What law or rule requires in the testing

Reference no: EM131819256

Question: Understanding Sarbanes-Oxley and identifying internal control strengths and weaknesses The following situations suggest a strength or a weakness in internal control.

a. Top managers delegate all internal control procedures to the accounting department.

b. Accounting department staff (or the bookkeeper) orders merchandise and approves invoices for payment.

c. Cash received over the counter is controlled by the sales clerk, who rings up the sale and places the cash in the register. The sales clerk matches the total recorded by the register to each day's cash sales.

d. The employee who signs checks need not examine the payment packet because he is confident the amounts are correct.

Requirements: 1. Define internal control.

2. The system of internal control must be tested by external auditors. What law or rule requires this testing?

3. Identify each item in the list above as either a strength or a weakness in internal control, and give your reason for each answer.

Reference no: EM131819256

Questions Cloud

What is jet basis in the land and the machinery : What is George’s basis in his Jet shares? When does his holding period begin? What is Jet’s basis in the land and the machinery?

Prepare safety bank reconciliation using given information : Preparing a bank reconciliation The Cash account of Safety Security Systems reported a balance of $2,450 at December 31, 2016.

Herman need to earn to afford his purchase : What annual interest rate does Herman need to earn to afford his purchase?

How much gain or loss must lucy recognize on the exchange : Transfer to an Existing Corporation. How much gain or loss must Lucy recognize on the exchange?

What law or rule requires in the testing : Understanding Sarbanes-Oxley and identifying internal control strengths and weaknesses The following situations suggest a strength or a weakness in internal.

Identify the missing internal control procedure : Identifying internal controls Consider each situation separately. Identify the missing internal control procedure from these characteristics.

Evaluating internal control over cash receipts : Evaluating internal control over cash receipts Dogtopia sells pet supplies and food and handles all sales with a cash register.

What could the business do to correct the weakness : Evaluating internal control over cash payments Gary's Great Cars purchases high-performance auto parts from a Nebraska vendor.

Make the general journal entry to create the petty cash fund : Accounting for petty cash Christine's Dance Studio created a $370 imprest petty cash fund. During the month, the fund custodian authorized and signed petty.

User Account

All Pages