Acc 400 essay

Culotti’s Pizzas operates purely on a carryout basis. Buyers pick up all their orders for a table where a attendant exchanges the pizza to get cash. While at the the countertop, the customers can see other personnel making the pizzas plus the large stoves in which the pizzas are baked. Instructions: Recognize the half a dozen principles of internal control and give and example of every single principle that you observe when ever picking up the pizza. (Note: It may not be possible to see all guidelines.

) The 6 principles of internal control are establishment of responsibility, Physical, mechanised, and electronic digital controls, segregation of responsibilities, independent interior verification, documents procedures, and other controls. 1 . Establishment of responsibility: Business of responsibility depends on in the event one or more employees are receiving money through the customer. If it is the case it could cause a concern with the cash register coming up short. The director would then simply have difficulty determining which specific is responsible for the shortage. installment payments on your Physical, mechanical, and electronic digital controls: Physical controls apply to shielding of property, and data that support protect the company’s assets.

Mechanical and Electronic handles safeguard assets and help heighten the reliability of and responsibility with the records in accounting.

Physical, Mechanical, and Electronic controls are essential which include examples such as Safes, and security deposit boxes, storage cupboards that are used intended for inventory and records, complete key access in companies, alarms, tv monitors, and time lighting for recording of time. a few. Segregation of duties: Segregation of tasks embodies the ideas that responsibility related activities ought to be delegated to be able to individuals and that record keeping for a property should be retained separate through the physical custody of that same asset. When a customer strolls into Culotti’s Pizza they will see workers making the pizzas in the oven place. The custody of the children of the property (in the case the pizza) is being stored separate in the front counter clerk. The leading counter clerk stays out of your kitchen and is responsible for ringing up the deal in the sign-up system (documenting the sale) and trading payment pertaining to the product. They are two responsibilities that are within customer watch that are stored segregated. four. Independent Inside Verification: When ever walking in pick up a pizza acustomer may see one particular employee within the cash register taking the cash in the customers to pay for the lasagna.

This staff is selected by the owner to maintain custody of the children of the cash on hand. This internal control makes it easy for the master to track down the individual responsible if perhaps there are any discrepancies together with the cash by so doing. A customer can also observe the worker when he or she is reading the enroll tape. This kind of employee can be verifying the transactions on the register strapping with the money that is in the drawer for making that each how much each deal is made up by the cash that is in the drawer. a few. Documentation types of procedures: In the event of this kind of story, you will find no doc procedures. 6. Other Controls: In consequence of employees managing the cash from the customers, every employee could possibly be bonded, that allows insurance pertaining to the business as a result of theft with the employees. Rotating the employees for the cash register by set instances and ensuring each closes their portion at the end of his or her shift. The procedure will allow the company to check each cabinet and make sure it can be correct. Finally, the company may do a criminal court records search on their personnel. This information will supply the company while using information on potential employees and if he or she has ever been charged having a crime that relates to theft from one more company.

CHAPTER 7 PROBLEM SET N: P7-2B (PAGE 359)

The table of wholesale real estate flipper of a regional church is concerned about the interior accounting settings pertaining to the offering series made in weekly companies. They request you to serve on a three-person examine team with the internal auditor of the school and a CPA that has just became a member of the cathedral. At a meeting of the taxation team plus the board of trustees you discover the following: 1 . the church’s board of trustees offers delegated responsibility for the financial management and taxation of financial documents to the financing committee. This group works on the annual budget and approves key disbursements although not involved in series or record keeping. Simply no audit has been made in the past few years because the same trusted employee as retained church information and offered as monetary secretary to get 15 years. The cathedral does not hold any faithfulness insurance. 2 . The collection with the weekly services is taken by a crew of ushers who offer to serve for 30 days. The brings take the collection plates into a basement business office at the rear of thechurch. They palm their dishes to the head usher and return to the church services. After all china have been turned in, the head usher counts the cash received.

