In Obtaining an Understanding of the ABC Company's Internal Control

Essay

In obtaining an understanding of the ABC Company's internal control structure, you discover the following circumstances:
1.The cashier makes bank deposits and records all cash transactions.
2.Raw materials are stored in an unlocked warehouse.
3.Prenumbered receiving reports are not used in the receiving department.
4.Monthly statements of account are sent to customers by personnel who maintain the accounts in the accounts receivable ledger.
5.Accounts receivable ledger clerks write-off accounts as uncollectible when they are more than 90 days past due.
6.The shipping department orally notifies the billing department that goods have been shipped.
7.The treasurer approves bills for payment, prepares the checks, and signs the checks.
8.Petty cash counts are made periodically by the petty cash custodian.
9.The company does not have a chart of accounts.
10.Each employee has direct access to his/her payroll records.
REQUIRED: For each circumstance, indicate from the list below, which category the control procedure that has been violated belongs to:Control Procedures Categories:
A.Segregation of duties
B.Physical controls
C.Documents and records
D.Independent checks
E.Proper authorization