CHAPTER 9

Question 1

Why controls over recording payment is important ?

Answer 1

To prevent fraud & ensure completeness

Question 2

How to avoid fraud in recording payments ?

Answer 2

1) All payments must be authorised
2) Check against supporting documentation
3) Person write the cheque ≠ recording payment in BGLA
4) Minimum number of cheque books is in use (1 is ideal)

Question 3

Controls to ensure completeness

Answer 3

1) Regular bank reconciliation
2) Issue cheque in sequence
3) Sequence check done by not usual person who record them
4) Regular examinations of bank statement

Question 4

Cancelled cheque must be retained ?

Answer 4

YES - evidence it doesn’t fall into wrong hands

Question 5

Automated credit system

Answer 5

Operate the electronic transfer of funds between accounts within the banking system/automated clearing system

Question 6

What uses automated credit system?

Answer 6

• Standing order
• Direct debit
• Salaries
• Wages
  (BACS)
• One-off payment

Question 7

Advantage of automated credit system

Answer 7

Very reduced amount of paperwork

Question 8

CHAPS?

Answer 8

Clearing House Automated Payment System