They will head usher then locations the cash in the church secure along with a mention of the volume counted. Your head usher volunteers to provide for a few months. 3. Another morning the financial admin opens the safe and recounts the gathering. The admin withholds $150-$200 in funds, depending on the money expenditures predicted for the week, and deposits the remainder of the collections in the financial institution. To assist in the pay in, church users who lead by check are asked to make their particular checks payable to “Cash. 4. Every month the financial secretary reconciles the bank declaration and submits a copy in the reconciliation for the board of trustees. The reconciliations have got rarely contained any lender errors and still have never shown any mistakes per book. Instructions:

(a) Indicate the weakness in internal accounting control in the handling of collections. One weakness in the internal accounting control to get handling collections includes the comprehensive use. In case of internal taxation control devices, they can be very broad inside their application that creates a less strong audit control system (Vitez, O). A weakness in the handling of collections located could also be a single since the funds is managed by multiple ushers and will become frustrating. This some weakness also turns into difficult intended for management situations for the church members that attempt to maintain the correct business procedures. The second weakness is the lack of knowledge that the individuals that deal with and record the money include. If the ushers that rely and record the money do not know how to effectively record the fund this might lead to disadvantages. (b) List the improvements in interior control types of procedures that you plan to make in the next getting together with of the review team to get (1) the ushers, (2) the head usher, (3) the financial secretary, and (4) the finance committee. The ushers will be on a rotation for a established amount of time therefore; every usher will eventually hold the responsibility of collecting the providing. A team of appointed ushers is going to take up the collection. The ushers will then take the collection to the back area of the cathedral where the cash are measured. Once the funds has been accumulated the brings will then hand off the variety of funds to the head usher. The head jason derulo will recount the money received in the collection, and place the funds into thechurch safe together with a total rely of the funds that were gathered. Improvements intended for the Monetary Secretary: After re-counting the money she will need to record just how much was accumulated on an accounting record and record simply how much she kept on hand for your week and exactly how much your woman deposited inside the bank within this same record. Checks ought to be made payable to the name of the chapel for example “Saint Josephs and also the First Baptist Church. 

Improvements intended for the Finance Committee: The finance committee should have audits conducted at least once a year at random. The finance committee should run a criminal background check on almost all members who also handle cash. The financing committee should oversee the board of trustees and take last look at most financial data. The finance committee need fidelity insurance. (c) What church procedures should be converted to improve inner control? Audits should be done regularly to ensure the accuracy and reliability and that economic records will be being completed ethically. I would suggest doing it on the quarterly basis. Additionally , the church should immediately get hold of fidelity insurance. I see no issue with the month-to-month rotation of ushers whom collect the donated funds; however they ought to stay in the basement workplace and act as a observe to the checking of bestowed funds.

The head usher should fill out an application stating how much has been received in money and how much in check via shawls by hoda. The funds should after that be put in a closed bag together with the initials of these present written on the seal. Funds can certainly still be placed in the church safe. The financial secretary needs to determine how much cash is needed intended for the each week expenditures and submit this amount combined with sealed carrier of via shawls by hoda to the financial institution. She should certainly then enjoy the bank validate the amount of funds and examine donations inside the sealed tote. The entire amount should be transferred and the economical secretary will need to then withdrawal the amount essential for the week either by withdrawal slide or examine. Everything ought to be thoroughly noted in the bank’s financial documents. Additionally , charitable contributions made in the lender form should never be written to cash but rather to the chapel itself to insure checks are going to the church and never for personal make use of. The economical secretary’s reconciled bank affirmation should be analyzed thoroughly by simply another person ahead of submittal to the board of trustees.

REFERRALS:

Kimmel, P. G., Weygandt, T. J., & Kieso, G. E. (2007). Financial accounting: Tools for people who do buiness decision making (4th ed. ). Hoboken, NJ-NEW JERSEY: John Wiley & Kids. Vietz, Osmond. Weaknesses in an Internal Taxation Control System. (2012). http://www.smallbusiness.chron.com/weaknesses-internal-audit-control-system-3810.html Williams, M. R., Haka, S. Farreneheit., & Bettner, M. S. (2005). Economic & bureaucratic accounting: The foundation for business decisions (13th impotence. ). Nyc, NY: McGraw-Hill Companies.

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