possible errors or problems\n1. an employee steals the cash collected from a customer for an account…

possible errors or problems\n1. an employee steals the cash collected from a customer for an account receivable and conceals this theft by issuing a credit memorandum indicating that the customer returned the merchandise.\n2. a small fire destroys 3 days of cash receipts.\n3. the official designated to sign checks is able to steal blank checks and issue them without fear of detection.\n4. a salesclerk in serving customers often rings up a sale for less than the actual amount and then keeps the additional cash collected from the customer.\n5. three cashiers use one cash register drawer and the cash in the drawer is often short of the balance kept on hand.\n6. each cashier counts his own register drawer each day and verbally reports the results to the supervisor.\n7. cashiers with over 5 - years experience are not bonded.\ninternal control principles

possible errors or problems\n1. an employee steals the cash collected from a customer for an account receivable and conceals this theft by issuing a credit memorandum indicating that the customer returned the merchandise.\n2. a small fire destroys 3 days of cash receipts.\n3. the official designated to sign checks is able to steal blank checks and issue them without fear of detection.\n4. a salesclerk in serving customers often rings up a sale for less than the actual amount and then keeps the additional cash collected from the customer.\n5. three cashiers use one cash register drawer and the cash in the drawer is often short of the balance kept on hand.\n6. each cashier counts his own register drawer each day and verbally reports the results to the supervisor.\n7. cashiers with over 5 - years experience are not bonded.\ninternal control principles

Answer

Brief Explanations:

  1. The employee's action of stealing cash and covering it up with a false credit - memo violates the principle of segregation of duties as the same person is handling both cash collection and issuance of credit memos.
  2. Loss of cash receipts due to fire shows a lack of proper documentation and backup procedures, which is related to the principle of documentation procedures.
  3. The official stealing blank checks and issuing them undetected indicates a lack of proper authorization and segregation of duties in check - signing processes.
  4. The salesclerk's act of under - ringing sales and stealing cash violates the principle of segregation of duties and independent internal verification as there is no proper check on sales amounts and cash collections.
  5. Multiple cashiers using one drawer and having cash shortages is a problem related to segregation of duties and independent internal verification as there is no clear accountability for each cashier's cash handling.
  6. Cashiers counting their own drawers and verbally reporting results lacks independent internal verification as there is no cross - check or independent count.
  7. Cashiers with over 5 - years' experience not being bonded violates the principle of human resource controls as bonding helps protect against employee theft.

Answer:

  1. Segregation of duties
  2. Documentation procedures
  3. Segregation of duties, Authorization
  4. Segregation of duties, Independent internal verification
  5. Segregation of duties, Independent internal verification
  6. Independent internal verification
  7. Human resource controls