Internal Controls over Mail Cash Receipts

Internal Controls over Mail Cash Receipts

You are an auditor who has been assigned to review the internal controls over mail cash receipts of a company. Your review reveals the following: checks are promptly endorced “For Deposit Only,” but no list of the checks is prepared by the person opening the mail. The mail is opened either by the cashier or by the employee who maintains the accounts receivable records. Mail receipts are deposited in the bank weekly by a cashier. Explain what the weaknesses (at LEAST two or three) are in internal control and your recommendations for improving the system.

sample Section of the paper

Internal Controls over Mail Cash Receipts

Weaknesses: The first weakness in the internal controls of this system is the lack of listing of all checks; a list that should be prepared by the person mandated to open the mail. The second weakness observed, is the lack of clearly segregated duties between the different parts of the systems, the employee and the cashier who opens the mail, is the same individual who also maintains the accounts receivable records.

Recommendations: Separate all duties in the process of opening the mails, maintaining the records of the accounts receivable and depositing of the mail receipts at the bank. The person opening the mails should not be the same person who maintains the records of the accounts receivable, their control over the process should be significantly reduced. They should only handle one part of the process, either be mandated to open the mail or to maintain the accounts but not both duties. In this case, the cashier should not open the mail but this duty should be delegated to another employee. This employee should be required……………………..

 

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