General and application controls
Identify one or more control procedures (either general or
application controls, or both) that would guard against each of the following
errors or problems.
Leslie Thomas, a secretary at the university, indicated that
she had worked 40 hours on her regular time card. The university paid her for
400 hours worked that week.
The aging analysis indicated that the Grab and Run
Electronics Company account was so far in arrears that the credit manager
decided to cut off any further credit sales to the company until it cleared up
its account. Yet, the following week, the manager noted that three new sales
had been made to that company?all on credit.
The Small Company employed Mr. Fineus Eyeshade to perform
all its accounts receivable data processing. Mr. Eyeshade’s 25 years with the
company and his unassuming appearance helped him conceal the fact that he was
embezzling cash collections from accounts receivable to cover his gambling
losses at the race track.
The Blue Mountain Utility Company was having difficulty with
its customer payments. The payment amounts were entered directly into a
terminal, and the transaction file thus created was used to update the customer
master file. Among the problems encountered with this system were the
application of customer payments to the wrong accounts and the creation of
multiple customer master file records for the same account.
The Landsford brothers had lived in Center County all their
lives. Ben worked for the local mill in the accounts payable department, and
Tom owned the local hardware store. The sheriff couldn’t believe that the brothers
had created several dummy companies that sold fictitious merchandise to the
mill. Ben had the mill pay for this merchandise in its usual fashion, and he
wrote off the missing goods as “damaged inventory.”
ScholarMatic: Explanation & Answer
Your ready answer from a verified tutor is just a click away for as little as $14.99
Click Order Now to get 100% Original Answer Customized to your instructions!
