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Below are descriptions of internal control problems. In the space provided, enter the number of the one best internal control principle that is related to
Below are descriptions of internal control problems. In the space provided, enter the number of the one best internal control principle that is related to the problem described. Cash shortages are not discovered because there are no daily cash counts by supervisors A clothing store is experiencing a high level of inventory shortages because people try on clothing and walk out of the store without paying for the merchandise Some cash payments are not recorded because checks are not prenumbered Three people handle cash sales from the same cash register drawer. Search 1. Establishment of responsibility 2. Segregation of duties 3. Physical controls 4. Documentation procedures 5. Independent internal verification EN < high level of inventory shortages because people try on clothing and walk out of the store without paying for the merchandise Some cash payments are not recorded because checks are not prenumbered Three people handle cash sales from the same cash register drawer The person who is authorized to sign checks approves purchase orders for payment The treasurer of the company has not taken a vacation for over 20 years 1. Establishment of responsibility 2. Segregation of duties 3. Physical controls 4. Documentation procedures 5. Independent internal verification 6. Human resource controls
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