Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Stop-a-Second is preparing its assessment of internal controls for the annual financial statements. The managers verify the employees have sufficient segregation of duties and supervision.

image text in transcribed
Stop-a-Second is preparing its assessment of internal controls for the annual financial statements. The managers verify the employees have sufficient segregation of duties and supervision. However, because the company is quite large, all lower-level employees cannot be supervised at all times to ensure that theft and fraud does not occur. To which limitation of internal controls does this relate? ASC requires that all cashiers receive a cash drawer with exactly $40 before each shift. During each sale, the cashier is prompted to input the type and amount of each payment. The cash register's screen is usually visible to customers, but the cashier on shift likes to face it toward him due to his bad eyesight. He also has a bad memory, which causes him to forget to give customers their receipts at times. ASC is a small store with many regular customers, so they all trust the cashier is giving them the correct change. Identify any problems in the cash receipts controls that ASC may have. Stop-a-Second is preparing its assessment of internal controls for the annual financial statements. The managers verify the employees have sufficient segregation of duties and supervision. However, because the company is quite large, all lower-level employees cannot be supervised at all times to ensure that theft and fraud does not occur. To which limitation of internal controls does this relate? ASC requires that all cashiers receive a cash drawer with exactly $40 before each shift. During each sale, the cashier is prompted to input the type and amount of each payment. The cash register's screen is usually visible to customers, but the cashier on shift likes to face it toward him due to his bad eyesight. He also has a bad memory, which causes him to forget to give customers their receipts at times. ASC is a small store with many regular customers, so they all trust the cashier is giving them the correct change. Identify any problems in the cash receipts controls that ASC may have

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_2

Step: 3

blur-text-image_3

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

Audit And Accounting Guide State And Local Governments

Authors: AICPA

1st Edition

1945498587, 978-1945498589

More Books

Students also viewed these Accounting questions