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Internal Cash Control - Essay Example

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Internal Cash Control

On the other hand, both the purchasing agent and treasurer issue check disbursements for expenses without each other’s accountability there is a likelihood of fraud taking place because only one person grants authority for payments. Q4.5 (b) memo indicating recommendations for improving company procedures From: Your NamesXXX To: Idaho Company Management Subject: Internal Cash Control Weaknesses Date: 23 April, 2012 With the existing gap in the internal cash control of the organization, there is a need to introduce internal control principles of cash management to increase accuracy in the flow of cash and close the gap that exist. Because of the lack of a safe place to keep the company checks, it is necessary to introduce a new safe file cabinet that is lockable with access by only the treasurer or the purchasing agent. In addition, cash registers to record the checks issued in order of the numbers in the checkbook should be introduced to avoid problems with numbering of checks issued and received (Kimmel, Weygandt & Kieso, 2011). Above all, different individuals should authorize, issue and verify checks so as to avoid fraud committed when issuing checks for expenses therefore, the treasurer and the purchasing agents should not be the only one’s authorizing, signing and issuing checks for expenses incurred. ...
As a result, Guard Dog Company has managed to initiate the internal control principles in its purchases and payment. There are five principles of the cash disbursement including the establishment of responsibility in within cash disbursements as the designated personnel that include the treasurer, and assistant treasurer is authorized to handle checks (Kimmel, Weygandt & Kieso, 2011). In addition, there are different individuals including the treasurer and assistant treasurer who approve the payment of the expenses through checks as they hold them and stamp the invoices once paid. There is segregation of duties between purchasing agent, receiving department supervisor, treasurer and assistant treasurer because there is no approval of payment in checks without their authorization. Finally, Guard Dog Company has kept in place the physical, electronic and mechanical controls in place (Kimmel, Weygandt & Kieso, 2011). This is because, there is safe storage of checks in the safe whose particulars are limitedly held only by the treasurer and assistant treasurer and they use cash registers to register the issuance of the numbered checks that are used. In addition, the fact that the assistant chief accountant carries out the reconciling of checks ensures transparency. Q4-2A. Indicate the weaknesses in internal accounting control in the handling of collections. In the handling of church collections, several weaknesses exist in the procedures followed as the ushers who assist on a voluntary basis do not guarantee the fact that they cannot take some of the church collections. In addition, the head usher who counts the offering alone and works on a voluntary basis is also likely to commit fraud by taking some of the collections without anybody’s knowledge (Kimmel, Weygandt & ...Show more

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Internal Cash Control Name Institution Internal Cash Control Q4.5 (a) weaknesses in internal control over cash disbursements Even though, there is segregation of duties between the treasurer and purchased agents there is still internal control weaknesses over cash disbursements at Idaho Company…
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