Accounting Information Systems
10th Edition
ISBN: 9781337619202
Author: Hall, James A.
Publisher: Cengage Learning,
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Question
Chapter 4, Problem 11P
a.
To determine
Explain the control weakness shown in the system flowchart.
b.
To determine
Determine the controls that need to be implemented into the system to mitigate the risks.
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Students have asked these similar questions
a. Identify the internal control weaknesses in the cash receipts process
b. For each weakness, describe the associated risks
c. For each weakness, provide a possible control activity
E7-3 The following control procedures are used in Keaton Company for over-the-counter
cash receipts.
1. Each store manager is responsible for interviewing applicants for cashier jobs. They
are hired if they seem honest and trustworthy.
2. All over-the-counter receipts are registered by three clerks who share a cash register
with a single cash drawer.
3. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked brief-
case in the stock room until it is deposited in the bank.
4. At the end of each day, the total receipts are counted by the cashier on duty and rec-
onciled to the cash register total.
5. The company accountant makes the bank deposit and then records the day's receipts.
i
o br 00
Imurlal LUnTUI amu give an example of each principle that
you might observe when picking up your pizza. (Note: It may not be possible to observe
all the principles.)
E7-3 The following control procedures are used in Keaton Company for over-the-counter
cash receipts.
List
oVE
im
1. Each store manager is responeible for interviewing applicants for cashier jobs. They
are hired if they seem honest and trastworthy.
2. All over-the-counter receipts are regisiered by three clerks who share a cash register
with a single cash drawer.
3. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked brief-
case in the stock room until it is deposited in the bank.
4. At the end of each day, the total receipts are counted by the cashier on duty and rec-
onciled to the cash register total.
5. The company accountant makes the bank deposit and then records the day's receipts.
(L
Chapter 4 Solutions
Accounting Information Systems
Ch. 4 - Prob. 1RQCh. 4 - Prob. 2RQCh. 4 - What function does the receiving department serve...Ch. 4 - Prob. 4RQCh. 4 - Prob. 5RQCh. 4 - Prob. 6RQCh. 4 - Prob. 7RQCh. 4 - Prob. 8RQCh. 4 - Prob. 9RQCh. 4 - Distinguish between an edit run, a sort run, and...
Ch. 4 - Prob. 11RQCh. 4 - Prob. 12RQCh. 4 - Prob. 13RQCh. 4 - Prob. 14RQCh. 4 - Prob. 15RQCh. 4 - Prob. 16RQCh. 4 - In a manual system, after which event in the sales...Ch. 4 - Prob. 18RQCh. 4 - What document initiates the billing process?Ch. 4 - Prob. 20RQCh. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - Prob. 5DQCh. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - What financial statement misrepresentations may...Ch. 4 - Prob. 10DQCh. 4 - Prob. 11DQCh. 4 - Prob. 12DQCh. 4 - Prob. 13DQCh. 4 - Prob. 14DQCh. 4 - Prob. 15DQCh. 4 - How is EDI more than technology? What unique...Ch. 4 - Prob. 17DQCh. 4 - Prob. 1MCQCh. 4 - Prob. 2MCQCh. 4 - Prob. 3MCQCh. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Prob. 6MCQCh. 4 - Prob. 7MCQCh. 4 - Prob. 8MCQCh. 4 - Prob. 9MCQCh. 4 - Prob. 10MCQCh. 4 - Prob. 1PCh. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7PCh. 4 - Prob. 8PCh. 4 - Prob. 9PCh. 4 - Prob. 10PCh. 4 - Prob. 11PCh. 4 - Prob. 12PCh. 4 - In 1989, Robert Smith opened a small fruit and...Ch. 4 - Posavek is a wholesale supplier of building...Ch. 4 - Prob. 3ICCCh. 4 - (Prepared by Will Richens and Michael Catchpole,...Ch. 4 - Prob. 6ICC
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Similar questions
- INTERNAL CONTROLS AND FLOWCHART ANALYSIS a. Identify the physical control weaknesses depicted in theflowchart for Problem 2.b. Describe the IT controls that should be in place in this system.arrow_forward35 clerks who receive and sort the general mail. Included in the mail are envelopes containing cus- tomer checks and remittance advices, which the clerks open to verify that the checks are signed and are constant in amount with the remittance advice. The checks and remittance advices are orga- nized into batches and sent to the AR department where the AR clerk reviews them for correctness, posts to the AR sub ledger. The clerk then prepares two copies of a remittance list. One of these is filed in the department along with the remittance advice and the other is sent to the cash receipts department with the checks. 4. SYSTEM DOCUMENTATION, RISK ANALYSIS, AND INTERNAL CONTROLS Upon receipt of the checks and remittance list, the cash receipts clerk reconciles the documents and post the checks to the cash receipts journal. At the end of the day, the clerk prepares a deposit slip and sends it along with the checks to the bank, Finally, the clerk summarizes the batch of cash receipts…arrow_forwardMa1. Control activities are the policies and procedures that help ensure that management directives are carried out and which are designed to prevent and detect fraud and error occurring. An example of a control activity is the maintenance of a control account. Explain any five internal control activities and describe measures of internal control you would recommend to ensure that cash receipts and resources are properly accounted for and managed.arrow_forward
- a. Identify the physical control weakness depicted in the flowchart for Problem 2 b. Describe the IT controls that should be in place in this systemarrow_forwardPHYSICAL CONTROLSUsing the flowchart of a purchases system for this Problem, identify sixmajor physical control weaknesses in the system. Discuss theunmitigated risks associated with each weakness.arrow_forwardRefer to the system flowchart labeled Problem 4.Requireda. Discuss the uncontrolled risks associated with the systems as currently configured. b. Describe the controls that need to be implemented into the system to mitigate the risks in thegiven scenario.arrow_forward
- which of the following assets require the strongest of internal controls a. inventory b. credit card c. computer equipment d. casharrow_forwardDiscuss the internal control weaknesses in the expenditure cycle flowchart Structure your answer in terms of the control activities within the SAS 78/COSO control model.arrow_forwardFigure 2.1 presents the business activities of purchasing department, receiving department and account payable department of ABC Limited. This might be important to note that this is a newly configured expenditure cycle using the basic technology. Figure 2.1. Expenditure Cycle of ABC Limited. Required: Which of the above functions must be performed by the cash disbursement department? Based on the above information, discuss the uncontrolled risks associated with the system as currently configured? And describe the controls that need to be implemented into the system to mitigate the risks in the given scenario.arrow_forward
- 25) Identify, which of the following will be included in different types of review engagements A. Risk assessment reports B. Review of internal controls C. System reliability reports D. Value for money reviews A , B , C and D Both D and C Both A and B Only Aarrow_forwardWhich of the following is a good internal control for cash payments? A.Payments to suppliers should be made as quickly as possible B.An experienced accountant should have total responsibility for all cash payment functions. C.Payments should be authorised before they are made D.Supporting documentation should be destroyed immediately after payment to avoid incorrectly twice.arrow_forwardRefer to the system flowchart below and identify the internal control risks represented in it:arrow_forward
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