Hall Cases Essay

September 15, 2017 Sports

INTERNAL CONTROL CASES
1. Solution Smith’s Market

a ) . B ) See diagrams on the undermentioned pages.

degree Celsiuss ) Internal Control Weaknesses

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1 ) Entree to the hard currency shortss by gross revenues clerks requires more answerability. Each drawer is accessed by assorted clerks throughout the twenty-four hours and hard currency may be withdrawn by any of them.

2 ) The internal hard currency registry tape should be used as a control to find how much hard currency ( including cheques. and recognition card verifiers ) should be in the registry drawer.

3 ) The displacement supervisor does non subscribe for the specific sum of hard currency received or returned at the terminal of the twenty-four hours. He merely logs the shortss in and out.

4 ) The exchequer clerk is unsupervised in the numeration of hard currency.

5 ) The exchequer clerk has plus detention and duty for entering gross revenues and hard currency in the diary and General Ledger. vitamin D )

2. Solution to Spice is Right

a ) . B ) . See diagrams on the undermentioned pages.

degree Celsiuss ) Internal Control Weaknesses

1 ) No recognition cheque

2 ) Inventory control map is performed by warehouse clerk.

3 ) Accounting section measures client. updates the AR history. and records
gross revenues in the Gross saless Journal therefore cut downing the chance to observe disagreements between entire gross revenues and AR posters.

4 ) Customer is billed before order is really shipped

5 ) Remittance List should be prepared in the mailroom

6 ) No diary voucher prepared by hard currency grosss clerk.

7 ) Cash grosss clerk does non fix a sedimentation faux pas.

vitamin D ) IT Controls for Basic Technology System

vitamin E ) Flowchart of revised system

Student responses will change for this portion of the assignment. The undermentioned issues. nevertheless. necessitate to be addressed. Upgrade stand-alone computing machines to a networked environment
The internal control jobs already covered that demand to be corrected in the new system.

3. Solution to ABE Plumbing

a ) . B ) See diagrams on the undermentioned pages.

degree Celsiuss ) Internal Control Weaknesses

1 ) No Credit cheque is performed.
2 ) The gross revenues clerk closes the unfastened gross revenues order doing the sale to be recorded before the goods are really shipped. 3 ) The warehouse clerk has plus detention and should non besides update the stock list records. 4 ) The transportation clerk does non accommodate the stock release with the original order. This allows for the incorrect points and or measures to be shipped. 5 ) Customer is billed before the goods are shipped. Billing should be triggered by transporting notice. Alternatively. the client bill is printed from the closed gross revenues order. which was prepared before the goods were shipped.

vitamin D ) Flowchart of revised system
Student responses will change for this portion of the assignment. The undermentioned issues. nevertheless. necessitate to be addressed. The internal control jobs already covered that demand to be corrected in the new system. A system constellation similar to calculate 4-18 would be appropriate.

4. Solution to Walker Books

a ) . B ) . See diagrams on the undermentioned pages.

degree Celsiuss ) Internal Control Weaknesses

Gross saless Processing:

1 ) The recognition cheque is performed by the gross revenues representative

2 ) The gross revenues section should non be maintain the gross revenues diary

3 ) The warehouse should non be updating inventory subordinate leger
Cash Receipts

4 ) Mail room workers have entree to both cheque and remittal advices. This state of affairs require a decreased span of control and separate mail room processs for client payments vs everyday mail.

5 ) The histories receivable clerk has entree to both the cheques and the client histories

vitamin D ) IT Controls for Basic Technology System

vitamin E ) Revised System Walker Books System

Student responses will change for this portion of the assignment but should
address the internal control issues already covered. 5. Solution to AV Safety. Inc. a ) . B ) . vitamin D ) See diagrams on the undermentioned pages.

degree Celsiuss ) Internal Control Weaknesses
1 ) No recognition cheque is performed
2 ) Gross saless diary is updated before the goods are shipped
3 ) Warehouse clerk has entree to stock list and besides update the stock list leger 4 ) Mailroom clerk has entree to both the remittal advice and the cheques. no remittal list Idaho prepared. 5 ) AR clerk has entree to both the cheques and the remittal advices


vitamin D ) IT Controls for a Basic Technology System

vitamin E ) Student responses will change for this portion of the assignment. but should turn to the internal control issues identified above.

6. Solution to Premier Sports Memorabilia

a ) . B ) . vitamin D ) See diagrams on the undermentioned pages.

degree Celsiuss ) Internal Control Weaknesses
1 ) Transaction is recorded in Gross saless Journal before goods are shipped. 2 ) Warehouse and Shipping maps are combined. This removes control over picking and transporting the incorrect merchandises. 3 ) Mail room clerk should fix a remittal list to command remittal advices and cheques 4 ) Although non stated in the instance as aproblem. the hearer should measure web entree controls ( watchwords. entree privileges ) to guarantee a proper segregation of responsibilities

vitamin D ) IT Controls

vitamin E ) Student solutions to this portion of the instance will change. The solution should turn to the control issues identified in portion C.

7. Solution to Bait ‘n Reel

a. b. and e. see pages that follow

degree Celsiuss )

Internal Control Weaknesses
1 ) The gross revenues clerk performs the recognition cheque this is a segregation of responsibilities and dealing mandate job. 2 ) Warehouse should non update the stock list and General ledger control histories. 3 ) AR Clerk should non update the general leger.

4 ) Charge and AR are combined. This construction will dissemble disagreements between what was billed and what was recorded as a sale. 5 ) Supervision is needed in the mailroom because employees who open the mail have entree to both hard currency and the remittal advice. 5 ) The hard currency grosss clerk has entree to the assets ( hard currency ) and is responsible for updating the general leger. 6 ) See 3 above.

vitamin D ) It Controls

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