Accounting Information Systems
11th Edition
ISBN: 9781337552127
Author: Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan Hill
Publisher: Cengage Learning
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Question
Chapter 8, Problem 2DQ
Summary Introduction
To determine: It is virtually impossible to execute segregation of duties in small companies with few workers. Do you agree with the statement? and discuss.
Introduction:
Segregation of duties
A proactive approach to prevent error by dividing the responsibilities in performing a task where a task is segregated into many segments.
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Chapter 8 Solutions
Accounting Information Systems
Ch. 8 - What are the four major categories of pervasive...Ch. 8 - What are the differences among a pervasive control...Ch. 8 - Prob. 3RQCh. 8 - Describe some compensating controls that can be...Ch. 8 - What are policy controls plans? How do policies...Ch. 8 - Why should an organization conduct monitoring...Ch. 8 - Prob. 8RQCh. 8 - Prob. 10RQCh. 8 - What are the major elements of the strategic IT...Ch. 8 - Prob. 12RQ
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Similar questions
- Segregation of duties is an important concept in internal control. However, segregation of duties is often a challenge for smaller businesses because they do not have sufficient staff to segregate duties. Normally, the segregation of duties identified below results in either a significant deficiency or a material weakness in internal control.For each “segregation of duties: problem identified here:a. Identify the risk to financial reporting that is associated with the inadequacy of the segregation of duties.b. Identify other controls that might mitigate the segregation of duties risks.c. If a control is identified that would mitigate the risks, briefly indicate what evidence the auditor would need to gather to determine that the control is operating effectively.Situations1. The same individual handles cash receipts, the bank reconciliation, and customer complaints.2. The same person prepares billings to customers and also collects cash receipts and applies them to customer accounts.3.…arrow_forwardSegregation of duties means that a company assigns responsibilities so that Multiple Choice sufficient workers are available to cover all necessary jobs. responsibilities for related activities are assigned to two or more people. employees are restricted to jobs for which they have adequate training. workers are divided into those who make decisions and those who carry them out.arrow_forwardEven though technology has improved the internal control structure of a company, a supervisor cannot depend totally on technology. Discuss other internal controls a supervisor needs to implement to ensure a strong structure.arrow_forward
- In which of the following situations is a company most likely to benefit from implementing ABC? When the company operates in an environment where the risk of cost distortion is high. When the company already has the necessary accounting and technological expertise in place. When the company has very few competitors. When the company produces and sells a single product.arrow_forwardAssume that a company has decided not to allocate any support department costs to producing departments. Describe the likely behavior of the managers of the producing departments. Would this be good or bad? Explain why allocation would correct this type of behavior.arrow_forwardThe fact that your organization underapplies or overapplies overhead is an indication of a problem with the people in charge of applying such overhead. Defend or attack this statementarrow_forward
- agency costs may occur if A. Managers make decisions for their own best interest B. Managers may not attempt to maximize the value of the firm to shareholders C. The board does not properly oversee the activities and decisions of managers D.all of the abovearrow_forwardWhich of the following is not a common feature of an internal control system? Multiple Choice Segregating duties Bonding employees Implementing the most effective marketing plan Performance evaluationarrow_forwardDecentralized businesses can have three responsibility centers that must be evaluated differently because of their functions. Describe the three responsibility centers and give an example of each from your work. Give an explanation about how each is evaluated. Tell us why you would prefer to work in a centralized or decentralized organization. Discuss which type of responsibility center you would prefer to manage and why.arrow_forward
- The management of an organisation with a remote workforce is concerned that employees are clocking on for others who are not actually at work. What controls would reduce this risk?arrow_forwardThe relatively low number of types of transactions incurred by small firms makes the segregation of duties impossible. True or Falsearrow_forwardWhy does the high cost of the system negatively impact the organization's bottom line?arrow_forward
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