Ch 14 - Internal control

Question 1

What are internal control procedures?

Answer 1

system in place within a business that protects the cash and assets

Question 2

What are the types of internal control procedures?

Answer 2

• Separation of duties
• Rotation of duties
• Random checking
• Accurate record keeping
• Physical protection of assets

Question 3

What is separation of duties?

Answer 3

Have several staff involved in any one process to reduce opportunities for staff to commit fraud

Question 4

What is rotation of duties?

Answer 4

Rotation of duties of employees occasionally to prevent situations of fraud

Question 5

What is random checking?

Answer 5

Carrying out checks without warning to ensure no goods or money are missing

Question 6

What is accurate record keeping?

Answer 6

ensuring that all records and references to source documents are up do date and accurate

Question 7

What is physical protection of assets?

Answer 7

Things such as security cameras and alarm systems

Question 8

What do managers need to consider in their internal control procedures?

Answer 8

Ethical ramifications

Question 9

What are some procedures of asset control for cash? (get at least 4)

Answer 9

• all cash receipts are evidenced when accepting EFTPOS
• clearing cash registers regularly
• two staff members should clear registers together
• don’t leave large sums of money
• don’t make payments using cash register cash
• multiple staff bank earnings or use a security firm

Question 10

What are some options of asset control?

Answer 10

• employing security personal
• security tags
• dye bombs
• video surveillance
• electronic security gates
• two way mirrors

Question 11

What are the ethical concerns to consider in asset control?

Answer 11

• customers right to privacy
• must monitor inappropriately
• consider if the security is required