Rolling Hills Ltd. has the following internal controls over cash payments. Identify the control activity that is applicable to each procedure.
1
2
3
4
5
6
Company cheques are prenumbered.
The bank statement is reconciled monthly by the
assistant controller.
Blank cheques are stored in a safe in the
controller’s office.
Both the controller and the assistant controller
are required to sign cheques or authorize
electronic payments.
Cheque signers are not allowed to record cash
payments.
All payments are made by cheque or electronic
transfer.
Documentation
Review and Reconciliation
Physical Controls
Assignment of Responsibility
Segregation of Duties
Physical Controls
Tene Ltd. has the following internal controls over cash receipts. Identify the control activity that is applicable to each procedure.
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2
3
4
5
(a)
(b)
(c)
(d)
(e)
All over-the-counter receipts are recorded on
cash registers.
Daily cash counts are performed by the
accounting supervisor.
The duties of receiving cash, recording cash, and
maintaining custody of cash are assigned to
different individuals.
Only cashiers may operate cash registers.
All cash is deposited intact in the bank account
every day.
All transactions should include original, detailed
receipts.
Undeposited cash should be stored in the
company safe.
Surprise cash counts are performed by internal
audit.
Responsibility for related activities should be
assigned to specific employees.
Cheque signers are not allowed to record cash
transactions.
Documentation and Physical Controls
Review and Reconciliation
Segregation of duties
Assignment of Responsibility
Physical Controls
Documentation
Physical Controls
Review and Reconciliation
Assignment of Responsibility
Segregation of Duties