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You are given a well-recognized procedure of internal control. You are to identify the irregularity that will be discovered or prevented by each procedure. The
You are given a well-recognized procedure of internal control. You are to identify the irregularity that will be discovered or prevented by each procedure.
The voucher system requires that invoices be compared with receiving reports and express bills before a voucher is prepared and approved for payment.
- Unrecorded checks appear in the bank statement
- The treasurer takes funds by preparing a fictitious voucher charging "Miscellaneous General Expenses"
- An employee in the purchasing department sends through fictitious invoices and receives payment
- A cash shortage is covered by underfooting outstanding checks on the bank reconciliation
- A cash shortage is covered by omitting some of the outstanding checks from the bank reconciliation
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