What types of controls could be implemented to reduce the number of clerical errors in this situation? What are some things that the company can do to alleviate the monotonous nature of data entry?
Vignette 6.1 ERRONEOUS RECORD KEEPING
This is it, Max—either you get our account straightened out, or we're taking our business to Sudential" This as the fourth customer in one week that had threatened Max. The large health insurance company Max worked for received hundreds of checks each day from its customers in payment of insurance premiums. Because of the routine nature of the job of keying in payments, the cash data entry clerk often got bored. His mind would wander to more scintillating topics. In the middle of the afternoon, the clerk had to really struggle just to stay awake. As a result, the clerk made many errors in entering the payments. He would transpose numbers and key in the customer codes incorrectly, causing credits to go into the wrong customer accounts.
Max and other sales reps complained to top management about the mistakes in their customers' accounts. As a result, "management brought in two employees from other departments to review the customer accounts and correct the errors. However, the organization would have been much better off if management had instituted some internal controls to prevent the errors from ever happening in the first place.
Thought Questions:
- What types of controls could be implemented to reduce the number of clerical errors in this situation?
- What are some things that the company can do to alleviate the monotonous nature of data entry?
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