Reference no: EM131713573

You are the manager of a small, local deli. To purchase miscellaneous supplies, you keep $200 in petty cash in an unlocked desk drawer in your office. Frequently, staff members make these purchases for you. They are not required to sign a petty cash slip when they take cash. Furthermore, they are supposed to turn in receipts, but that does not always happen. You never enforce these guidelines, and you never lock your office because you have always trusted your staff. In addition, you have never had any issue with missing petty cash—until now. You check your drawer and find that the petty cash fund is short $100. There is no record of who took the money or why.

Respond to each of the following in 3-5 well-developed sentences:

1. Is the petty cash shortage a result of not applying effective internal control procedures? Explain.

[Write your response here]

2. Describe two procedures you could implement to prevent the petty cash shortage from occurring in the future. Why do you believe these procedures will be effective?

[Write your response here]

3. Should you, as the manager, accept some responsibility for the petty cash shortage? Explain.

 

[Write your response here]