Loose-leaf For Auditing & Assurance Services: A Systematic Approach
11th Edition
ISBN: 9781260687637
Author: William F Messier Jr, Steven M Glover Associate Professor, Douglas F Prawitt Associate Professor
Publisher: McGraw-Hill Education
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Chapter 11, Problem 11.18MCQ
To determine
Concept Introduction:
Internal controls are policies and procedures defined by the management to ensure the smooth functioning of the business processes. Internal controls ensure the complete and correct accounting and safeguards to the assets.
To choose: the appropriate person for mailing the signed checks
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Students have asked these similar questions
At Carlson Services, the cashier collects checks and cash from customers, and the junior accountant records the transactions in the journal. The controller approves the journal entries and bank
reconciliations. The treasurer signs checks and approves contracts. Which internal control procedure is exemplified in the above situation?
OA. separation of duties
OB. assignment of responsibilities
OC. documents
OD. competent, reliable, and ethical personnel
Which of the following is not a reason why paying by check is an important internal control?
A. The check must be signed by an authorized official.
B. The check provides a record of the payment.
○ C. Before signing the check, the purchasing agent reviews the invoice or other evidence supporting the payment.
OD. All of the above statements are correct.
What type of internal controls are job rotation, preparation of bank reconciliations, segregation of duties, use of passwords, and use of a security guard?
Chapter 11 Solutions
Loose-leaf For Auditing & Assurance Services: A Systematic Approach
Ch. 11 - Prob. 11.1RQCh. 11 - Prob. 11.2RQCh. 11 - Prob. 11.3RQCh. 11 - Prob. 11.4RQCh. 11 - Prob. 11.5RQCh. 11 - Prob. 11.6RQCh. 11 - Prob. 11.7RQCh. 11 - Prob. 11.8RQCh. 11 - Prob. 11.9RQCh. 11 - Prob. 11.10RQ
Ch. 11 - Prob. 11.11RQCh. 11 - Prob. 11.12RQCh. 11 - Prob. 11.13MCQCh. 11 - Prob. 11.14MCQCh. 11 - Prob. 11.15MCQCh. 11 - Prob. 11.16MCQCh. 11 - Prob. 11.17MCQCh. 11 - Prob. 11.18MCQCh. 11 - Prob. 11.19MCQCh. 11 - Prob. 11.20MCQCh. 11 - Prob. 11.21MCQCh. 11 - Prob. 11.22MCQCh. 11 - Prob. 11.23MCQCh. 11 - Prob. 11.24PCh. 11 - Prob. 11.25PCh. 11 - Prob. 11.26PCh. 11 - Prob. 11.27PCh. 11 - Prob. 11.28PCh. 11 - Prob. 11.29PCh. 11 - Prob. 11.30P
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- What is the purpose of the following control procedures (i.e., what threats is it designed to mitigate)? i. Establishing a separate payroll checking account and funding it as an imprest account.arrow_forwardAuditors ordinarily ascertain whether payroll checks are properly endorsed during the auditofa. Clock cards.b. The voucher system.c. Cash in bank.d. Accrued payroll.arrow_forwardWhich of the following is NOT an issue with the Bradmark internal controls as it pertains to the revenue cycle? James Walker authorizes and executes transactions. The credit manager verbally authorizes credit increases. The warehouse clerk has access to assets and record keeping. Mary receives checks and remittances from the customer.arrow_forward
- Explain why each of the following combinations of task should or should not be separated to achieve adequate internal control. Approval of bad debts write-offs and the reconciliation of the AR subsidiary ledger and the GL control account. Distribution of payroll checks to employees and approval of employee time cards. Posting of amounts from both the cash receipts and the cash disbursement journal to general ledger. Writing checks to vendors and posting to the cash account. Recording cash receipts in the journal and preparing the bank reconciliation.arrow_forwardThe bank reconciliation ? Please explain with full explanation. a. should be prepared by an employee who records cash transactions b. is part of the internal control system c. is for information purposes only d. is sent to the bank for verificationarrow_forwardAt Emerson Company, one bookkeeper prepares the cash deposits while the other bookkeeper enters the collections in the journal and ledger. Which of the following is the best explanation of this type of internal control principle over cash receipts? Physical controls. Documentation procedures. Mechanical controls. Segregation of duties.arrow_forward
- Which of the following generally would be considered good internal control of cash disbursements? a. Make all cash disbursements using cash rather than debit cards or credit cards. b. Set maximum purchase limits on debit cards and credit cards. c. The employee responsible for making cash disbursements should be in charge of cash receipts. d. The employee who authorizes payments should also prepare the check.arrow_forwardThink about internal control over receivables collections. What task must be delegated to a company's credit department in order to protect its cash? What can a credit department employee do to harm the organization if this task is performed by the credit department?arrow_forwardWhich of the following is an example of detective controls? a. The company should establish formal guidelines to handle cash receipts and make purchases. b. Important documents should be kept in a safe place, and electronic files should be backed up regularly. c. Employees should be made aware of the company’s internal control policies. d. Management periodically determines whether the amount of physical assets agree with the accounting records.arrow_forward
- What is the purpose of the following control procedures (i.e., what threats is it designed to mitigate)? h. Encryption of payroll data both when it is electronically sent to a payroll service bureau and while at rest in the HR/payroll database.arrow_forwardWhich of the following scenarios reduces the risk of an employee fraud? Group of answer choices An accountant being responsible for approving payments to a vendor The bank reconciliation being prepared by an accountant Remittance advices being sent directly to the cashier A sales clerk having access to the cash registerarrow_forwardWhy should cash receipts and sales to credit clients be documented and reported immediately?arrow_forward
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