The company XYZ suffers from numerous weaknesses in its internal control system. For each the below situations, you are required to identify the anomaly/risk related to this system and propose eventual solutions. The financial department issues one copy of the sales bill that is shipped to the customer with the company The inventory custodian is the person who deliver the merchandise to the The person who keep the checks (issued and received) is the same who have access to the company accounting system.A has now 9 years experience in the company. He is responsible to keep cash and checks. Since he joining XYZ , he has not claim any vacation.The financial manager prepares the checks for the company suppliers and receive the merchandises ordered by the The company XYZ has recently installed an ERP system to manage all its activities . Different staff have access to this system.Mr X is working in the HR At the end of the month he is charged to prepare the salary statements for all employees, register them in the company books and pays them cash to each employee.The petty cash fund is available for all Each employee can expense from it without providing the invoice to the accountant.The company XYZ uses the periodic inventory For the current year, the management decides to avoid physical inventory and he pretend that such procedure is a waste of time and money.XYZ received every month the bank However, the accounting department assumes that the bank reconciliation statement with the company books is irrelevant and a waste of time and money.

We are provided with various transactions on the basis of that, we need to check whether the…

Answered: he company XYZ suffers from numerous…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The company XYZ suffers from numerous weaknesses in its internal control system. For each the below situations, you are required to identify the anomaly/risk related to this system and propose eventual solutions.

The financial department issues one copy of the sales bill that is shipped to the customer with the company
The inventory custodian is the person who deliver the merchandise to the
The person who keep the checks (issued and received) is the same who have access to the company accounting system.
A has now 9 years experience in the company. He is responsible to keep cash and checks. Since he joining XYZ , he has not claim any vacation.
The financial manager prepares the checks for the company suppliers and receive the merchandises ordered by the
The company XYZ has recently installed an ERP system to manage all its activities . Different staff have access to this system.
Mr X is working in the HR At the end of the month he is charged to prepare the salary statements for all employees, register them in the company books and pays them cash to each employee.
The petty cash fund is available for all Each employee can expense from it without providing the invoice to the accountant.
The company XYZ uses the periodic inventory For the current year, the management decides to avoid physical inventory and he pretend that such procedure is a waste of time and money.
XYZ received every month the bank However, the accounting department assumes that the bank reconciliation statement with the company books is irrelevant and a waste of time and money.

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