What do you understand by internal controls, Business Management

Assignment Help:

QUESTION 3

One of the responsibilities of management is to ensure the organisation has an effective system of internal control.

Required

(a) What do you understand by internal controls?

(b) State and explain five different types of internal control on which the auditor may wish to place reliance.

(c) Internal controls are not solution for all the ailments of an organization. State four limitations of internal controls.

(d) The following procedures for handling of cash remittances from customers are in effect at DEF Limited.

Incoming mail is opened in the mailroom, and all letters which include remittances are forwarded to the cashier. The cashier restrictively endorses all cheques and prepares an adding machine tape of them. The cashier prepares a remittance advice when the customer does not return the DEF remittance advice sent to the customers with monthly statements, unless the customer's cheque was accompanied by a customer-prepared document which could be used as a remittance advice. The cashier prepares an adding-machine tape of remittance advices and agrees the total to the tape of cheques received. The cashier uses one adding-machine tape for the bank deposit-slip she prepares and delivers with the cheque to the bank by messenger. The cashier delivers the remittance advices together with the second adding-machine tape to the debtors-ledger section where they serve as a source for posting to the accounts of individual debtors. The cashier prepares a memorandum listing of the receipts for the day which she delivers to the general-ledger section. The debtors-ledger section advises the general-ledger section of the total daily credits posted to the individual accounts of debtors in order that this total can be posted to the credit of the control account for debtors in the general ledger. This total can also be agreed with the total supplied by the cashier.

i. Describe any weaknesses in internal control surrounding cash receipts, and suggest two recommendations which you could make to the client, either one of which would eliminate these weaknesses.

ii. What are the possible effects of these weaknesses in internal control?


Related Discussions:- What do you understand by internal controls

Important terms in the workmen compensation act 1923s, What are the importa...

What are the important terms in the workmen compensation act 1923s? Workmen Compensation Act 1923: The significant terms into the Workmen Compensation Act 1923 are as illustrat

Manage finance, strategic oppurtunity for new product

strategic oppurtunity for new product

Quality management system, Briefly introduce the subject and describe its k...

Briefly introduce the subject and describe its key business or operations. Appraise how it plans and manages quality. Analyse how quality can be used to support the strategies o

Objectives of preventive maintenance, a. To minimize the possibility of ...

a. To minimize the possibility of unanticipated production interruptions by locating or uncovering any condition which may lead to it? b. To make plant equipment and m

Departments of e-care consultant medical centre, table show the different d...

table show the different departments within the Medical Centre, although duties within this department are not static to one department (Dept.), as doctors and other professionals

Discuss the main types of business ownership structures, Question 1: Ti...

Question 1: Timmons and Spinelli (2007) argue that a core, fundamental entrepreneurial process accounts for the substantially greater success pattern among higher potential ve

Explain the difference between in two types of presentation, QUESTION ...

QUESTION a) The baseline for making effective presentations is the ability to differentiate between informative and persuasive presentations. Explain the difference between

Humanistic aspects of tq, The human element is the most important input i...

The human element is the most important input in any industrial enterprise and it is the one which is most difficult to control. Quality Management is essentially a control

Balance-flexibility-stability affected in the organisation, How is the bala...

How is the balance, flexibility and stability affected in the organisation? Balance, Flexibility and Stability: Every units of an organization should be balanced to attain

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd