Match each of the following transactions with the applicable internal control principle that is being violated.A. Establish responsibilityB. Maintain adequate recordsC. Insure assets and bond employeesD. Separate recordkeeping from custody of assetsE. Divide responsibility for related transactionsF. Apply technological controlsG. Perform regular and independent reviews_____ 1. Cashiers have access to the cash register recorded tape or file._____ 2. A company uses a voucher system, but the cash disbursement clerk pays directly from invoices received._____ 3. Only sales clerks use the cash register, but they all share the same cash drawer._____ 4. The bookkeeper prepares and signs checks and completes the bank reconciliation._____ 5. A restaurant allows servers to keep cash collected in

Question

their aprons and ring in all sales at the end of the night._____ 6. A company fails to hire a CPA to perform an annual audit._____ 7. A company does not bond its key cash-handling employees._____ 8. A company has a single department that handles purchasing, receiving, and inventory management._____ 9. A company fails to have financial records tested and evaluated for the effectiveness of internal control._____ 10. A company manager keeps pre-signed checks in his desk drawer for employees to hand write when the accountant is out of the office.

What will be an ideal response?

Answer 1

1. D; 2. B; 3. A; 4. D; 5. F; 6. G; 7. C; 8. E; 9. G; 10. F