ACC557 Week 5 Chapter 7 E7 5 E7 7 E7 14 P7 3A

Question: #8260

EXERCISE 7-5

Procedure

IC good or weak?

Related internal control principle

Weak

Establishment of Responsibility

Good

Independent Internal Verification

Weak

Segregation of Duties

Good

Segregation of Duties

Weak

Documentation Procedures

Exercise 7-5

Your answer is correct.

Listed below are five procedures followed by Parson Company.

Several individuals operate the cash register using the same register drawer.

A monthly bank reconciliation is prepared by someone who has no other cash responsibilities.

Fran Vorbeck writes checks and also records cash payment journal entries.

One individual orders inventory, while a different individual authorizes payments.

Unnumbered sales invoices from credit sales are forwarded to the accounting department every four weeks for recording.

Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated.

Procedure

IC good or weak?

Related internal control principle

Weak

Establishment of Responsibility

Good

Independent Internal Verification

Weak

Segregation of Duties

Good

Segregation of Duties

Weak

Documentation Procedures

EXERCISE 7-7

Solution: #8261

ACC557 Week 5 Chapter 7 (E7-5 E7-7 E7-14 P7-3A)

EXERCISE 7-5 Procedure IC good or weak? Related internal control principle 1. Weak Establishment of Responsibility 2. Good Independent Internal Verification 3. Weak Segregation of Duties 4. Good Segregation of Duties 5. Weak Documentation Procedures Exercise 7-5 Your answer is correct. Listed below are five procedures followed by Parson...