Control and accounting information systems suggested answers to discussion questions

Daily bank deposits do not always correspond with cash receipts

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• Alterations have been made to physical inventory counts and to perpetual inventory records. There are many customer refunds and credits.
• An unexplained decrease in the gross profit percentage has occurred. Many documents are not approved.

Daily bank deposits do not always correspond with cash receipts. Bad debt write-offs are prepared and approved by the same employee. There are occasional discrepancies between physical inventory counts and perpetual inventory records. Alterations have been made to physical inventory counts and to perpetual inventory records. There are many customer refunds and credits. Many original documents are missing or lost. However, there are substitute copies of all missing originals. An unexplained decrease in the gross profit percentage has occurred. Many documents are not approved. For each of the eight conditions detected by the Covington internal audit staff: <a. Describe a possible cause of the condition. b. Recommend actions to be taken and/or controls to be implemented that would correct the condition. Adapted from the CMA Examination # Possible Cause Download 197.32 Kb. Share with your friends: