The treasurer of a local not-for-profit organization was found guilty today of defrauding the organization of thousands

Question:

The treasurer of a local not-for-profit organization was found guilty today of defrauding the organization of thousands of dollars. Among the individual's many responsibilities were the recording of cash deposits, the writing of cheques, and the preparation of the bank reconciliation. A member of the organization suspected wrongdoing when the treasurer reported total cash collections of $2,800 regarding the sale of non sequentially numbered raffle tickets; the member submitted $1,600 to the treasurer and knew that other members had collectively sold in excess of $3,000. The police were consulted and an investigation revealed that not only had the treasurer pocketed an undisclosed amount of cash over a two-year period but he had also made cash withdrawals from the bank and destroyed the debit memos when returned with the bank statement.
a. What three basic guidelines regarding a good system of internal control for cash were not observed?
b. What corrective action should the organization take in the future?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Fundamental Accounting Principles

ISBN: 978-0071051507

Volume I, 14th Canadian Edition

Authors: Larson Kermit, Tilly Jensen

Question Posted: