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(s marks available) Listed below are three errors or problems which might occur in the processing of cash transactions. Also shown is a list of
(s marks available) Listed below are three errors or problems which might occur in the processing of cash transactions. Also shown is a list of internal control principles. Evaluate each possible error and cite a principle that is listed that would reduce the probability of the error occurring. If none of the principles given will correct the problem, write "None." If you think more than one principle is appropriate, list all principles that apply. Possible Errors or Problems are given below: 1. A small fire destroys 3 days of cash receipts. 2. The official designated to sign checks is able to steal blank checks and issue them without fear of detection. 3. A salesclerk in serving customers often rings up a sale for less than the actual amount and then keeps the additional cash collected from the customer. Internal Control Principles a. Establishment of responsibility b. Segregation of duties c. Physical controls d. Documentation procedures e. Independent internal verification f. Human resource controls
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