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

What are principal objectives of total quality management, What are the pri...

What are the principal objectives of total quality management? The principal objectives of total quality management are:- a. Customer Focus to as Customer Delight. b. Con

Total quality management, Describe the key aspects of a programme to implem...

Describe the key aspects of a programme to implement Total Quality Management (TQM) within a manufacturing organisation. Clarify the meaning of quality in respect of the produc

Explain diffusion of innovation theory, A) "Diffusion of innovation theory ...

A) "Diffusion of innovation theory is relevant to software, where software is considered as an innovation. In particular, the elements of diffusion, the innovation decision process

Allocation of country resources to the price mechanism, What are the benefi...

What are the benefits of leaving the allocation of country resources to the price mechanism? Ans) The main conditions needed are: 1. Either a finite number of agents or goods

What is the suitable procedure of job evaluation, What is the suitable proc...

What is the suitable procedure of job evaluation? Procedure of Job Evaluation: 1. Know the job to be evaluated. 2. Define and analyse the needs of the job. Write-down

Processes of problem solving and decision making, QUESTION Instruction...

QUESTION Instruction- Read the following case study and answer the questions below On a Saturday night at one in the morning Mr and Mrs Samuel, repeated guests of Marriott

Strategic planning, discuss the importance of strategic planning to a Zimba...

discuss the importance of strategic planning to a Zimbabwean manager

What are the levels of management, What are the levels of management? ...

What are the levels of management? Levels of Management: Industrial management has obtained the given activity levels as follows: • Top Management • Upper middle ma

What are types of entrepreneur on the basis of ownership, What are types of...

What are types of Entrepreneur on the basis of ownership? Classification on the Basis of Ownership: a. Founder or "Pure Entrepreneurs": Such individuals who are the f

Explain the difference between countries with high context, QUESTION (...

QUESTION (a) Explain the difference between countries with high context and low context cultures. Also describe what managers operating in international environments need to p

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