'Internal Control Essay\r'

'1. Inform the death chair of each new interior(a) visualize requirements if the association decides to go public. As per the accident that happened in the connection about well-nigh employees was analyze pornography on comp both computing device and he had a hard conviction to get his employees admitted that they were the single who doing it. He should commit limit find by separate passwords for each psyche to log in the computing machine systems. To make original that which soulfulness was log on in the computer and do bad thing during that period.\r\n2. discuss the President of what the company is doing right (they atomic number 18 doing some things well) and also suggest to the President whether or non they should acquire the unerasable ink machine. When your advice the President, please be sure to reference the applicable indwelling look into ruler that applies.\r\nFrom the passage that the accountant has latterly started using prenumbered invoices quest by the normal of internet assure activities.\r\nPlease come the Documentation Procedures passage below.\r\nFrom the passage, the president wants to buy an indelible ink machine to mug their checks. In my opinion, I would like to recommend that he should buy an indelible ink machine following by the principle of internal control activities.\r\nPlease encounter the Physical Controls passage below.\r\nPrinciples of internal control activities\r\nDocumentation Procedures\r\nCompanies should establish procures for documents. First, whenever possible, companies should use up prenumbered documents, and each(prenominal) documents should be account for. Prenumbering helps to prevent a transaction from world preserve more than than once, or conversely, from not bring recorded at all. Second, the control system shown that employees should immediately forward source documents for history entries to the accounting entries to the accounting department. This control measure helps to operate timely recording of the transaction and contributes instanter to the accuracy and reliability of the accounting record. ingest use prenumbered checks and account for them in era; each check must put iodine across an extold invoice; require employees to use corporate credit cards for reimbursable expenses; cast invoices â€Å"paid”.\r\nPhysical Controls\r\nStore blank space checks in safes, with limited rile; bring out check amounts by machine in indelible ink.\r\n3. Advise the President of what the company is doing wrong (they atomic number 18 definitely doing some things poorly). Please be sure to acknowledge the internal control principle that is being violated along with a testimonial for improvement.\r\nFollowing from the passage that they incur bingle accountant who serves as Treasurer and mastery which streamlines many of their processes. In this dual role, he purchases all of the supplies and pays for these purchases. He also recieves the c hecks and completes the periodic bank recommendation. The accountant is so industrious that the company handels pretty cash a bit differently.\r\nHe should asign duties to more than one person not only one because it hard for one person to control and serves as treasurer and controller in the same time.\r\nFollowing by Principles of internal control activities. Please find separatism of Duties and Establishment of Responsibility passage below.\r\nFrom the following passage that all employees have access to the petty cash in a desk drawer and argon asked to only baffle a note if they use any of the cash. In my opinion, he should limit access to the petty cash in a desk drawer, only one person could have responsible for the petty cash. Following by Principles of internal control activities. Please see the Establishment of Responsibility passage below.\r\nPrinciples of internal control activities\r\nSegregation of Duties\r\n disparate individuals approve and make payments; check sin gers do not record disbursements Segregation of duties is indispensable in an internal control system. There are two common applications of this principle: 1. Different individuals should be responsible for cerebrate activities. 2. The debt instrument for record-keeping for an asset should be separate from the natural custody of that asset.\r\nThe rational for segregation of duties is this: The massage of one employee should, without a duplication of effort, go forth a reliable basis for evaluating the study of another employee. Segregation of related activities fashioning one individual responsible for related activities increases the potential for errors and irregularities.\r\nEstablishment of Responsibility\r\nAn prerequisite principle of international control is to allot responsibility to specific employees. Control is around effective when only one person is responsible for given task. Establishing responsibility lots requires limiting access only to authorized perso nnel, and then identifying those personnel. Only designated personnel are authorized to sign checks (treasurer) and approve vendors. differentiate checks to invoices; reconcile bank statement periodical\r\n'