Monday, December 24, 2018

'Communication Actitivy Essay\r'

'As a new auditor for the CPA theatre of Croix, Marais, and Kale, you have been assigned to criticism the inwrought view ass all over armor exchange gross of Manhattan political break dancey. Your review reviews the following: dispels ar promptly endorsed â€Å"For Deposits tho”, but no tendency of the checks is prep atomic number 18d by the soul scuttle the carry. The beam is clear either by the hard currencyier or by the employee who maintains the accounts due unloads. Mail acknowledge are deposited in the border weekly by the specieier. operating instructions: Write a letter to Jerry Mays, possessor of the Manhattan comp individually explaining the weaknesses in intimate realize and your pep upations for improving the system. Mr. Jerry Mays\r\nManhattan Company\r\nDear Mr. Mays\r\nRE: INDENTIFICATION OF WEAKNESSES IN INTERNAL CONTROLS\r\nAs your saucily ap evidenceed auditors, Croix, Marais, and Kale (â€Å"CMK” or â€Å"we”) are mandated by the scope of our contract to review the versed take holds over accouterments specie pass along (the â€Å" figure out”) of Manhattan Company (the â€Å"Company”). As part of the review, we entrust besides interpret some recommendations for improving any set weaknesses in the internal ensure system of the Company. The review of the move identified the following, which we will classify as weaknesses in the internal control of the system:\r\n* Although checks are promptly endorsed â€Å"For Deposit Only”, no key of the checks is brisk by the person opening the unhorse; * Mail is opened by the cashier or by the employee who maintains the accounts receivable records; and * Mail receipts are deposited in the chamfer weekly by the cashier For each of the aforementi oned, we will provide an explanation of the weakness as comfortably as our recommendations for improvement. The checks endorsed, as â€Å"For Deposit Only” is a very good internal control mechanism. The endorsement is restrictive and reduces the likeliness that someone could divert the check for ad hominem use, as banks will not march on individual cash when presented with a check that has this type of endorsement. However, a weakness of the process lies in the fact that no retroflex of the list of the checks that are received is prepared by the person opening the get out.\r\nThis is an exemplification of a document procedure taint in the process and an internal control weakness. Without the preparation of a duplicate list as well as write for the receipt of the checks, there is no tail assemblyvass that the event of receipt of the checks has occurred. By requiring signatures and preparing a duplicate list of the checks, the Company can identify the individual amenable for the event. To this internal control weakness, we would recommend the picturement of right, where precisely a designated person †a mail receipt clerk will be auth orized to handle checks received via mail. The mail receipt clerk should prepare in duplicate, a list of the checks received each day and sign the list to establish responsibility for the receipt of the data. As part of the process, the original copy of the list, along with the checks should be sent to the cashier’s section for the preparation of the occasional cash stocky.\r\nAdditionally, the mail receipt clerk should send a copy of the list to the treasurer’s office, if there is one for reconciliation purposes with the daily cash abridgment. As mentioned above, we notice that the mail is opened by the cashier or by the employee who maintains the accounts receivable records. This is a mar in the internal control of the process related to the segregation of duties or separation of function. The cashier’s office is amenable for the preparation of the daily cash summary and then should not be the very(prenominal) person opening the mail of cash receipts , which is a related activity. Different individuals should be responsible for any related activity. A dishonest cashier can minimize the recording of the mail cash receipts and report a different summation on the daily cash summary for personal benefits. Accordingly, we would recommend the establishment of responsibility, where scarcely a designated person †a mail receipt clerk will be authorized to handle checks received via mail.\r\nAdditionally, we recommend the segregation of duties, where different individuals receive the mail cash, record the receipts and hold the cash. This will ensure that different individuals are responsible for any related activity and that the responsibility for record keeping for the cash is infract from the physical custody of the cash. Finally, we also observed that the cashier deposits mail receipts in the bank weekly. The internal storage of cash on the premises of the Company is not advisable for obvious reasons- theft, robbery, and unaut horized bother. Employees with opposite intentions can alert external cohorts to burst or rob the Company at night or at other time to gain access to the cash stored on the premises.\r\nAdditionally, the storage of the cash on the premises presents a â€Å"working misfortune” for the employees as outsiders wanting to gain access to the cash may subject them to abdicable raids. The use of a bank on a daily floor contributes importantly to good internal control over cash. The company can safeguard the cash on a daily basis by using a bank as a depository and thus minimizing the amount of currency that the Company has on hand at any point in time during the week. Additionally, the use of the bank on the daily basis facilitates the control of cash because it creates a double record of all bank transactions †one by the Company and one by the bank.\r\nAlso we recommend that all receipts be deposited in the bank on a daily basis versus the electric current practice of w eekly deposits. In summary, if management implements the above recommendations, the Company will be in a better present to safeguard its assets from employee theft, robbery, and unauthorized use. Additionally, the company’s accounting records will be intensify in its accuracy and reliability as a result of the reduction in the risk of errors and irregularities. We are available to push discuss with Company management and rely that the recommendations will be implemented as soon as practicable. We look in the lead to working with management on this initiative.\r\n prolongation\r\nWeygandt, J. J., Kimmel, P. D., &type A; Kieso, D. E. (2008). Financial accounting: 2010 custom edition (6th ed.). Hoboken, NJ: John Wiley & Sons.\r\n'

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