Financial System

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BTEC HND Qingdao Center | | | | | | | | | | | | | | | | | |Assignment Brief and Feedback Form | | | | | | | | | | | | | | | | |Learner name |  |  |  | | | | | | | | | | | | | | | |Course title |Financial Systems and Auditing | | | | | | | | | | | | | | | |Assessor name |XIAOLIN WANG |  |  | | | | | | | | | | | | | | | |IV name |Hu Dalong | |  | | | | | | | | | | | | | | | |Unit number and title |Unit11: Financial Systems and Auditing | | | | | | | | | | | | | | | |Assignment title |Financial Systems and Auditing Assignment 1 | | | | | | | | | | | | | | | |Outcome number(s) |11. 1 & 11.2 | | | | | | | | | | | | | | | |and statement(s) | | | | | | | | | | | | | | | | |Date set |Mar. 14th , 2011 |Hand-in date |Mar. 28, 2011 | | | | | | | | | | | | | | | |Review dates | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |Learner declaration | | | | | | | | | | | | | | | | | | |I confirm that the work submitted for this assignment is my own. |  | | | | | | | | | | | | | | | |  |  |  |  | | | | | | | | | | | | | | | |Learner signature |  |Date |  | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |Introduction | | | | | | | | | | | | | | | | | | |Purpose/aims |The assignment 1 is designed to help you understand the control procedure for reducing fraud risk and how to maintain key control procedures reducing the risk of fraud occurring and increasing the risk of detection.

By analysing the case of control over cash, you should recognize the potential risk of poor internal control and make suggestions about how to reduce the risk of fraud and increase the risk of detection within a business context.

Case:
Island Trading Co., a client of your CPA firm, has requested your advice on the following problems. It has three clerical employees who must perform the following functions: 1) maintain general ledger.

2) Maintain accounts payable ledger.
3) Maintain accounts receivable ledger.
4) Maintain cash disbursements journal and prepare checks for signature. 5) Issue credit memos on sales returns and allowance.
6) Reconcile the bank account.
7) Handle and deposit cash receipts.
The task of employee A is (1) and (4)
The task of employee B is (3),(5)and (7)
The task of employee C is(2)and (6) | | | | | | | | | | | | | | | | 

| | | | | | | | | | | | | | | | |  | |  |  | | | | | | | | | | | | | | | |Background or scenario |  |  | | | | | | | | | | | | | | | |

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Required:
a. State the risk of combinations of the above-listed functions to Island Trading Co. b. State how you would recommend distributing the above functions among the three employees, in such a manner as to achieve the highest degree of internal control. It maybe assumed that these employees will perform no other accounting functions than the ones listed and that any accounting functions not listed will be performed by persons other than these three employees.

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Tasks | | | | | | | | | | | | | | | | | | |Task number |Task ( Include the grading statement from the published specifications)  |Criteria covered  | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |1 | State the risk of combinations of the above-listed functions. | 11.1 (a, b &c)

11.2 © | | | | | | | | | | | | | | | |2 |
State how you would recommend distributing the above functions among the three employees, in such a manner as to achieve the highest degree of internal control. It maybe assumed that these employees will perform no other accounting functions than the ones listed and that any accounting functions not listed will be performed by persons other than these three employees. |11.2 (a, b) | | | | | | | | | | | | | | | |

Instructions:

• Complete the tasks as listed below in a standard business report format. • The assignment must be typed on A4 paper, double-spaced, font size 12. • The assignment should be around 500 words.
• The assignment is due...
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