1.Principle violated is separate record keeping and custody over assets. Due to Heather handling the receipts from the customers someone else should handle the recording process.
2.Principle violated is establish responsibilities. Divided responsibilities for related transactions. There should be rules set in place where no petty cash payments should happen while Jeff is at lunch. If for some reason this can’t be possible Jeff and Jose should count the cash before Jeff leaves and when he returns. This prevents any book errors.
3.Principle violated is safeguard assets. The information saved for backup should be stored in another location, possibly in fireproof/waterproof location. If a fire were to happen in the office the backup tape being stored in a desk will do Nadine no good, she still loses the backup and the computer. Also a lock can be broken, so if someone wanted the information badly enough, it’s still accessible.
4.Principle violated is perform regular and independent reviews. Performing unannounced reviews allows for Barto to be positive his rules are being followed.
5.Principle violated is Establish responsibilities. Bond employees. Desi should have submitted a proposal to her manager about raising the deductible as well as dropping the bond on employees. She should not have made these changes on her own. Problem 6-2A
|May 1 |Petty cash |250.00 | | | |Cash | |250.00 | | |To establish the petty cash fund. | | | | | | |...