While at the countertop, the customer can see other workers making the pizzas plus the large stoves in which the pizza are baked Instructions: Determine the half a dozen principles of internal control and give an example of each principle that you might watch when getting your french fries. Note: It may not be possible to observe each of the principles. ) 1st Basic principle ” Institution of responsibility * Only 1 person is in charge of a given process. * For instance , the cashier that exchanges the french fries for cash would be the theory of establishment of responsibility.


next Principle ” Segregation of duties.

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Accounting employees bills books * Another personnel has custody of cash available (making deposits) * From this principle- segregation of responsibilities one simply cannot observe this kind of principle from this scenario. th Principle ” Documentation types of procedures * Pre-number documents or invoices * For example , the cashier provides pre-number statements for each purchase that is picked up by the customer. At the end with the clerk’s move these accounts are forwarded to accounting to timely record every transaction.

5th Basic principle ” Physical mechanical and electronic handles * Incorporate having safes, deposit boxes, and period clocks for time worked. * The clerk provides a cashier that controls and safeguards the assets to improve the precision and reliability of the accounting records. a Principle ” Independent inside verification * Employees review, compare, and reconcile data that was prepared by all of them.

Three evaluate are advised: * An illustration cannot be presented to this basic principle because a consumer cannot discover if: 5. 1st ” Org. should certainly verify records periodically or perhaps on a surprise basis. 5. 2nd ” A manager should associated with verification of the employee 5. 3rd ” Discrepancies and exceptions must be reported to mgt. to create appropriate corrective action. Phase 7: Issue Set N: P7-2B

The board of trustees of any local chapel is concerned regarding the internal accounting controls pertaining to the providing collections built at weekly services. That they ask you to serve on a three-person audit team with the interior auditor from the university and a CPA (CERTIFIED PUBLIC ACCOUNTANT) who has only joined the church. At a meeting with the audit crew and the plank of wholesale real estate flipper you learn the subsequent: A) Reveal the weak points in inner accounting control in the handling of series. There are a few weak points in inside control inside the handling of collections to get the chapel, such as you cannot find any supervision if the ushers have money.

There is also a chance that the ushers can take money through the collection platter. In addition , the financial admin manages three tasks just like bank getting back together, has control and features custody of the cash, and maintains the church data. Moreover, the financial admin holds away cash ($150-$200) per week; diverse withhold sums for money expenditures. There isn’t a observe when the brain usher and also the financial admin count the cash. Last, inspections are made payable to cash (Kimmel, Weygandt & Kieso, 2007).

B) List the improvements in internal control procedures that you plan to generate at the next meeting of the audit group for: Ushers: How church buildings handle usher operations varies from congregation to congregation, but a consistent pair of controls defends the fiduciary integrity from the church, and creates confidence among contributor. One problem in the collection process is that only the head usher counts the gathering without any accountability to ensure his count can be accurate, or perhaps that all of the funds bestowed are transferred to the safe.

This can be resolved by having the other ushers count the donations and sign away on the record, so that more than one set of eyes have tested the donations. Additionally , volunteers will need to have a course familiarizing would-be brings with regular operating techniques, and credit reporting standards ahead of being qualified to volunteer for jason derulo position. This will help to solidify regulates for the ushers. Brain Usher: While the church is probably not currently suffering from anything wrong with the usher selection and volunteer system at the house of worship, some advancements might be deemed.

The chapel might consider making the head usher a year-long term, elected simply by church associates to create continuity, but as well impose term limits ” possibly just about every 3-4 years a mind usher need to take a sabbatical. Additionally , since the head jason derulo role is indeed pivotal in the collection method, and it is a location where faults or malfeasance can easily occur; it would be helpful for the brings and the economic secretary being present in the collection counts, the day of, therefore someone beyond the usher section can check tithe is important.

Financial Secretary: The most obvious issue, which in turn opens up quick access for, will be embezzlers in the congregations examine policy. Every checks becoming written to cash quite simply enables one to cash out the check, the church, a rouge worker or volunteer, or otherwise. Most checks should be made out to the church, never to cash. It could be even better if the church went the route of numerous churches simply by allowing contributor to have charitable contributions processed month-to-month (or each week depending on subscriber preference) through e-commerce, permitting debit or perhaps credit payments to be built automatically to the church bank account.

This will give a layer for the recording procedure, but it also raises security for contributor. The financial secretary should also stop tugging cash by weekly via shawls by hoda for funds expenditures as cash ventures are harder to and thus are easily abused. Instead a small cash account needs to be began, and money allocated since needed based on historical documents of cash costs. Additionally , a church credit/debit card, or perhaps reimbursement insurance plan greatly is going to diminish the need for high numbers of cash in the petty funds account.

Financing Committee: The initial thing the fund committee needs to do is to follow its policy, and conduct annual audits. The church’s 501 (C)(3) non-profit designation needs this. Often the most “trusted employees will be the ones whom are found to acquire committed improprieties. Regardless of trust, regular audits, and revealing is essential. The other major concern is for the financial committee to purchase a fidelity insurance coverage that will guard the house of worship in the case of economic impropriety or massive fraudulence on a part of those who deal with finances.

Beyond the need for an overhaul in policy (discussed below), the financial committee needs to instill a traditions of financial vigilance and puritanismo to keep the church coming from even the notion of financial impropriety. C) What church policies should be changed to improve inside control? The church plank of wholesale real estate flipper is dependable of be sure that the chapel runs easily, from determining the right ministers to the right ministries and making sure that the tithes and offerings will be accounted for after each support.

The 1st and most urgent action that the church needs to perform is getting some fidelity insurance. This type of insurance will shield the church of deficits that may response to fraudulent acts by specific individuals. Safeguarding the house of worship of any dishonest worker or affiliate who may well steal funds, securities, and also other property that once belong to the church. The second thing is always to have an examine conducted simply because there has not been a great audit performed in 12-15 years. Suggest using an outside source of performing the audit, this way every single rock and stone will be turn over.

The church monetary management section should be accountable for counting and recordkeeping with the tithes and offering received but in separate offices, 1 office intended for counting the money and the other office pertaining to recordkeeping purposes The head jason derulo responsibility ought to be making sure that the tithes and offering plates are accounted for and right away delivering the plates (with one member from the plank of trustee) to the financial management workplace (the economic office director, and one individual from the table of trustees are the simply ones with keys to both offices).

The economic management recordkeeping personnel as well as the financial admin should 1st come for an agreement about how much funds is needed intended for the week expense. Also the two will count the money with the intention to become deposit in addition to a deposit fall; the financial secretary will probably be responsible of making the deposit and after returning the deposit receipt to the recordkeeping office pertaining to recording reasons.


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