Imagine_That_You_Are_an_Account_Executive_for_a_Large_Advertising_Agency

Internal Cash Control By: Steven Carter University of Phoenix/Axia College ACC/220 Internal Cash Control has many responsibilities in a business and when it comes to maintaining a business’s cash, everyone has to play their part in order for it to be effective and profitable to the company. In the first scenario, the questions that were asked was to list the weaknesses in internal control over cash disbursements and to write a memo indicating your recommendations for improving company procedures. The answer to the first question would be to separate the functions of internal control with authorization, recording and custody of assets. Any department that has more than one of these abilities causes a weakness in control. The point of this is to prevent fraudulent activity that could be committed by any one person who had the power to do all three. I recommend that Idaho Company ought to immediately order pre-numbered checks. If this does not happen, checks can be taken plus not accounted for because there is no numbering sequence. Next, one person will be entrusted with the key to the cabinet in which the unissued checks are kept. Also asap, each check will need two signatures. Both the purchasing agent plus the treasurer will confirm the accuracy of seller bills previous to payment. They will then again be verified by a third worker. After the triple verification method, checks will be issued plus they both will match the amount of the checks to the amount of the invoices. After the treasurer reviews the checking account, the purchasing agent plus a third worker ought to be able to confirm that the treasurer has not missed any amounts plus that the review process is right. Not only ought invoices be stamped as paid, but the date they were paid along with the check numbers plus authorizing names ought to be recorded. When evaluating the Guard dog Company, I found that all of the five basic principles for funds (cash) management were being used to help with the company's accuracy. By making all checks to be pre-numbered plus written using the company's newly bought check writer, the Guard dog company is using physical, mechanical, plus electronic controls. Segregation of duties are used because of the individuals who approve the invoices are different from the people who sign the checks. Independent internal verification is used when a number of people confirm the accuracy of the invoices. Documentation of procedures is used when additional info is written on the check after it is stamped PAID IN FULL. In case of an audit, the Guard dog company would have a miniscule amount of money that is unable to be accounted for. After reading an overview of the church and their internal cash (funds) control, I was both amazed plus shocked to find that this was being treated without care. There were a number of weaknesses. The thing I found to be wrong was the fact that no one is remaining with the head usher as he counted the funds received plus that absolutely no one is verifying his count. There ought to be a detailed note with the date, the amount of money received, plus the usher's signature. Below that ought to be a count by a second person along with the date plus their signature. There is no audit procedure plus the board of trustees isn't at all involved in the record keeping procedures. The financial secretary has been in place for an excessive time period. Since there has been no audit, there is no way to tell if the financial secretary is as reliable as the church feels he or she is. One of the most alarming distraction to me was that church members are being instructed to write out checks payable to cash. These can be cashed by any one person plus the average church member does not get their cancelled checks to see who has signed for it. The church ought to make sure that all checks be made out payable to the church only. The financial secretary is the only person reconciling the bank statements plus because the financial secretary is both reconciling the bank statements plus keeping church records, there is no way to tell if balances, deposits, or anything else is correct. This should never happen. The thing I would change first is that the ushers ought to stick with the head usher while he counts the collection. After he gets the total, this ought to be verified the other ushers. The head usher ought to sign a slip with the amount counted plus get one other usher to sign it, verifying that the amount that he counted was correct. Next, the financial secretary ought to recount the collection plus sign the slip that the usher left, verifying that his or her total is the same and correct. One copy of the note with at least three signatures verifying the collection ought to be filed plus another copy ought to be given to the board of trustees. The financial secretary ought to have a set amount of funds to withhold and deposit everything else. The amount of fund expenditures ought to be limited to a minimum. I am definite that if the following changes are done immediately that the Board of Trustees and the church will have some peace knowing the money is accounted for. The finance committee ought to approve all of the cash expenditures plus view the signatures and the amount of each collection. The finance committee should view the bank statements plus all paperwork. The finance committee needs to also appoint someone else to confirm the all paperwork and statements. Several church policies ought to be changed immediately to improve internal control. Independent internal verification ought to be used in all cash matters to uphold accountability. Segregation of duties need to be put in to place besides the financial secretary being the only one to make the deposit. There should be a financial secretary plus the newly appointed bookkeeper who needs to be bonded plus insured. The five basic principles of cash management are important in any business, no matter what size. These principles help keep employees honest, and increase accuracy of finances.