.(no monopoly)
2.Record Keeping- Memory is not an infallible tool, especially when dealing with large amounts of information or transactions. Having correct record-keeping procedures will enable companies to have an accurate history of transactions on hand. Such historical data allows for the company to refer to it later, if a problem is discovered or if clarification is necessary.
3.Establishment of responsibility- Assigning responsibility to specific employees. Control is most effective when only one person is responsible for a given task.
4.Physical Control- Relates to the safeguarding of assets and enhance the accuracy and reliability of the accounting records.
5. Human Resource Control- Companies should bond employees who handle cash, rotate employees duties and require employees to take vacations, and conduct thorough background checks
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