Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1) Describe weaknesses in this system, and for each weakness recommend at least one improvement to strengthen control procedures. The city of Van Nuys recently

1) Describe weaknesses in this system, and for each weakness recommend at least one improvement to strengthen control procedures.

The city of Van Nuys recently opened a private parking lot in its downtown area for the benefit of city residents.A guard has been hired to patrol the lot and to issue pre-numbered parking stickers to residents submitting an application form and showing evidence of residency.When the sticker is affixed to a car, the resident may park in the lot for twelve hours by placing four quarters in the parking meter.The guard not only inspects the stickers on all parked cars to determine that only residents are parking in the lot, but also looks at the time gauges to see that the necessary fee has been paid.The completed application forms are maintained in the guard's office.

By using a master key, the guard takes coins from the meters weekly and places then in a locked collection box.The guard delivers the box to the city storage department, where a clerk opens it, manually counts the coins, puts the cash in a safe, and records the total on a weekly cash report.This report is sent to the city's accounting department.The day following the cash count, the city treasurer picks up the cash and manually recounts it, prepares the deposit slip, and makes the deposit at the bank.The deposit slip, authenticated by a bank teller, is sent to the accounting department, where it is filed with the weekly cash report.

2) Explain the control policies and procedures that should normally be in place to prevent the problems described from occurring.

A programmer was hired by a local credit union that used a centralized microcomputer-based IT system.The programmer wrote a special subroutine that could only be activated by a command from the computer console. The computation of daily interest on savings deposit was programmed to truncate the calculations at the third decimal. The subroutine instructed the program to accumulate the truncated amounts and when batch processing of the daily interest calculation was completed, to credit the amount to the programmer's saving account.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial & Managerial Accounting

Authors: Jan Williams

16th Edition

78111048, 978-0078111044

More Books

Students also viewed these Accounting questions