Assignment Internal Cash Control

Topics: Internal control, Verification Pages: 4 (1004 words) Published: November 6, 2008
The weaknesses in the internal control over cash disbursements are, there should be only one person in charge of writing the checks for each task, and there should be numbered checks for both people so that the funds spend can be tracked easier, the cabinets were the checks are stored should be two locked cabinets, one for each person who writes the checks. Memo: I would recommend that to have a better control over money paid and items purchased, that you start having numbered checks in two separate accounts, one account for the treasurer and one account for the purchasing agent. This method will make it easier for moth parties to avoid mistakes, and it will also be easier to verify money spent and received.

The internal control principles implemented by the Guard Dog Company are, numbered checks so that the company has a number trail to monitor cash dispersment. Each check must have approval from Jane Bell, and Dennis Kurt before a check can be issued, this is an establishment of responsibility to ensure that not just anyone ion the company can write checks.

Checks must be signed by either Tom Kimball, the treasurer, or Karen Thews, the assistant treasurer. Before signing a check, the signer is expected to compare the amounts of the check with the amounts on the invoice, this is also a form of establishment of responsibility and both of these procedures are a use of documentation procedures.

After signing a check, the signer stamps the invoice “paid” and inserts within the stamp, the date, check number, and amount of the check. The “paid” invoice is then sent to the accounting department for recording. By doing this it is a way of verifying company cash dispersment and documentation control.

Blank checks are stored in a safe in the treasurer’s office. The combination to the safe is known by only the treasurer and assistant treasurer. By locking the checks in a safe it establishes responsibility for the...
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